Multifamily Housing: Billions in Loans and Grants for Energy Efficiency

The U.S. Department of Housing and Urban Development has opened the door to one of the largest federal investments ever aimed at retrofitting affordable multifamily housing. Announced at the CLPHA Housing Is Summit, the Green and Resilient Retrofit Program (GRRP) makes $837.5 million in grant and loan subsidy funding and up to $4 billion in loan commitment authority available to owners of HUD-assisted multifamily properties. The money, authorized by the Inflation Reduction Act of 2022, will bankroll energy efficiency upgrades, water conservation, renewable energy installations, and climate-resilience improvements at properties serving low-income households across the country.

A First-of-Its-Kind Climate Investment for Affordable Housing

GRRP is the first HUD program to simultaneously tackle climate resilience, greenhouse gas emissions, and utility costs at affordable housing properties. Congress wrote the program with three goals in mind: reduce energy and water use in HUD-assisted multifamily properties, make those properties more resilient to extreme weather events and natural disasters, and cut greenhouse gas emissions both directly and through the use of lower-embodied-carbon materials.

For residents, the practical benefit is simpler. Upgrades funded by GRRP are expected to lower utility bills, improve indoor air quality, reduce heat and cold stress during grid failures, and extend the useful life of aging affordable housing stock that might otherwise fall out of the subsidized inventory.

Three Award Cohorts for Different Property Needs

HUD structured the program around three parallel Notices of Funding Opportunity, each designed for properties at a different point on the green-retrofit learning curve.

The Elements cohort targets owners who are already planning a recapitalization and want to add climate-resilient components. Individual awards are capped at the lesser of $40,000 per unit, $750,000 per property, or the actual cost of eligible investments.

The Leading Edge cohort is aimed at owners pursuing ambitious, whole-building retrofits that meet advanced green building standards. HUD expects to fund roughly 100 awards from about $400 million, with individual awards reaching up to $60,000 per unit or $10 million per property.

The Comprehensive cohort is the largest, with approximately $1.47 billion available for around 300 awards. These awards are intended for properties with the greatest physical and climate needs, offering up to $80,000 per unit or $20 million per property.

Grants, Low-Interest Loans, and Flexible Terms

GRRP funding comes in two forms: direct grants and 1% "surplus cash" loans that owners only repay when the property has surplus cash available. That structure is critical for affordable housing, where tight operating margins often make conventional debt impossible. By pairing grant funding with patient, low-cost capital, HUD is effectively allowing owners to layer GRRP with Low-Income Housing Tax Credits, FHA-insured financing, and state or local resources.

Eligible properties include those with project-based Section 8 contracts, Section 202 housing for the elderly, and Section 811 housing for persons with disabilities. Owners can use funds for a broad menu of improvements: solar photovoltaic systems, battery storage, heat pumps, high-efficiency windows, building envelope upgrades, low-flow water fixtures, EV charging infrastructure, and resilience features like storm shutters, elevated electrical systems, and backup power.

Why This Matters for Residents and Communities

HUD-assisted multifamily properties house more than 1.4 million low-income households. Many of these buildings were constructed decades ago and carry high operating costs that ultimately get passed through to tenants as higher rents or reduced property services. Energy and water are often the second-largest line item after debt service.

By underwriting deep retrofits, GRRP should reduce operating costs, protect tenants from utility shutoffs, and keep properties financially viable well into the future. The resilience component is equally important: affordable housing residents are disproportionately exposed to extreme heat, flooding, and power outages, and typically have the fewest resources to recover when disaster strikes.

What Owners Should Do Next

Owners of qualifying multifamily properties should review the GRRP implementing notice (Housing Notice H 2023-05) and the three NOFOs to determine which cohort fits their scope, timeline, and technical capacity. HUD has emphasized that properties with the highest climate vulnerability, deepest affordability, and clearest retrofit plans will score best. Applicants should begin assembling energy audits, resident engagement plans, and capital needs assessments immediately, as demand for GRRP dollars is expected to significantly outstrip the available funding.