Prepared Remarks of Secretary Shaun Donovan Launching the Green Refinance Plus Program

Eden Issei Terrace, Hayward, California
Tuesday, May 31, 2011

Thank you, Mayor Sweeney, for that kind introduction and for your more than two decades of service leading the city of Hayward.

It's great to be here at Eden Issei Terrace to announce the launch of Green Refinance Plus -- the Obama Administration's new nationwide effort to win the future by laying the foundation for the clean energy economy.  

After all, with prices at the pump in California above $4 per gallon, the Bay Area knows as well as anyone the burden that gas prices are placing on families and businesses. 

While there is no "silver bullet" to address rising gas prices in the short term, President Obama has put forward a plan to ensure the American people don't fall victim to volatile energy costs over the long term.

With 40 percent of America's carbon emissions coming from our buildings, part of that plan is building and retrofitting homes that cost less to power, heat and cool.

That's why of the nearly $14 billion in Recovery Act funds HUD has invested in communities across the country, we ensured that nearly a third could be used for "greening" America's public and assisted housing stock.

With these funds, the Obama Administration is on track to provide 245,000 affordable homes with a range of energy improvements, while another 55,000 affordable homes receive green retrofits that will save up to 40 percent in energy costs for families.

Dozens of those homes are right here at Eden Issei Terrace, which is providing 100 homes for low‐income seniors living largely on fixed incomes. 

Thanks to the resourcefulness of Eden Housing, a dedicated and experienced affordable housing developer and owner and using three-quarters of a million dollars in Recovery Act funds, Eden installed high efficiency water heaters, energy efficient lighting for the units and common areas, green insulation, and other upgrades -- and was able to leverage those funds with California solar rebates to make further energy improvements like the installation of a solar system. 

All told, Eden's energy upgrades are already saving seniors and Eden 20 percent in water costs, 38 percent in gas costs, and 44 percent in electric bills.

Just as importantly, this investment has created good-paying design and construction jobs that can't be outsourced.

Properties across the country like Eden Issei are proving that investments in green housing pay for themselves, provide real benefits to families and create jobs. 

Our challenge now is to catalyze change on a scale that is truly transformational -- driven not just by the public sector but more importantly through the massiveprivate investment we need to win the future.

That's why the Obama Administration is launching Green Refi Plus -- which builds on the Recovery Act to unlock the private capital we need to retrofit thousands of multifamily apartments in America's affordable housing stock. 

A joint effort between HUD's Federal Housing Administration and Fannie Mae, Green Refi Plus will help owners of older affordable housing properties that were originally developed with the aid of the Low Income Housing Tax Credit program be among the first to go green at the same time as they refinance their mortgages at today's historic low interest rates.

While FHA provides additional insurance coverage, Fannie Mae will offer loan underwriting that will generate additional loan proceeds to make green improvements.

A typical development will be able to access a loan that is 5 percent larger. 

For a $5 million loan, that means an additional $250,000 will be available to support energy-saving green systems and appliances that cool and heat properties more efficiently -- saving owners and renters money, while reducing energy use and greenhouse gas emissions.

By allowing owners to refinance on better terms at the same time they make energy upgrades that save money over the long haul, Green Refi Plus provides real bang for the buck -- and another jolt to our economy. 

Over the next four years, the green building industry will support nearly 8 million jobs and generate more than a half trillion dollars in economic activity -- and with tools like Green Refi Plus and our recently launched FHA PowerSaver initiative for single-family home retrofits, even more.

Together, these efforts reflect a fundamental belief of President Obama's, of Mayor Sweeney's and myself:

A belief that when we invest in clean energy, we invest in a new generation of professionals, ready to build, install, repair and maintain clean energy technologies.

A belief that greening our homes is one of the keys to the 21st century economy -- and to out-innovating our competitors.

A belief that real change requires a market transformation with leadership, solutions and capital from the private sector.

Driving that change is what Green Refinance Plus is about -- and why I'm so proud to unveil it here today. Thank you.

###