Since the signing of the Inflation Reduction Act (IRA) in late summer 2022, the commercial real estate industry has been aglow from the potential for much needed funding to support their ventures and bolster transaction volume. The overall goal and mission of the many Partners, such as investors, developers, owners and government entities, particularly in multi-family, is to address the nationwide affordable housing shortage. The HUD Green and Resilient Retrofit Program (GRRP) is the latest example that embodies the push to modernize the most important sector in multi-family development.
About HUD GRRP
The Green and Resilient Retrofit Program funding is provided through the Inflation Reduction Act (IRA), and designed to provide owners and purchases of a property with direct loans and grants in order to retrofit their properties and make them more energy efficient, climate resilient, and healthier for the tenants. More specifically, the funding would allow owners to implement measures for carbon emission reduction, improving energy and water efficiency, improving indoor air quality, switching to lower emission building materials, making property resilience upgrades, switching to renewable energy, and implementing building electrification, etc.
Owners or purchasers of a property that is part of HUD Multifamily Assistance programs are eligible.
Project-Based Rental Assistance (PBRA) HAP Contracts
- Including RAD PBRA HAP contracts executed on or before September 30, 2021
- Project Rental Assistance Contracts (PRAC) Direct Loans
- Pre-1974 Section 202 Direct Loan
- Other small programs listed in in Section 3 (Eligibility Information) of the NOFOs available on hud.gov/GRRP
HUD GRRP’s 3 Cohorts/Award Types
There are 3 Cohorts, or types of awards designed for properties at different stages of development. The 3 cohorts differ in the level of commitment from the owner and the type of retrofits done, as well as the total amount of the rewards.
Total funding available for Elements Cohort is $140 million and funding is available for up to $40k per unit or $750k per property. HUD expects to grant approximately 200 awards in this Cohort.
This award is designed for owners who are already well advanced in the process of recapitalization effort, and is meant to provide gap financing to add or preserve greener and/or more climate resilient items to the property. The funding can be used to pay for utility efficiency, renewable energy, carbon emission reduction, and/or climate resilience measures. Specific eligible investments are listed in the Notice of Funding Opportunity (NOFO), and include items such as heat pumps, sustainable building materials, and solar panels.
Leading Edge Awards
Total funding available for the Leading Edge Cohort is $400 million and funding is available for up to $60k per unit or $10 million per property. HUD expects to grant approximately 100 awards in this Cohort.
This award is designed for owners who may be at the preliminary or more advanced stages of planning a recapitalization of the property. To be eligible, more than 50% of the units at the property must be HUD-assisted, and receipt of full GRRP award requires the property to achieve an approved green certification.
This medium sized cohort is good for owners who are more ambitious, want to attain green certifications for their properties and are committed to energy efficiency and decarbonization measures.
Total funding available for the Comprehensive Cohort is $1.47 billion and funding is available for up to $80k per unit or $20 million per property. HUD expects to grant approximately 300 awards in this Cohort.
This award is designed to fund deep retrofits for utility efficiency, renewable energy generation, carbon emissions reductions, and climate resilience. The award helps to reduce costs to the owner, and the scope of work will be developed in partnership with a HUD-provided contractor in order to help design an impactful project. The award is applicable to all eligible HUD-assisted multifamily property owners regardless of construction experience or greening expertise, and more than 50% of the units at the property must be HUD-assisted.
Award Application Timelines
Each cohort accepts applications quarterly over the course of 12 months:
- Elements Application Waves: June 2023, September 2023, January 2024, March 2024
- Leading Edge Application Waves: July 2023, October 2023, January 2024, April 2024
- Comprehensive Application Waves: August 2023, November 2023, February 2024, May 2024
How Partner Can Help
Partner Energy, alongside our parent company, Partner Engineering and Science help identify elements to be incorporated into a developers’ Scope of Work to improve energy efficiency, minimize energy use and emissions, replace fossil fuel systems with systems using electric power, and integrate renewable energy generation sources, all towards the goal of minimizing or eliminating the emissions of each property and achieving the owner’s selected certification.
A wholistic approach to due diligence will be the path forward and Partner has the tools and experts to administer the consultation and guidance necessary to navigate this new program and its benefits. Partner is not just our name, it is the way we approach each and every deal and service we provide to our clients, in Partnership. Which is why we have focused on assembling a team that understands not only standard due diligence, but complicated environmental concerns, aged building systems and their needs, how to economically achieve energy efficiency and sustainability, and incorporating climate resiliency to steward affordable housing residents can be proud to call home.
Contact Partner today to learn more about the program and how we can help.