The Inflation Reduction ACT (IRA) became law on August 16, 2022. Listed in Section 30002 of Title III of the IRA, it is titled “Improving Energy Efficiency or Water Efficiency or Climate Resilience of Affordable Housing”. The act covers multiple spending provisions, including the HUD Green and Resilient Retrofit Program (GRRP) which sets aside $837.5 million for grants and loans to improve climate resiliency and improve energy efficiency in HUD residences.
HUD offers three programs to help property owners meet the requirements during all stages of improvements and/or developments.
Here’s a brief look at the three programs.
The Elements Program provides funding up to $40K per unit or $750K for the entire property. Funding is awarded to property owners in the process of using proven methods to increase the property’s resilience to climate change and increase energy efficiency. Some examples of eligible projects include installing Energy Star windows, electric HVAC heat pumps, systems that generate clean energy, and fire-resistant roofs. These are only a few examples of projects that qualify for Elements Program funding. Currently, HUD is expecting to use its $140 million in funding for approximately 200 awards.
Leading Edge is a GRRP program providing up to $60k per unit or $10M per property in funding. The program focuses on properties working to achieve advanced green certification through various retrofit projects. This program is designed for properties in the project planning stages as a way for owners to recoup some of the costs. Leading Edge will provide funding up to the project’s predicted financial strategy. Its goal is to help these projects reach the highest levels of climate resilience and energy efficiency for recognition by programs such as PHIUS and LEED. HUD is expecting to use the $400 million in funding to support an estimated 100 projects.
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Comprehensive is the third GRRP program offering funding up to $80K per unit or $20 million per property. The program is committed to supporting properties with the greatest need for utility efficiency and/or climate resiliency. Past development and retrofit experience are not factored into the funding awards. Property owners that are approved for the funding will have access to support to assistance with project planning to meet the property’s specific needs. GRRP retrofit projects are also included in the Comprehensive program. HUD is expecting to use its $1.47 billion in funding for an estimated 300 awards.
An Overview of GRRP Funding Requirements
To be selected for any of the three GRRP programs property owners will need to meet the following requirements.
- Elements: The property owner must have a source of funding in place and complete third-party due diligence reports.
- Leading Edge: Before receiving funding, property owners must demonstrate the property’s requirements necessary to meet green certification standards. An assessment showing that certification is possible is also required from an engineer or architect.
- Comprehensive: Property owners must demonstrate their property’s energy efficiency needs or show it is at risk from climate hazards. The property owner must work with a HUD contractor to access the property, develop the project proposal, and have a retrofit financing plan.