Multifamily Energy Efficiency Improvement Programs

Multifamily Energy Efficiency Improvement Programs

​The purpose of the Maryland Department of Housing and Community Development’s multifamily energy efficiency improvement programs is to promote energy efficiency and affordability in the State’s multifamily rental housing developments for low and moderate income households. These improvements are intended to reduce a building’s energy use and lower utility bills for occupants and owners

Under these programs, the department will provide low cost loans and grants with flexible terms for the purchase and installation of energy efficiency improvements in affordable multifamily rental housing developments. The program is being undertaken as part of the State’s efforts to: 1) promote energy efficiency and renewable energy sources; and 2) create and preserve affordable rental housing opportunities.

Eligible Types of Housing

The Maryland Department of Housing and Community Development’s multifamily energy funds are restricted to affordable multifamily rental properties. “Affordable” means rental housing with existing income or rent restrictions, or housing with units that serve tenants with low to moderate incomes, as determined by the department. Multifamily rental housing may include apartment buildings, townhouses, single-family homes, single room occupancy and shared housing facilities with five (5) or more units. Eligible applicants include non-profit organizations, for-profit organizations and governmental entities.

Eligible Activities

Multifamily energy funds are used to make loans and grants for the purchase and installation of cost effective energy conservation measures identified by an Energy Audit. The department will target (but not be limited solely to) a package of energy conservation measures that collectively demonstrate a minimum Savings to Investment Ratio of 1.1. Selected energy conservation measures are expected to result collectively in a 15 percent or greater reduction in the electric consumption of eligible properties.

Energy Audits and Auditors (Rehabilitation Only)

For projects which involve the rehabilitation of existing multifamily rental housing, the proposed energy conservation measures must be based on an Energy Audit completed by a department-Qualified Energy Auditor (see the department’s Qualified Auditor List). In order to establish best practices and guidance for conducting the energy analysis required for multifamily building energy improvement projects, the department has adopted the use of the Building Performance Institute’s Multifamily Building Analyst Standard and the department Multifamily Energy Audit Guide (see the department’s Multifamily Energy Audit Guide).

The energy auditor must hold a current Building Performance Institute Multifamily Building Analyst Certification, hold a current Building Science, Building Analyst, Building Envelope, or similar building science certification, and also demonstrate a minimum of two (2) years of experience completing energy audits on multifamily residential buildings.

The Energy Audit must provide an estimate of utility use reductions and expense savings for both the tenant and the owner that are expected to result from installing the recommended energy conservation measures. Specifications of the existing equipment/conditions for all recommended measures must be identified. A breakdown of tenant vs. owner savings must be identified for each measure. The Multifamily Energy Property Data Sheet must be included with the energy audit and can be used in place of the Energy Conservation Measure Chart.

The Northeast Energy Efficiency Partnerships Mid-Atlantic Technical Reference Manual 5.0 will be used as verification of savings reported when selecting qualified measures. The Maryland Department of Housing and Community Development’s estimated useful life chart based on the TRM should be used to determine the estimated useful life of a measure.

Quality Control

Projects incorporating any of the following measures: air sealing, insulation, duct sealing and duct insulation, and installation of mechanical ventilation, require a department Qualified Energy Auditor to perform quality control inspections on this work. Air sealing, duct sealing, and mechanical ventilation require the use of appropriate diagnostic equipment to verify air leakage reductions and fan flow values.

Audit and Quality Control Costs

At the Maryland Department of Housing and Community Development’s discretion Multifamily Energy Efficiency and Housing Affordability-EmPOWER funds can also be used to reimburse at least a portion of the cost of an energy audit/study and quality control inspections where a property installs all of the measures agreed upon and approved by the department.

Funding Eligibility

Projects which involve the rehabilitation of existing multifamily rental housing are eligible for the Maryland Department of Housing and Community Development’s multifamily energy funding for qualified energy conservation measures as detailed in an acceptable Energy Audit as follows:

  • 100% of the cost of qualified energy conservation measures that collectively demonstrate a Savings to Investment Ratio of 1.1;
  • Partial funding (“cost sharing”) of qualified energy conservation measures that collectively demonstrate a Savings to Investment Ratio​ of less than 1.1 when energy funding is matched with other funds to bring the item(s) into a Savings to Investment Ratio criteria compliance.

Projects which previously received energy efficiency funding from the department, or other energy funding providers, may be eligible for funding of additional energy conservation measures, and will be evaluated on a case by case basis.

Current Multifamily Energy Programs

Multifamily Energy Efficiency and Housing Affordability-EmPOWER

Multifamily Energy Efficiency and Housing Affordability-EmPOWER is funded by utility Rate payers (utility customers) through utility companies serving Maryland and regulated by the Public Service Commission. The Maryland Department of Housing and Community Development has a total of $15 million (residential) and $5 million (commercial) to fund incentives in multifamily properties in Calendar Years 2015-2017.

Only individually and mixed metered projects located in the service territories of the following utility companies are eligible for funding (See the Service Territory Map.)

Eligible Utility Companies:

  • Baltimore Gas and Electric Company (BGE)
  • Delmarva Power
  • Potomac Edison
  • Potomac Electric Power Company (PEPCO)
  • Southern Maryland Electric Cooperative, Inc. (SMECO)

Each of these utility companies has entered into a Memorandum of Agreement with the department which further dictates the terms of financing eligible projects.

Multifamily Energy Efficiency and Housing Affordability-EmPOWER funds may only fund the costs of energy conservation measures which result in the reduction of electrical (kWh) usage. Energy conservation measures which result in savings associated with oil or water usage are not eligible for funding under Multifamily Energy Efficiency and Housing Affordability​-EmPOWER. Energy conservation measures which result in savings associated with natural gas usage are only eligible for funding under Multifamily Energy Efficiency and Housing Affordability-EmPOWER in the BGE service territory.

