A New Source of Money for Co-op and Condo Energy Projects

For many New York City co-op and condo boards scrambling to reduce their buildings’ carbon emissions to comply with Local Law 97, there is one gnawing question: How will we pay for the necessary retrofits?

The New York City Energy Efficiency Corp. (NYCEEC), a nonprofit source of funds for clean-energy and energy-efficiency projects, has a new answer to this question. It’s called a Multifamily Express Green Loan, and it has reduced the application process for clean-energy projects to as little as six weeks. And co-op and condo boards that act before March 31 will avoid the closing fee, which equals 1% of the loan amount.

“What’s new is that it’s a concerted effort to streamline the loan process,” says Jay Merves, the director of business development at NYCEEC. “With Local Law 97 going into effect next year, we’re seeing increasing borrowing activity by co-ops and condos, as well as by rental landlords and commercial buildings. We asked ourselves how we could focus a product for the co-op and condo market. How could we streamline the loan application process enough to bring down upfront costs?”

Multifamily Express Green Loans can help pay for projects with environmental benefits, including solar panels, roof and building envelope upgrades, electrification, battery storage, windows and other retrofits that will help bring New York City buildings into compliance with Local Law 97. (The loans are also available statewide.) There is a $2,500 legal fee. The interest rate is 7%, and after March 31 there will be a 1% closing fee. The loans start at $200,000 and cover up to 90% of eligible projects. Their term is the construction period plus a 10-year amortization period.

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“If a board is working with the NYC Accelerator or Solar One, the interest rate is reduced to 6.5%,” Merves says. “If a board is not already working with either group, we’ll be happy to put them in touch.”

NYC Accelerator is a city agency that provides free consultation on energy retrofits, while the nonprofit Solar One, as its name implies, helps building owners launch solar energy projects.

Multifamily Express Green Loans carry a couple of other benefits. No energy audit is required, and there is no prepayment penalty if the borrower chooses to pay off the loan before the term expires. 

These loans are not to be confused with PACE (Property Assessed Clean Energy) Loans, which are administered by NYCEEC. Based on an energy audit, a PACE loan finances improvements that reduce a co-op’s energy costs. (The loans are not available to condos.) But instead of repaying the lender directly, the co-op makes payments through an assessment on its property taxes — with a corresponding tax lien on the property. The term of a PACE loan is tied to the useful life of the improvement. The theory is that the energy savings realized from the improvements will more than cover the repayment costs. One hitch: co-op boards must get written consent from their underlying mortgage holder before they can qualify for a PACE loan.

To begin the Multifamily Express Green Loan process, co-op and condo boards can send an email to greenloans@nyceec.com. For more information, visit the corporation’s website at https://nyceec.com/

“We’re just getting started with Multifamily Express Green Loans,” Merves says. “We have applications out. The main thing co-op and condo boards need to know is that they can fill out the application and begin the process right now.”