HUD Announces New Funding for Green Retrofits

HUD is accepting applications for green retrofit loans and grants until spring of 2024.

HUD is making funding available to support green and resilient retrofits of properties participating in Multifamily Assisted Housing programs. According to HUD, this funding will allow owners to invest in technologies such as solar panels, heat pumps, wind-resistant roofing and other measures that will reduce greenhouse gas emissions and make properties healthier and safer for residents in the face of more severe weather and a changing climate.

This is the first HUD program to simultaneously invest in utility efficiency, renewable energy generation, and climate resilience strategies in HUD Multifamily Assisted Housing. The Inflation Reduction Act of 2022 provided HUD with $837.5 million in grant funding and $4 billion in loan authority for this new program. The bill also included $42.5 million for a new HUD benchmarking initiative that will launch later this summer to collect and assess energy and water usage data from assisted multifamily housing properties.

HUD recently published three Notices of Funding Opportunity (NOFOs) for the Green and Resilient Retrofit Program (GRRP), along with implementation guidance in Housing Notice H 2023-05. The program’s NOFOs and Housing Notice detail the multiple grant and loan funding options building owners can apply for, and the options are designed to meet the needs of applicants with varying levels of expertise with green retrofits. HUD is accepting applications for green retrofit loans and grants until spring of 2024.

3 Funding Options

HUD estimates that hundreds of properties will receive the new funding, covering tens of thousands of households. If you’re an owner who receives HUD assistance through Sections 202, 811, Section 8 project-based rental assistance, or certain other small programs, you may be eligible for a grant or loan award under one of three categories:

Elements awards. This category provides modest funding to owners to add proven and meaningful climate resilience, energy efficiency, electrification, and renewable energy measures to the construction scopes of in-progress rehabilitation. Since these rehabilitations will lock in technologies for many years to come, GRRP funding will make it possible for owners to substitute greener or more resilient building components or fixtures in their existing plans.

In other words, elements awards are designed for sites already planning renovations so they can add green or resilient elements to existing scopes of work. A qualifying example would be if an owner is well advanced in planning and financing a property rehab and, as a result of the award, the owner will replace the in-unit HVAC systems with higher-efficiency electric HVAC systems.

Approximately $140 million is made available for the elements awards in the form of grants and surplus cash loans. The funding is capped at $40,000 per unit or $750,000 per property. Applications are due March 28, 2024, and HUD will implement a rolling application submission process with unfunded applications ranked for selection on three occasions (roughly two, five, and eight months after May 11).

Leading edge awards. This award provides funding for retrofit activities to achieve ambitious outcomes, including net zero, renewable energy generation, use of building materials with lower embodied carbon, and climate resilience investments. In other words, these awards are designed to fund projects that will achieve a high-level third-party green certification. For example, the funding will help an owner move forward with a complete renovation to a passive house certification with various financing that includes a GRRP loan.

Approximately $400 million is made available for the Leading Edge Awards in the form of grants and Surplus Cash Loans. The funding is capped at $60,000 per unit or $10 million per property. Applications are due April 30, 2024, and HUD will implement a rolling application submission process with unfunded applications ranked for selection on three occasions, roughly three, six, and nine months after May 11.

Comprehensive awards. These funding awards are designed for the widest range of properties, including those that have not yet developed a recapitalization plan. This funding will prioritize sites with a high need for investments in energy efficiency, emissions reductions, and climate resilience. The construction funded by this award will be informed by a series of assessments that will identify the property’s specific capital needs as well as property-specific opportunities to meet GRRP objectives.

An example of an applicant for this award is a site that has high REAC scores and low capital needs, but is using older equipment dependent on fossil fuel sources. It’s in an area of wildfire risk. The owner is considering either a refinancing with rehab or a stand-alone renovation for efficiency, emissions reductions, and resilience.

In this category, HUD-procured Multifamily Assessment Contractors will support owners by commissioning third-party reports and assessments to develop a scope of work. The resulting plan will include whole-building retrofits to incorporate green retrofit and resilient design elements. Approximately $1.47 billion is made available for the Comprehensive Awards in the form of grants and Surplus Cash Loans. The funding is capped at $80,000 per unit or $20 million per property.

Applications are due May 30, 2024, and HUD will implement a rolling application submission process with unfunded applications ranked for selection on three occasions, roughly four, seven, and 10 months after May 11.

How to Apply

HUD is implementing GRRP through the Office of Recapitalization within the Office of Multifamily Housing Programs, within the Office of Housing. Within each award category, HUD is making funding available in grouped allotments so that owners not ready to apply immediately are not disadvantaged in the application process. An owner must select which award is most appropriate for each site based on their circumstances.

An owner can submit a site to only one of the award categories. If the owner would like to switch a site from one category to another, the owner must withdraw any pending application prior to submitting one for a different award. There is no limit to the number of sites an owner, or its affiliates, can submit across all award categories, but the number of awards an owner or its affiliates may receive is capped as specified in each of the categories.

You can find required application materials through Grants.gov. You must access and review all available application materials, and submit your application electronically via Grants.gov under the funding opportunity number cited within HUD’s Notice of Funding Opportunity (NOFO). The NOFOs can be found at www.hud.gov/grrp. You can email questions regarding HUD’s green retrofit program to GRRP@hud.gov.

HUD’s Energy & Water Benchmarking Initiative Offers Free Support

In line with HUD’s focus on improving housing quality and making HUD-assisted multifamily housing more energy efficient, HUD has announced an upcoming energy and water benchmarking initiative that will offer free support to affordable housing sites to assess energy efficiency and savings recommendations. The funding for this program was included in the Inflation Reduction Act of 2022.

The initiative will offer free, personalized support though an energy consultant contractor to assist with assessing the efficiency of buildings of owners who opt into the voluntary program. According to HUD, an energy consultant will be assigned to each property to support the benchmarking process at every stage from contacting utilities about accessing relevant data to providing portfolio-wide cost and energy savings recommendations based on energy and water usage. The program is currently in the final stages of development, and for further questions about the GRRP Benchmarking Initiative, you can email MFBenchmarking@HUD.gov.

Program Benefits

Participating in the HUD Energy and Water Benchmarking Initiative may provide owners with the following benefits:

• Identifying the greatest opportunity for energy and water savings in your buildings. A 111-unit site in downtown Excelsior Springs, MO, saved $20,595 per year in energy costs by implementing energy efficiency measures. The measures included installing a new, efficient boiler plant, chiller, and ventilation unit, upgrading all interior lighting to more efficient fixtures and installing motion sensors throughout the building. New windows were replaced throughout, and a new solar hot water system now provides heat for the domestic hot water system.
• Establishing eligibility or preparing you to make use of federal, state, and utility energy efficiency programs. A few programs you may qualify for include EPA’s Greenhouse Gas Reduction Fund and HUD's Multifamily Green and Resilient Retrofit Program.
• Supporting compliance with local ordinances. Localities across the country are trending towards requiring this data from multifamily properties.