Financing Energy Savings And Resilient Homes With MassHousing's Community Climate Bank

When Massachusetts lawmakers set some of the most ambitious carbon reduction goals in the country, aiming to achieve net-zero carbon emissions by 2050, they recognized that tackling emissions generated by the built environment, particularly housing, would need to be a top priority. 

“Nearly 20% of total emissions come from residential homes,” said Maggie Super Church, director of policies and programs at the Massachusetts Community Climate Bank. “To hit our targets, we need to be thinking about how to make homes more energy-efficient, healthier and more comfortable to live in.” 

In 2023, Gov. Maura Healey announced the formation of the Massachusetts Community Climate Bank at MassHousing with $50M in seed funding from the commonwealth of Massachusetts.

“These funds will allow us to develop innovative solutions that address housing and energy affordability as well as climate goals,” Super Church said.

Aging Housing Stock And Rising Energy Costs

Much like the rest of the country, Massachusetts is grappling with both rising energy costs and an affordable housing crisis. The state’s aging, energy-inefficient housing stock only exacerbates these issues as low- and moderate-income residents take on additional financial strain in the form of higher utility bills.

“People who struggle to afford housing often don’t get the benefits of clean energy technologies,” Super Church said. “The burden of higher energy bills can be especially difficult for them.” 

The Community Climate Bank at MassHousing is dedicated to helping residential property owners cut their energy use and reduce or eliminate their reliance on fossil fuels while making their homes more comfortable and healthier. 

To achieve these goals, the Climate Bank directs money toward three uses: retrofits and upgrades to make buildings more energy-eefficient, transitioning away from fossil fuel usage and toward electrification, and installation of on-site renewable power generation. 

“We want to get the whole building sector moving to a place where greenhouse gas emissions are lowered and residents are better protected from extreme heat, flooding and power outages,” Super Church said. 

Preservation And New Construction

As MassHousing continues to expand financing of Passive House new construction projects, it is also ramping up financing for the preservation of existing affordable housing that incorporates energy-efficiency measures, Super Church said.

This is critically important, as older buildings typically consume more energy per square foot than new construction.  

“MassHousing has a long track record of financing extremely efficient new construction,” she said. “The agency has provided more than $408M in financing for the creation of over 1,600 new rental homes that meet Passive House standards.”

These Passive House structures require significantly less energy to heat and cool due to their tight building envelopes, she said. 

The Climate Bank is also providing financing for several deep energy retrofit projects in existing affordable housing that incorporate energy efficiency, electrification, clean energy and climate resilience measures, Super Church said. Through this program, the Climate Bank will demonstrate how clean energy and affordable housing investment work together to create better outcomes for low-income residents and the climate, Super Church said.

“Achieving long-term energy affordability means retrofitting the homes we have today to make them more efficient to heat and cool and more comfortable to live in, while reducing fossil fuel consumption,” Super Church said. “Through this demonstration program, the Climate Bank is accelerating investment in affordable rental homes and collecting crucial data that will help scale up our investments in large-scale deep energy retrofits.” 

Hitting The Ground Running

During its startup phase, the Climate Bank prioritized leveraging the existing relationships, infrastructure and institutional expertise of its umbrella organization, MassHousing, which has issued over $6.8B in residential loans in the last decade and has nearly 60 years of experience delivering complex financial transactions and structuring public-private housing finance solutions. 

“Situating the Climate Bank within MassHousing has allowed us to get up and running much more quickly than we otherwise could,” Super Church said. “Other green banks around the country were started from scratch, and we saw it can often take a couple of years or more to begin any sort of lending activities.” 

Through the Climate Bank’s Energy Saver Home Loan Program, low- and moderate-income homeowners can get support from a high-touch service team, which helps with identifying and applying for all available rebates, incentives and credits. The Climate Bank works to ensure that homeowners have access to low-interest loans and have help navigating the complexity of energy-efficient upgrades. 

The Energy Saver Home Loan Program is flexible and can finance projects ranging from incremental home energy improvements to whole-home retrofits. Many customers have chosen to undertake projects of significant scope, including insulation improvements, replacing fossil fuel-fired heating systems with electric heat pumps, and installing rooftop solar panel systems. 

MassHousing has closed more than $5M in energy savings financing to homeowners across the state since launching the program last year. The Energy Saver Home Loan Program has a goal of helping customers achieve a minimum energy savings of 20%. To date, program customers have significantly exceeded that figure. The average modeled energy reduction is 56%. Nearly one-third of Energy Saver customers have achieved home energy savings of at least 70%.

“We are the nation’s first green bank focused specifically on the link between affordable housing and clean energy,” Super Church said. “We’re a bridge between the two worlds, making sure resources are delivered as efficiently as possible.” 

This article was produced in collaboration between MassHousing and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.