Implementing HUD’s 

Energy Strategy 

Progress Report

U.S. Department of Housing and Urban Development 

Office of Policy Development and Research

Energy Task Force

Submitted Pursuant to Section 154

Energy Policy Act of 2005
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Progress Report

Implementing HUD’s 

Energy Strategy 

Energy Task Force 

Submitted Pursuant to Section 154 

Energy Policy Act of 2005 

December 2008 

U.S. Department of Housing and Urban Development 

Office of Policy Development and Research 

Contents 

Executive Summary ................................................................................................................................ 1


A.	 Introduction....................................................................................................................................... 3


Estimated Energy Savings ................................................................................................................ 3


Selected Accomplishments ............................................................................................................... 4


Congressional Actions Impacting HUD ........................................................................................... 5


B.	 Energy Costs and Affordable Housing.............................................................................................. 6


Residential Energy Trends ................................................................................................................ 6


Rising Energy Prices......................................................................................................................... 7


Impact on Low-Income Families ...................................................................................................... 7


HUD’s $5 Billion Energy Bill........................................................................................................... 8


Public Housing.................................................................................................................................. 9


Assisted Housing ............................................................................................................................ 10


Utility Allowances .......................................................................................................................... 10


C.	 HUD’s Energy Strategy................................................................................................................... 12


D.	 Progress to Date ............................................................................................................................. 14


I.	 Departmentwide ....................................................................................................................... 14


II. 	 Community Planning and Development .................................................................................. 20


III. Public and Indian Housing ...................................................................................................... 24


IV. 	Housing—Single Family .......................................................................................................... 37


V. 	 Housing—Multifamily............................................................................................................. 42


VI. Other Actions ........................................................................................................................... 52


E.	 Moving to Green Building .............................................................................................................. 62


F.	 Energy Reduction Goals and Incentives ......................................................................................... 66


Appendixes............................................................................................................................................ 68


List of Tables 

Table B-1. Combined Energy Expenditures in Public and Assisted Housing (Including Water and 

Sewer) .................................................................................................................................. 8


Table B-2. PHA-Paid Utility Expenditures, 2001–06 (Including Water and Sewer Charges) .............. 9


Table B-3. PHA-Paid Energy Expenditures, 2004–06 (Electricity, Gas, and Fuel) .............................. 9


Table B-4. Estimated Owner-Paid Utilities in Assisted Multifamily Housing, 2004–06.................... 10


Table B-5. Utility Allowance Expenditures, 2007............................................................................... 11


Table D-1. Energy Performance Measures in HUD’s 2008 Management Plan .................................. 16


Table D-2. Partnerships Reported Per Region—FY 2007 ................................................................... 55


Table F-1. Possible Energy Performance Measures ............................................................................ 67


iii 
Executive Summary


As this report goes to Congress, the nation emerges from a period of record-high energy costs. The 

U.S. Department of Housing and Urban Development (HUD) has made progress in several areas 

toward fulfilling its commitment to promote energy efficiency in HUD’s inventory of public and assisted housing, as well as in housing financed through its formula and competitive grant programs. 

In its August 2006 report, Promoting Energy Efficiency at HUD at a Time of Change, HUD identified 

25 key actions to accomplish its objectives. The underlying goals of HUD’s Energy Action Plan, first 

announced in the 2006 report, were to provide information, incentives, and technical assistance to 

HUD consumers, partners, and other housing providers to assist in the development or design of new 

housing and in the management, maintenance, or operation of existing stock. 

This progress report, which is being submitted to Congress pursuant to Section 154 of the Energy 

Policy Act of 2005, describes the actions undertaken by the Department—both program and field 

offices—to address energy use and consumption in some 5 million housing units nationwide. A 

Departmentwide Energy Task Force consisting of representatives from HUD program offices, as well 

as Regional Energy Coordinators in each of HUD’s 10 regional offices have coordinated implementation of the Energy Action Plan. 

The linchpin of HUD’s energy programs is the Energy Star label—both Energy Star-qualified 

products and Energy Star-qualified new homes. Energy Star is now a widely recognized benchmark 

of energy efficiency, and HUD has partnered with the Environmental Protection Agency and the 

U.S. Department of Energy to encourage its affordable housing partners to build to the Energy Star 

standard for new homes or to buy Energy Star-qualified products and appliances. 

