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Green Bonds
At Fannie Mae, our mission is clear: to deliver stability and affordability to America’s housing market. We do so primarily by purchasing mortgage loans from lenders and securitizing them into mortgage-backed securities (MBS), which we then guarantee.
Our green efforts support the Single-Family and Multifamily housing markets by financing homes and homes and rental communities that meet energy- and water-saving standards. We offer investors green bonds that build upon our mission where the underlying collateral positively impacts housing infrastructure and the environment.
Multifamily Green MBS
Offered through our Multifamily Delegated Underwriting and Servicing (DUS®) business, each DUS MBS is generally secured by a single Green mortgage loan collateralized by one property and features guaranty of timely payments, stable cash flows, and liquidity.
Since issuing our first Multifamily Green Bond in 2012, Fannie Mae has infused over $85 billion into the global green bonds market through nearly 4,000 individual bonds (through year-end 2020). We also established many of the standards and processes adopted industrywide. Our Multifamily Green Bond Framework received a Light Green Second Opinion from CICERO Shades of Green . One of our two multifamily green loan programs, Green Rewards, received a Light-to-Medium Second Opinion from CICERO Shades of Green.
HIGHLIGHTS
- Guaranty of timely payment of principal and interest.
- Stable cash flows that are easy to model.
- Lower spread volatility relative to other products with similar collateral.
- Superior call and extension protection.
Green GeMS
Green Guaranteed Multifamily Structures (GeMS™) are backed by blocks of previously issued Green DUS MBS and offer collateral diversity, tight maturity profiles, and guaranty of timely payments of principal and interest.
HIGHLIGHTS
- Composed of numerous DUS MBS and maintain the characteristics of DUS MBS.
- More diversified than a single Green MBS, featuring geographic and borrower diversity.
- Customizable cash flows based on duration, average life, coupon, convexity profile, yield, and price.
- Backed by collateral selection with consistent credit quality and tight maturity profiles.
- Issued several times a year.
Single-Family Green MBS
Single-Family Green MBS include either purchase money or refinance mortgage loans backed by newly constructed single-family residential homes receiving approved green building certifications within the last five years. Our Single-Family Green Bond Framework received a Light Green Second Opinion from CICERO Shades of Green.
Since the launch on April 22, 2020 to commemorate the 50th anniversary of Earth Day and through the first nine months of 2021, Fannie Mae has issued over $400 million of Single-Family Green MBS.
HIGHLIGHTS
- Guaranty of timely payment of principal and interest.
- Require the ENERGY STAR® Certification for New Homes (Residential) designation as a baseline because it is a nationally and globally distinguished standard for energy efficiency.
- Lower spread volatility relative to other products with similar collateral.
- Bolstered by independent third-party verification that underlying properties received eligible certifications.
ENERGY STAR® is a registered trademark of the U.S. Environmental Protection Agency.
Green Bonds positive impact
Our Green Bond issuances in 2012 – 2020 are projected to generate positive environmental, social, and financial outcomes.
Environmental Social Economic
All numbers are based on projected impacts.
9.5B
kilo British Thermal Units (kBTU) source energy saved
$9.5B
wages paid to construct or retrofit properties, contributing $19.9 billion to U.S. gross domestic product (GDP)
8.5B
gallons of water saved*
$410M
borrower investment commitment for energy and water efficiency measures on 3,696 properties through the Multifamily Green Rewards Mortgage Loans*
634K
metric tons carbon dioxide equivalent (MTCO₂e) of GHG emissions prevented
$2.83
economic output per dollar invested
$146M
utility cost savings by multifamily tenants, or an average of $184 per family per year*
872K
properties retrofitted or green building-certified*
$843
average homeowner utility cost savings per single-family home per year**
224K
well-paid jobs created or supported
Case study — Pax Futura
Pax Futura is Seattle, Washington’s first certified Passive House apartment project — and a real-world demonstration that ultra-high-performance green building can be done at scale. The project is the first Fannie Mae green mortgage loan secured by a property with a green building certification in our Towards Zero Group.
This communication is for informational purposes only. It does not constitute an offer to sell securities. In particular, it does not constitute an offer to the general public in the European Union. Before considering an investment in any Fannie Mae security, prospective investors should obtain and ensure they have read and understood the offering documents and any related disclosure information related to such securities.