Mortgage-backed securities (MBS) giant Fannie Mae announced the issuance of a single-family green MBS, as part of its green bond program. The issue marks Fannie Mae’s fifth under the firm’s Single-Family Green MBS since its initiation in April 2020. To date, the program has issued over $40 million, including $11.4 million in the most recent transaction.
The single family market is a relatively new focus area for the firm’s green MBS transactions. Fannie Mae’s green MBS program has focused primarily on the multifamily segment, with transactions in this area reaching $75 billion over the past 10 years. Fannie Mae is the world’s largest issuer of green bonds since 2017.
Hugh R. Frater, Chief Executive Officer, Fannie Mae, said:
“We are proud to be a driver of innovation in green mortgage finance. Our new Single-Family Green MBS issuances further our commitment to sustainability in our business, the homes we finance, and the communities we serve. These transactions are the latest step in a journey – begun a decade ago when we introduced green finance to the multifamily market – that increasingly ties Fannie Mae’s business activities to measurable Environmental, Social, and Governance (ESG) outcomes.”
Fannie Mae’s Single-Family Green MBS program recently received a Light Green Second Opinion from CICERO Shades of Green, a leading global provider of independent, research-based evaluations of green finance frameworks. The transactions include only mortgage loans backed by newly constructed single-family residential homes with ENERGY STAR certifications that meet or exceed the national program requirements for ENERGY STAR Certified Homes. ENERGY STAR Certified Homes are on average 20% more efficient than single-family homes built to code.
Renee Schultz, Senior Vice President, Capital Markets, Fannie Mae, said:
“We are excited about the Single-Family Green MBS program and look forward to increasing our issuances backed by green, energy-efficient mortgage loans. These offerings have attracted investor interest and serve to enhance liquidity in the single-family mortgage finance market.”