Energy Efficiency Linked to Lower Commercial Mortgage Default Rates

Energy panels against grass background

A recent study found that commercial buildings, including apartment complexes, with high energy costs and consumption have higher default rates than more energy efficient buildings. However, energy expenses are not typically included in building appraisals or development pro formas, meaning that lenders often cannot factor them into the underwriting process.

In North Carolina, newly constructed apartments financed through the Housing Credit program are required to be ENERGY STAR certified and all developments must have Energy Star rated refrigerators and dishwashers and energy-efficient water heaters.