Since submitting the August 2006 report, the Energy Task Force has responded to a number of congressional directives. The Energy Independence and Security Act, enacted in December 2007, requires 

HUD to update its minimum energy standards for public, assisted, and insured housing to “meet or 

exceed” the 2006 International Energy Conservation Code. Congress also directed HUD and the 

Federal Transit Administration to create an interagency Working Group on transportation and housing 

to encourage the development of transit-oriented, affordable housing. The House Appropriations 

Committee also strongly encouraged HUD to move beyond incentives and voluntary measures and 

institute stronger energy and green building standards in HUD’s programs. 

Section A of this report highlights selected accomplishments and documents energy-saving results for 

those programs for which HUD collects data. In 2007 the Department reported a combined $33 million in energy savings in four program areas: the HOME Investment Partnerships (HOME) program, 

the Community Development Block Grant (CDBG) program, energy performance contracting in 

public housing, and the FHA-insured Energy Efficiency Mortgage program. HUD does not yet have 

tracking systems to monitor energy savings for its overall inventory of public and assisted housing. 

1

Section B of the report shows that HUD’s outlays for utilities continue to increase. The most recent 

data show that owners and tenants in public and assisted housing units spend an estimated $5.01 

billion, including $1.8 billion in public housing; $3.2 billion is spent on utility allowances through the 

tenant- and project-based rental assistance programs. This represents a 13.5 percent increase since the 

2006 report. 

Specific actions HUD has taken over the past 2 years to implement the measures reported to Congress 

are described in Section D of this report. They include the following: 

•	 Departmentwide. A successful training program on energy-efficient management and development 

of both multifamily and single-family housing was implemented in 2007 by HUD’s Office of Policy 

Development and Research. 

•	 Public	and	Indian	Housing. HUD developed a benchmarking tool that will assist public housing 

authorities in addressing utility costs as they shift to asset management and implemented a vigorous 

training and capacity-building initiative for energy performance contracting in public housing. 

•	 Community	Planning	and	Development.	The HOME Investment Partnerships program launched a 

new energy training curriculum and issued HUD’s first competitive grant program specifically for 

energy efficiency and green building. 

•	 Multifamily	Housing. HUD initiated a pilot program in California for Section 202 senior housing 

that provided energy audits for projects seeking refinancing. In addition, the Mark to Market 

program initiated a Green Remodeling Initiative, which was launched with a pilot project in 

Oklahoma. 

•	 Local	and	National	Partnerships. Many of HUD’s field offices partnered with local communities 

through the Energy Star Change a Light, Change the World Campaign, homeownership fairs, and 

other initiatives. 

•	 Energy	Star	Products	and	Appliances. HUD worked with the Department of Energy to develop 

Energy Star Quantity Quotes to enable multifamily building owners, public housing authorities, 

state and local governments, universities, and others to contact suppliers and negotiate discounted 

prices. See www.quantityquotes.net. 

In addition to these energy-related activities, HUD is beginning to address a broader green building 

agenda that addresses indoor environmental air quality, siting and location, materials selection, and 

water conservation. These activities are described in Section F. They are intended to complement the 

growing number of national green housing initiatives, such as the Enterprise Green Communities 

program, LEED for Homes, the Energy Star Plus Indoor Air Package, and the National Association of 

Home Builders’ (NAHB) Green Building Guidelines. HUD is also planning to “green” its own Robert 

C. Weaver headquarters building with a green roof, solar thermal and photovoltaic systems, new highperformance windows, and other energy-efficient measures. 

2

A. Introduction


In August 2006, HUD submitted a Report to Congress, Promoting Energy Efficiency at HUD at a 

Time of Change. Section 154 of the Energy Policy Act of 2005 stated that the Secretary “shall develop 

and implement an integrated strategy to reduce utility expenses through cost-effective energy conservation and efficiency measures and energy-efficient design and construction of public and assisted 

housing. The energy strategy shall include the development of energy reduction goals and incentives 

for public housing agencies.” 

HUD is required to report every 2 years on its implementation of the actions outlined in that report. 

According to the 2005 Act: 

“The Secretary shall submit a report to Congress, not later than 1 year after the date of the 

enactment of this Act, on the energy strategy and the actions taken by the Department of 

Housing and Urban Development to monitor the energy usage of public housing agencies and 

shall submit an update every 2 years thereafter on progress in implementing the strategy.” 

