Fannie Mae’s total issuance of green multifamily mortgage-backed securities cleared a key milestone in November when the volume rose above $100 billion for the first time, according to the government-sponsored enterprise.
New securitizations of loans on energy-efficient rental housing totalled $12.7 billion during the first 11 months of this year, suggesting 2021’s total will come close to matching 2020’s $13 billion.
While Fannie’s annual issuance in this category has varied over the years, depending on
“We never took our foot off the gas and we have been committed to green since we started looking at this over 10 years ago,” said Michele Evans, executive vice president and head of Fannie Mae’s multifamily division, in an interview. “We never stopped trying to price this business appropriately to bring [borrowers] in.”
With domestic investors showing a growing interest in environmental, social and governance bonds over the past 18 months, Fannie currently expects to continue issuing around $10 billion to $13 billion annually for the foreseeable future.
“The same education that we launched with our borrowers in the 2016, 2017, 2018 timeframe we are now in the process of doing the same on the investor front,” said Lisa Bozzelli, senior director of multifamily capital markets at Fannie Mae. “So many of our regular buyers are developing ESG funds, requirements or interests.”
While that market has been
Fannie’s green bond program is aimed at incentivizing borrowers to finance energy or water efficiencies that will benefit tenants. Going forward, other types of projects that could come more into focus are solar power and emission reduction projects, Bozzelli said.
