LIIF Receives $5.5 Million from Bank of America to Finance Energy Efficient Building Retrofits
Program will create jobs, reduce utility costs and carbon emissions for low-income communities
San Francisco, California—The Low Income Investment Fund (LIIF) today announced that it has received a $5.5 million low-cost loan and operating grant from Bank of America to expand its energy efficient retrofit financing programs for 2,500 affordable housing units nationally. LIIF will partner with the Stewards of Affordable Housing for the Future (SAHF) to launch a program that will aim to reduce energy and water consumption in the units by 20% – lowering costs, preserving housing affordability and improving resident comfort and health.
“Bank of America’s Energy Efficiency Finance Program provides the industry leadership and financial support the Low Income Investment Fund (LIIF) and Stewards for Affordable Housing for the Future (SAHF) need to launch a groundbreaking approach to greening affordable multifamily housing on a national scale,” said Nancy O. Andrews, President & CEO of the Low Income Investment Fund. “LIIF and SAHF believe that this new program will become a model for providing sustainable energy retrofit loans for privately-owned affordable housing across the country. Bank of America’s program is enabling LIIF and SAHF to put funds to work where they are needed most and bring the environmental, economic and health benefits of green, energy efficient buildings to low income communities.”
LIIF is one of the Community Development Financial Institutions (CDFIs) selected to participate in Bank of America’s $55 million Energy Efficiency Finance Program announced last spring. The program will enable CDFIs to finance the upfront investment costs for building owners in low-income communities, bringing to scale innovative, local programs, providing energy efficient retrofits or improvements to buildings, contributing to local job creation and reducing overall energy usage. It also will reduce the carbon emissions from these residential and commercial buildings, which account for nearly 40 percent of all primary energy consumption in the United States. The energy cost savings realized over time will create cash flow to repay the loan.
“Older properties consume far more energy and typically have higher electricity costs than newer buildings, but they make up the majority of our real estate inventory here in San Francisco and across the country,” said Martin Richards, Bay Area market president for Bank of America. “LIIF is a tremendous partner for developing innovative solutions to address barriers that have kept many property owners from financing important energy efficiency upgrades that will not only help save energy and money, but help create jobs as these retrofits get underway.”
Through LIIF’s program, SAHF members will access long-term financing to pay for the upfront costs of the energy efficiency upgrades on their portfolio of housing across the country. SAHF members’ properties are assisted through a variety of HUD programs, including Section 8, Section 202 and the Low Income Housing Tax Credits (LIHTC). If successful, this initiative could create a scalable model for the 6.6 million units of privately-owned HUD and LIHTC assisted housing. The program also receives technical assistance and grant funds from the Department of Energy (DoE) through their Weatherization Innovation Pilot Program award to SAHF.
One of the properties poised to benefit from LIIF-financing is Brandy Hill Apartments, a 132-unit complex of garden-style apartments in Wareham, Massachusetts. Owned by the nonprofit Preservation of Affordable Housing (POAH), Brandy Hill Apartments is home to low-income families and is supported by HUD’s Section 8 program. Funds from the LIIF-SAHF program will upgrade the building’s water, heating, lighting and insulation, saving the property approximately $40,000 annually.
“Utility costs are the single largest controllable expense in multifamily affordable housing,” said Richard F. Samson, President of SAHF Energy. “Currently, the majority of energy retrofit programs are available only to properties that are undergoing recapitalization. Energy Performance Contracting is an opportunity for properties that may be years away from recapitalization to realize energy savings today.”
Loans from the program will cover approximately 80% of the costs of the retrofits. The DoE grant, owner contribution and local funding will cover the balance of the costs. SAHF members will repay their loans through energy savings guaranteed by a qualified Energy Services Company (ESCO). The program demonstrates the effectiveness of Energy Performance Contracting (EPC) as a mechanism for conducting energy retrofits in privately-owned multifamily assisted housing. In the EPC model, an ESCO conducts a whole-building efficiency audit and designs a package of energy conservation measures in which the utility cost savings cover the installation costs over time.
About the Low Income Investment Fund
The Low Income Investment Fund (LIIF) invests capital to support healthy families and communities. Since 1984, LIIF has served 970,000 people by providing $1 billion in financing and technical assistance. Over its history, LIIF has supported efforts to create and preserve: 56,000 units of affordable housing; 180,000 child care spaces; 56,000 spaces in schools; and 3.5 million square feet of community facilities and commercial space. LIIF’s work has generated $20 billion in family income and societal benefits. LIIF has offices in San Francisco, Los Angeles, New York City and Washington, D.C. For more information about LIIF, visit www.liifund.org.
About Stewards of Affordable Housing for the Future
Launched in 2003, Stewards of Affordable Housing for the Future (SAHF) has nine sophisticated not-for-profit members who acquire, preserve, and are committed to long-term, sustainable ownership and continued affordability of multifamily rental properties for low-income families, seniors, and disabled individuals. Together, SAHF members own and operate housing in 49 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands—providing homes to approximately 90,000 low-income households across the country.
SAHF’s members promote their shared objectives, which embraces the notion that stable, affordable rental homes are critically important in people’s lives. Through their deal flow, SAHF’s members stay on top of policy and marketplace developments nationwide. They come face-to-face almost daily with barriers to preservation of affordable housing for the poor, which enables them to discern patterns. Seeing the patterns and having the expertise, SAHF works with its members to develop policy solutions that work.
Samantha Hojo, Low Income Investment Fund
212.509.5509 x17, firstname.lastname@example.org