This report outlines progress that HUD is making to address rising energy costs through increased 

energy efficiency in public and assisted housing (as well as in housing financed through its formula 

and competitive grant programs).1 This progress report covers actions undertaken in Fiscal Year (FY) 

2007 and, where data are available, the first two quarters of FY 2008. 

The report addresses the steps HUD is taking to implement the 25 actions outlined in its 2006 report. 

This report also addresses actions that HUD is undertaking to address: (1) Congress’ and the affordable housing industry’s growing interest in and support for green affordable housing, (2) new legislation enacted by Congress since the 2006 report, and (3) directions and concerns included in FY 2008 

Appropriations Committee reports. 

Estimated Energy Savings 

While HUD does not yet have portfolio-wide energy savings data, an estimated $33 million in 

energy savings was documented in 2007 in the following four program areas: the HOME Investment 

Partnerships (HOME) and Community Development Block Grant (CDBG) programs, energy performance contracting in public housing, and the FHA-insured Energy Efficient Mortgage. Reported 

energy savings are as follows: 

1

 For the purpose of this report, this includes existing public housing units, HOPE VI new construction, Housing 

Choice vouchers, and FHA-insured or FHA-assisted multifamily housing, including Section 202 housing for the 

elderly. In addition, this report addresses the Office of Native American Programs’ (ONAP) initiatives to promote energy conservation, as well as housing built or rehabilitated through the HOME and Community Development Block 

Grant (CDBG) formula grant programs. 

3

•	 A	total	of	1,0662

 single-family Energy Efficient Mortgages were reported to have been insured by 

FHA, for an estimated savings of $390,000. 

•	 A	total	of	3,856	units	of	HOME-funded	new	construction	projects	were	reported	as	having	achieved	

the Energy Star label for new homes.3 This represents a 15 percent savings over standard new 

homes built to the 2004 International Residential Code, resulting in an estimated savings of $1.2 

million. 

•	 A	total	of	125	units	of	CDBG-funded	projects	were	reported	as	having	achieved	the	Energy	Star	

label for new homes, for an estimated combined savings of $36,875. 

•	 A	total	of	32	new	energy	performance	contracts	were	reported	in	public	housing	in	FY	2007.	They	

involved a combined capital investment of $141.3 million and an estimated annual savings of $32.2 

million. As of March 2008, a total of 183 contracts were completed or in repayment, for a total 

investment of $570 million and projected annual savings of $102.8 million. 

Selected Accomplishments 

•	 The	Office	of	Policy	Development	and	Research	sponsored	a	four-part	energy	training	series	for	

HUD employees, grantees, and partners, which drew more than 2,500 registrants. The training was 

provided via satellite broadcasts and webcasts. See www.hud.gov/energy/training/coursedesc.pdf. 

•	 The	Office	of	Affordable	Housing	Preservation	launched	a	new	green	building	initiative	for	

multifamily properties participating in the Mark to Market program. The initiative provides the first 

HUD incentive for green building (the owner’s matching contribution is reduced from 20 percent 

of the cost of rehabilitation to just 3 percent for green construction). See www.hud.gov/offices/hsg/ 

omhar. 

•	 The	Office	of	Community	Planning	and	Development	reported	for	the	first	time	on	Energy	Starqualified new homes funded through the HOME and CDBG programs. 

•	 The	Office	of	Public	and	Indian	Housing	strengthened	technical	support	to	public	housing	

authorities in developing energy performance contracts, developed a utility benchmarking tool 

that will assist housing authorities in managing their energy use, and expanded the Public Housing 

Environmental and Conservation Clearinghouse. 

•	 HUD’s	field	offices	continued	to	play	a	prominent	role	in	leveraging	resources	for	HUD	customers	

and partners and in conducting training and outreach in their regions. Regions 1, 4, 6, and 9 have 

been particularly active. In Region 9, for example, a partnership with Pacific Gas and Electric 

resulted in the installation of 21,000 compact fluorescent lights (CFLs) in some 200 public and 

assisted housing properties in Northern and Central California. Region 9 was also instrumental 

2 This is the actual number of such mortgages reported, slightly lower than the 1,118 reported in HUD’s 2007 Performance and Accountability Report (PAR), which included an estimated number of mortgages for the fourth quarter. 

