Making the Dollars Count by Counting the Dollars: Innovative Financing for Green Building

At this year’s Montgomery County Energy Summit, Lorax partnered with a developer, a financial underwriter, a commissioning agent, and an asset manager to present on Innovative Financing for Green Buildings. See the slide deck below and the presentation abstract for more details on the conclusions we came to. Spoiler Aler: Green Buildings can save you upwards of $6 million in HUD Financing, Local High Performance Building Tax Incentives, Utility Rebate Programs, and State Electrical Vehicle Charging Station Rebates. Not to mention all of the other cascading benefits of green building like higher building value, longer building life cycle, faster lease up, higher rents, and lower turnover rates, along with many other benefits.

The presentation will scroll automatically; however, you can review the slides at your own pace using the controls found when your mouse rolls over the presentation below.  

By looking at project examples from a local developer, Somerset Construction, we will explore how a combination of harnessing the HUD Mortgage Insurance Premium Reduction, maximizing Utility Rebate Programs through energy efficient design, and going after local High-Performance Building Tax Incentives allow LEED certified projects to not only maximize energy efficiency, but also profitability.

Through this panel discussion, we will explore the innovative financing techniques used at The Residences at Annapolis Junction in Howard County, MD; The Berkleigh located in Baltimore County, MD; The Cambria Hotel at Arundel Mills in Anne Arundel County, MD; and The Aspen at Melford Town Center in Prince George’s County, MD, and how these financing strategies were contingent on the projects’ LEED Gold certifications.

The panel will start by diving into a high-level overview of the projects at hand and discussing the initial impetus for their development. We will learn about the developer’s motives and considerations when developing multifamily and hotel projects, and then explore the benefits of pursuing LEED Gold certification from the developer’s perspective.

Subsequently, we will turn to the chief underwriter of these projects to discuss the HUD Green Mortgage Insurance Premium Reduction program in general and how these projects qualified for the program. We will dive into the requirements and challenges of complying with the program, and also the significant payoff it can provide to the developer.

While the HUD MIP Reduction program only requires the minimum level of LEED certification, the Commissioning Agent will explain the added benefits of achieving higher levels of LEED certification. These benefits include lower utility costs for the building owner and renters. Further, the Commissioning Agent will connect the higher levels of LEED certification to maximizing local Utility Rebate Programs by achieving and implementing energy efficiency strategies like LED Lighting, Enhanced Commissioning, Energy Star Appliances, and the like.

A representative from the co-developer will share her experience with advocating for and harnessing local High-Performance Building Tax Incentives.  She will dive into the compounding effect of reaching higher levels of LEED certification and how the payout works. Lastly, we will hear from the construction manager to understand how all of these moving parts are managed and prioritized. We will finish by exploring the ancillary benefits of these incentives that lead to high levels of LEED certification.  These benefits include a profitable project, faster lease up, higher rents for the owner, lower utility rates for the occupant, healthier living for the renters, and enhanced marketing opportunities.