Financing for affordable multifamily housing energy efficiency projects

The Affordable Multifamily Housing program will target multifamily properties where at least 50% of the units are income restricted.

Like all of the programs highlighted on GoGreen Financing, the Affordable Multifamily Housing program is designed to encourage growth in private market lending and will feature a credit enhancement to help financing entities mitigate risk. It will be designed to leverage and complement existing State and utility efforts to encourage affordable multifamily properties to install energy efficiency retrofits.

Property must receive electric and/or gas service from any of the following energy companies:

  • Pacific Gas and Electric Company (PG&E®)
  • San Diego Gas & Electric Company (SDG&E®)
  • Southern California Edison (SCE)
  • Southern California Gas Company (SoCalGas®)

Financial products supported

Loans, leases, energy service agreements up to $5 million

Projects to be financed

At least 70% of the financed amount must be Energy Savings Measures or demand response. Up to 30% of the financed amount may fund non-energy efficiency improvements. Financing for distributed generation (DG) improvements like solar photovoltaic (PV) may be included but will not receive a credit-enhancement.

Eligible properties

Affordable, multifamily properties of 5 or more units, where at least 50% of the units are restricted to income eligible households for a minimum of ten years. The property must be subject to deed restrictions that require the owner to keep rents affordable

Repayment options

Affordable Multifamily Housing property owners can choose to repay their financing in two ways:

  1. Direct to finance company, or
  2. On-bill repayment for master-metered multifamily properties.

Benefits for customers

  • Access to attractive financing that can be used to update aging, energy-inefficient multifamily properties.
  • Complements existing affordable multifamily energy efficiency programs that offer rebates or incentives by offering attractive financing for “out of pocket” costs.
  • Borrower can finance up to $5 million. The first $1 million in financing will be credit-enhanced.
  • At least 70% of the financing must be used to for qualified energy efficiency measures and associated costs, but up to 30% may be used for non-eligible measures. (Finance companies may finance distributed generation, such as solar PV, but will not receive a credit-enhancement for that portion of the financing.)
  • May support energy service agreements and on-bill repayment structure, which can assist in complementing the typical affordable multifamily debt structure.

Benefits for finance companies

  • Mitigate credit risk. The first $1 million of every enrolled financing product will receive a credit enhancement.
  • Access loan loss reserve funds of approximately $2.9MM for the Affordable Multifamily Housing program
  • Take advantage of a statewide marketing campaign and expand your reach in California

Anticipated start date

This pilot is currently under development. It is anticipated that public workshops will be held over the summer of 2018, resulting in regulations in mid-to-late 2018, and program launch in 2019.

For more information

For more information on the Affordable Multifamily Housing program, please contact:

Susan Mills
SMills@sto.ca.gov

affordable multifamily housing upgrades