3 The total of 3,856 units is adjusted from the figure reported in the FY 2007 Performance and Accountability Report, which included estimated figures for the fourth quarter. This total includes actual fourth-quarter production. 

4

in developing a bulk purchasing tool for Energy Star products and appliances. See www. 

quantityquotes.net. 

•	 The	Office	of	Multifamily	Housing	developed	a	package	of	reforms	to	boost	energy	efficiency	in	

privately owned HUD-assisted or HUD-insured multifamily housing. HUD expects to implement 

these reforms in FY 2009. 

•	 Feasibility	assessments	of	combined	heat	and	power	(cogeneration)	were	completed	in	20	

multifamily buildings in 6 states (Connecticut, Massachusetts, Pennsylvania, Wisconsin, Illinois, 

and California), showing paybacks ranging from 3 to 20 years. 

Congressional Actions Impacting HUD 

Congress has directed HUD to implement energy-efficient and green building practices through the 

following legislative actions: 

•	 Energy	Policy	Act	of	2005. HUD continues to implement key provisions of the Energy Policy 

Act of 2005, including: (1) requiring public housing authorities to buy Energy Star products and 

appliances, (2) encouraging energy efficiency in Indian housing, and (3) extending the length of 

energy performance contracts in public housing. 

•	 Energy	Independence	and	Security	Act	of	2007.	During the period covered by this report, Congress 

enacted the Energy Independence and Security Act of 2007, which requires HUD to establish 

energy standards that “meet or exceed” the 2006 International Energy Conservation Code for new 

construction in public, assisted, and insured housing. The Act also requires the Department of 

Energy to set new standards for HUD-Code manufactured homes, in consultation with HUD. 

•	 House	Appropriations	Committee	Report.	HUD’s FY 2008 House Appropriations Committee 

Report included language urging HUD to move beyond voluntary approaches toward establishing 

requirements for energy efficiency and green building. The FY 2008 Consolidated Appropriations 

Act included language requiring HUD to allow existing energy performance contracts in public 

housing to be extended to 20 years. 

•	 Joint	Explanatory	Statement	on	Housing	and	Transportation.	In light of rising gasoline prices, 

an increasingly important element of all green buildings is the location efficiency—in addition 

to the energy efficiency—of the property. In its Joint Explanatory Statement accompanying the 

FY 2008 Consolidated Appropriations Act, the House-Senate Conference tasked HUD and the 

Federal Transit Administration (FTA) to continue and expand its work in this area.4

 HUD and FTA 

have created an interagency Working Group and will submit a report on ways that HUD and FTA 

can better coordinate transportation and housing programs. 

4

 FY 2008 Consolidated Appropriations Act, Pub. L. 110-161, Joint Explanatory Statement. 

5 
B. Energy Costs and Affordable Housing


This section of the report discusses changes in energy use in the residential sector, their impact on 

low- to moderate-income households, and HUD’s best estimates of current utility expenditures 

through its various programs. 

Residential Energy Trends 

The housing sector consumes about one-fifth (21 percent) of all energy consumed annually in the 

United States. Of the 21.1 quadrillion BTUs (quads) used in the residential sector, less than one-third 

(6.5 quads) is “primary” energy that is consumed in the home.5 The remaining energy is used to 

produce electricity or is lost in transmission. As a result of these losses, while housing consumes only 

one-fifth of all energy used, it uses 37 percent of all electricity produced in the United States.6 

Residential energy consumption has increased four-fold over the past half century. Over that time, 

there have also been dramatic changes in the type of energy used. In 1950, one-third of all homes 

(34 percent) were heated with coal; today, the share is just 1 percent. Meanwhile, natural gas heating 

increased from just 11 percent of all housing units to more than one-half (52 percent) today. Heating 

oil use has declined from 22 percent of all homes in 1950 to 8 percent. In addition, whereas electric 

heat was almost nonexistent in 1950, today 31 percent of all homes are heated with electricity.7 This 

translates into 56 million households that heat with natural gas, 34 million with electricity, and 9 million with heating oil (primarily in the Northeast). 