Multifamily rental housing projects involving new construction, properties not currently in service, or a change in use are eligible for Multifamily Energy Efficiency and Housing Affordability-EmPOWER funding only for the incremental cost of qualified energy conservation measures that exceed current Energy Code. A detailed savings report utilizing the TRM algorithms must be provided in order for the department to determine program eligibility. The report must identify and compare the cost, estimated kWh usage, and cost of use for both the code baseline condition and the higher efficient condition proposed for the project. As a general rule, new construction, properties not currently in-service, or a change in use projects will qualify for far less Multifamily Energy Efficiency and Housing Affordability-EmPOWER funding per unit than projects which involve rehabilitation.

Customer Investment Fund

Funding of the Customer Investment Fund comes as part of the Public Service Commission of Maryland’s Order which approved the merger between Exelon Corporation and the Constellation Energy Group. The Maryland Department of Housing and Community Development has a total of $7.4 million for this program available to fund incentives in multifamily properties over a three-year period through a multi-part initiative.

Properties that are master-metered and located within the BGE territory will be targeted. New construction projects are not eligible.

Customer Investment Funds may fund the costs of energy conservation measures which result in the reduction of electrical (kWh), fossil fuel, and water usage.

​Portfolio Energy Retrofits

Low cost loans will be made available for the funding of energy retrofits in affordable multifamily projects which are in the department’s existing portfolio or are in process for other department rental financing for acquisition and rehabilitation. Properties which undergo aggressive energy improvements resulting in over 30% energy reduction will be incentivized with more favorable interest rates.

How to Apply

Non-Pipeline (applicants not seeking other department financing):

Pre-Screening:

  • Complete and return the Pre-Application section of the The Department Multifamily Energy Application
  • The department will contact the applicant to schedule a pre-audit inspection
  • The department will provide a written report detailing potential opportunities for energy improvements

If Applicant wishes to proceed:

  • Applicant will obtain tenant consent to release utility usage (see the Customer Energy Usage Release Form) along with at least one applicant utility bill for all utilities.
  • Applicant will contract to have an energy audit performed by an auditor listed on The Department’s Qualified Auditor List
  • Applicant will solicit bids for the implementation of the identified energy measures. Applicant may also include bids for “non-recommended” measures the applicant may wish to incorporate into the project at a partial (cost sharing) amount.
  • Applicant submits the completed The Department Multifamily Energy Application along with the supporting documentation to the department as outlined on the application. PDF files are preferred.

Pipeline (applicants seeking other department financing):

Projects seeking the Maryland Department of Housing and Community Development energy funding in addition to other department rental housing financing (“pipeline projects”) will have the Energy application and review process integrated with the deparment’s application and underwriting for other rental housing financing. A separate application for multifamily energy funding is not required for projects seeking other department financing.

All applications should clearly identify the amount of energy funding requested in accordance with the conclusions of the Energy Audit and within the parameters outlined above in Funding Eligibility. Contractor price proposals identifying individual Energy Conservation Measure costs for labor and material must be provided.

Applications will be accepted on an on-going basis and evaluated based on readiness to proceed and how the project furthers both the energy efficiency and the housing affordability purposes of the program.

Application Processing and Funding Requirements

Complete applications will be assigned to a department underwriter and energy construction management officer for further review. Initial review will include review of a Dun and Bradstreet credit analysis of the applicant, confirmation that the project is located in a Priority Funding Area, historic review of the property in conjunction with the Maryland Historic Trust, and a review of the applicant’s prior experience and performance (if any) with the department.

The assigned underwriter will also confirm the affordability status of the project with the applicant. For projects with existing affordability restrictions, a minimum of five (5) years of affordability must remain, otherwise an extension of affordability will be required. If a property has no existing affordability restrictions, a 5 year period of affordability will be imposed on the property.

For “non-pipeline” projects, the department will seek to issue a Reservation Letter. Upon issuance of a Reservation Letter, the applicant will be required to finalize cost estimates and select a contractor(s) to complete the proposed energy conservation measures. A Reservation Letter is not a commitment to provide funding to a project.

Upon the receipt of final contractor pricing, the energy funding award will be finalized with adjustments made to eligible amounts based on a recalculation of the Savings to Investment Ratio reflective of final pricing. Closing on energy funding will occur after the deparment has received, reviewed and approved all required documentation as outlined in the Commitment Letter.

The deparment energy funds will be disbursed during the course of construction as work is completed and approved by the department. All disbursements will be subject to a 10% retainage requirement. Requisitions for Multifamily Energy Efficiency and Housing Affordability-EmPOWER funds must be completed on the department Requisition Forms (Pipeline/Non-Pipeline ) and will require supporting documentation verifying the installation and specifications of qualified energy conservation measurements.

Projects which receive energy funds must agree to allow the department to track the project’s energy usage (both landlord and tenant) for at least 24 months following completion of work as well as collecting 24 months pre-retrofit usage. It will be necessary to obtain each customer’s consent to release utility usage (see the Customer Energy Usage Release Form).

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    CONTACT: Multifamily Housing Programs
    Community Development Administration
    Maryland Department of Housing and Community Development
    7800 Harkins Road, Lanham, MD 20706
    Toll Free: 1-800-543-4505

    Danielle England, Housing and Building Energy Programs
    P: (301) 429-7733
    E: Danielle.England@maryland.gov

    Scott Falvey, Multifamily Energy Efficiency Program Manager, Housing and Building Energy Programs
    P: (301) 429-7739
    E: Scott.Falvey@maryland.gov​​

    ​​​​Notices​​

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