How New Federal Policy Raises the Bar for Energy-Efficient Housing

In May 2024, the US Departments of Agriculture (USDA) and Housing and Urban Development (HUD) revised their minimum home energy standards for new construction. This update is significant as it promises residents in newly supported homes lower utility bills, enhanced resilience to extreme weather conditions, and overall more comfortable and healthier living environments.

According to RMI, this month, the Federal Housing Finance Agency (FHFA) is considering a similar move as regulator and conservator of the Government Sponsored Enterprises (GSEs), including Fannie Mae and Freddie Mac. While best known for their support of single-family home mortgages, the GSEs collectively back about 40% of outstanding debt on US multifamily properties. A change of policy from FHFA would likely affect hundreds of thousands of new apartments annually.

Between the HUD-USDA standard and a potential FHFA decision soon, updated energy standards are poised to make a big impact on higher density housing. The combination of updated efficiency standards and incentives for new apartment buildings will create win-wins for residents, developers, and the climate that affects all of us.

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