Perhaps the biggest shift in residential energy use has been in the area of electricity, as a result of a 

significant increase in central air conditioning, population growth in the Southwest and Southeast, 

and the exponential increase in the use of home energy appliances and computers. Fifty-six percent of 

all homes now have personal computers, 65 percent have ceiling fans, 53 percent have dishwashers, 

and 86 percent have microwave ovens. More than one-half (55 percent) have central air conditioning, 

double the share (27 percent) in 1980.8 

Electricity remains by far the most expensive energy source, despite the dramatic recent increases in 

the price of heating oil and natural gas. The Energy Information Administration (EIA) indicates that 

the 2004 price for electricity was $26 per million BTUs, compared with just $14 for heating oil and 

less than $11 for natural gas.9 

5

 Energy Information Administration (EIA), Annual	Energy	Review, 2006, Figure 2.1a, p. 36.


6

 U.S. Department of Energy, 2005 Buildings	Energy	Data	Book. 


7

 EIA 2006, Op Cit, Figure 2.7, p. 54 and Table 2.7, p. 55. 


8

 Ibid, Figure 2.6, p. 52.


9

 Ibid, Figure 3.4.


6

Rising Energy Prices 

Combined with $4 a gallon gasoline, energy costs—for both housing and transportation—are a rapidly 

growing household expenditure. As recently as 1998, oil was selling for $13.11 per barrel, compared 

with more than $110 per barrel in August 2008. Natural gas prices for consumers have more than 

doubled over the same period.10 Electricity prices have on average increased by approximately 25 

percent, from 8 cents/kWh in 1998 to just over 10 cents/kWh in 2006. 

According to the EIA, from 2001 to 2007 the cost of home heating nearly or more than doubled in 

some parts of the country: in the Midwest, natural gas users spent 77 percent more in winter heating 

costs in 2006–07 than they did in 2001–02, while Northeast heating oil users spent 112 percent 

more.11 These costs have continued to rise, especially for home heating oil users in the Northeast. 

Similar cost increases have occurred for summer cooling costs. 

Impact on Low-Income Families 

Low- and moderate-income families who reside in HUD-assisted housing are especially vulnerable 

to rising energy prices. As noted in the President’s National Energy Policy, “the energy burden on 

low-income households, as a proportion of income, is four times greater than for other American 

households. Many working households accommodate large increases in energy by cutting back on 

other needs. However, low-income households often have more difficult choices to make.”12 

A recently completed survey by the National Energy Assistance Directors’ Association illustrated 

the impact that energy costs are having on low-income families.13 Sixty percent of low-income 

households, 49 percent of moderate-income households, and 42 percent of middle-income households 

report more difficulty in paying their energy bills than in the previous year.14 

High gasoline prices, in combination with high home heating and cooling costs, are compounding the 

problem. Almost three quarters of low-income families report that increased costs of gasoline are having a “large impact” on their households, with 70 percent saying that they were cutting back on food 

purchases, 31 percent cutting back on medicine, and 19 percent doing so on education. But despite 

making these adjustments, 29 percent of low-income families and 20 percent of moderate-income 

families said that they had missed a payment on, or paid less than, their full energy bill. 

10 Energy Information Administration, Natural	Gas	Prices	for	Households, from Energy Prices and Taxes, first quarter 2007. Price increased from $6.6/million BTUs in 1998 to $13.96 in 2006.


11 Energy Information Administration, Short	Term	Energy	Outlook, January 2008. Prices include taxes. Compared 


with a U.S average rise of 65 percent for natural gas and 114 percent for heating oil in the same time period.


12 President’s National Energy Policy, May 2001. 


13 National Energy Assistance Directors’ Association, 2008 Energy	Costs	Survey, June 6, 2008.


14 Low-income is defined as up to 150 percent of the federal poverty level, moderate income is 150 to 250 percent 


more than the poverty level, and middle income as 250 to 350 percent more than the poverty level. 

7 
Rising gasoline prices are especially impacting rural areas, where driving distances are longer and 

there are fewer public transportation options. While on average Americans spend about 4 percent of 

their take-home incomes on gasoline, the share of income spent on gasoline is as high as 15 percent in 

rural counties with median incomes of less than $20,000,15 compared with only 2 percent in suburban 

counties with median incomes of $70,000 or more. 

Another indicator of the impact on low-income families is the “Home Energy Affordability Gap”— 

the gap between what low-income households can afford and what they actually pay. The gap rose to 

$41 billion in 2007, an increase of 126 percent, or $23 billion, since 2002.16 On the other hand, fuel 

assistance for these families has risen only moderately; funding for the Low-Income Home Energy 

Assistance Program (LIHEAP), the primary federal assistance program, has increased by only $279 

million over the same period. 

