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Another Issuance of ‘Green’ Mortgage-Backed Securities

In a new Perspectives blog, Fannie Mae announced the issuance of its sixth Single-Family Green mortgage-backed securities (MBS) transaction backed by loans financing newly constructed, energy efficient homes.

The new transaction totaled $7.9 million, which brings the total for the Single-Family Green MBS issuances to $50 million. Fannie Mae began these issuances on April 22—the date was chosen to commemorate the 50th anniversary of Earth Day—and the transactions have ranged in size from $6 million to $11.5 million.

All of the mortgage loans involved in the Single-Family Green MBS transactions were originated by DHI Mortgage, the mortgage finance arm of home builder D.R. Horton Inc., and Eagle Home Mortgage, the mortgage finance arm of home builder Lennar Corp. Fannie Mae stated it was seeking to expand the program to include mortgage loans from additional lenders.

“This offering is the latest step in a journey—begun a decade ago when we introduced green financing to the multifamily market—that increasingly ties Fannie Mae’s business activities to measurable Environmental, Social and Governance (ESG) outcomes,” said Renee Schultz, SVP for Capital Markets, who noted Fannie Mae’s multifamily business “has issued $75 billion of green MBS, making us the largest green bond issuer worldwide.”

Schlutz added that Fannie Mae planned to continue the program in order to “meet investor demand for securities tied directly to improved energy efficiency in housing and strengthen Fannie Mae’s leadership in green financing globally.”

The program’s transactions exclusively focus on mortgage loans backed by newly built single-family residential homes with ENERGY STAR certifications that either meet or surpass the national program requirements for ENERGY STAR Certified Homes. The government-sponsored enterprise stated future issuances may include other energy-efficient new construction standards that will meet or exceed those of ENERGY STAR Certified Homes, Version 3.0. Fannie Mae has partnered with the engineering consulting film PEG LLC to ensure all of the properties underlying the MBS received the ENERGY STAR certification.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.

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