HUD’s $5 Billion Energy Bill 

Rising energy prices are also adding to operating costs in public and assisted housing. As summarized 

in Table B-1, utility costs in public and assisted housing have risen to an estimated $5.01 billion, or 

an increase of 13.5 percent over the 2-year period since HUD submitted its 2006 report. The amount 

expended on Section 8 vouchers increased by almost 18 percent. 

PHA-paid utilities totaled $1.43 billion in 2006, up from $1.27 billion in 2004. Utility allowances for 

tenants in public housing increased to $421 million. (See Table B-1.) Another $3.16 billion was expended in the form of utility allowances through project- and tenant-based Section 8 rental assistance, 

for a total of just over $5 billion. 

Activity 2004–05 ($ in millions) 2006–07 ($ in millions) % Change 

16 

Table B-1. Combined Energy Expenditures in Public and Assisted Housing

 (Including Water and Sewer)

Public housing 

PHA-paid utilities 1,277 1,429 11.9 

Utility allowances 411 421 2.3 

Assisted housing 

Owner-paid utilities17 N/A N/A N/A 

Utility allowances 605 662 9.4 

Section 8 vouchers 

Utility allowances 2,122 2,500 17.8 

Total 4,415 5,012 13.5 

N/A = not available.


Source: See source notes for Tables B-2 and B-5


15 Rural	U.S	Takes	Worst	Hit	as	Gas	Tops	$4	Average, New York Times, June 9, 2008. Utilizes U.S. Census Bureau 

income and travel data. 

16 Fisher, Sheehan and Colton, On	the	Brink:	2007;	The	Home	Energy	Affordability	Gap, April 2008. The affordability level for home energy costs is set at 6 percent of gross household income for families with incomes at or below 

185 percent of the federal poverty level. Energy bills are estimated using the “energy intensities” published in the 

most recent DOE Residential Energy Consumption Survey (RECS). 

8

Public Housing 

Public housing consists of approximately 1.2 million units in 13,000 properties, managed by some 

3,100 public housing authorities. Utility expenditures are tracked and reported in the Financial 

Assessment Subsystem for Public Housing (FASS-PH). The most recent period for which HUD has 

complete data is Cycle 8 or 2006, covering housing authorities whose fiscal years ended between 

September 30, 2006, and June 30, 2007.17 

The overall cost of PHA-paid utilities in public housing (including water and sewer) for 2006 totaled 

$1.4 billion (Table B-2). This represents approximately 23 percent of total operating expenses. When 

combined with the most recent available estimate of tenant-paid utilities ($421 million; see Table B-4) 

total estimated energy-related utility expenditures in public housing are $1.85 billion. 

Utility expenditures in public housing show a significant increase over previous years. Most of the 

increase is due to higher energy prices. On a per-unit basis, the monthly expense (PUM) was $111.66, 

a 31.2 percent increase over 2000. 

Line Item 2001 2002 2003 2004 2005 2006 

Table B-2. PHA-Paid Utility Expenditures, 2001–06 (Including Water and Sewer Charges) 

Total utilities ($ in millions) $1,219 $1,158 $1,252 $1,277 $1,411 $1,429 

Total operating expenses ($ in millions) $5,657 $5,754 $5,891 $5,885 $6,043 $6,161 

Utilities as % of operating expenses 22 20 21 22 23 23 

Total PUM utilities $87.82 $84.09 $93.02 $97.78 $109.31 $111.66 

% change in PUM over previous year 3.2 – 4.3 10.6 5.1 11.8 2.2 

% change in PUM since 2000 3.2 – 1.2 9.3 14.9 28.5 31.2 

Sources: 2000–2006 Financial Assessment Subsystem (FASS-PH) financial data; the following line items were used in totaling the data for utilities: water, electricity, 

gas, fuel, and other utility expenses (“other” includes sewer and miscellaneous utility costs) 

Table B-3 shows total PHA-paid utility costs for electricity, gas, and fuel oil (excluding water and 

sewer charges) in 2006. These costs increased by 15.2 percent since 2004, to $1.01 billion—of which 

$462 million was for electricity, $353 million for natural gas, and $196 million for fuel oil. Per-unit 

month (PUM) energy expenditures increased by 17.4 percent, with fuel oil increasing by almost 22 percent. 

Table B-3. PHA-Paid Energy Expenditures, 2004–06 (Electricity, Gas, and Fuel) 

2004 2006 

Line Item 

($ in millions) 

PUM 

($ in millions) ($ in millions) 

% PUM 

($ in millions) 

% PUM 

1,012 15.2 79.04 17.4 

462 14.8 36.11 17.2 

353 13.3 27.59 15.7 

196 19.1 15.34 21.7 

Total 

Expenditure 

Total 

Expenditure Expenditure 

Increase Increase 

Total PHA-paid utilities 

Electricity 

Natural gas 

Fuel oil 

878.8 67.28 

402.5 30.82 

311.5 23.85 

164.8 12.61 

Source: FASS-PH financial data for Cycle 6 (2004) and Cycle 8 (2006) 

17 Housing authorities submit unaudited financial statements, including utility expenditures, within 60 days of the 

end of their fiscal year; audited financial statements are submitted 9 months after the end of their fiscal year. The 

2006 (Cycle 8) period covers PHAs with fiscal years ending 9/30/06, 12/31/06, 3/31/07, or 6/30/07. Utility expenses 

reflect expenses incurred 12 months prior to the year end report. Similarly, 2005 (Cycle 7) data covers PHAs whose 

fiscal years ended 9/30/05 through 6/30/06. 

9

Assisted Housing 

HUD’s assisted and insured housing stock consists of approximately 2.3 million units in 31,316 properties, of which 22,674 properties receive project-based Section 8 and other types of rental assistance. 

HUD’s rental assistance pays for a share of owner-paid, master-metered utilities (in addition to utility 

allowances for individually metered utilities). 

Table B-4. Estimated Owner-Paid Utilities in Assisted Multifamily Housing, 2004–06 

2004 2004 2006 2006 

Line Item ($ in millions) 

Per 

($ in millions) 

Per % Change 

$1,062.8 $757 13.3 

$570.8 $407 8.2 

$416.0 $379 21.2 

$76.0 $521 14.5 

$3,558.0 — 4.6 

29.9% — — 

Total Utilities 

Unit/Year 

Total Utilities 

Unit/Year 

Total owner-paid utilities 

Electricity 

Natural gas 

Fuel oil 

Total operating expenses 

Energy share 

$937.2 $668 

$527.6 N/A 

$343.2 N/A 

$66.4 N/A 

$3,398.7 — 

27.6% — 

Source: Financial Assistance Subsystem (FASS-MF) as of December, 2007.18 

According to data compiled from HUD’s Online Property Integrated Information Suite (OPIIS), 

average owner-paid utilities (central heating and cooling, common-area lighting) in HUD’s 22,674 

assisted multifamily properties were reported at $1.06 billion in 2006, for an average of $757 per unit. 

(See Table B-4.) This represents a 13.3 percent increase since 2004, when owner-paid energy costs 

averaged $668 per unit. Utility costs accounted for almost 30 percent of total operating expenses. 

When added to the $662 million paid for individually metered utilities with utility allowances (see 

Table B-5), the total estimated cost of utilities in HUD-assisted housing was estimated to be more 

than $1.7 billion. Note again that these costs are not normalized for weather or energy prices, and they 

predate the more recent 2007–08 increases in energy prices. 

Utility Allowances 

HUD’s expenditures on allowances for tenant-paid utilities have increased by 14 percent in the 2-year 

period covered by this report, to almost $3.6 billion19—while the total number of voucher holders remained relatively constant (Table B-5). Utility allowance expenditures include $421 million in public 

housing, $2.5 billion for tenant-based Section 8 vouchers, and $662 million in project-based Section 8 

assistance in assisted multifamily housing. The average annualized tenant-based utility allowance was 

$1,467 in 2007. 

18 The following methodology was used to estimate the amount expended by HUD through Section 8 contracts in 

HUD-assisted multifamily units. 15,210 assisted properties (out of the total of 22,674 assisted properties) reported 

paying $799,748,980 in owner-paid utilities. The “total electric count” of 1,056,033 units in these properties was 

used to arrive at an average $757 per unit in owner-paid utilities. This average was applied to the total of 1,403,484 

occupied assisted units as of July 2008, for total owner-paid utilities in all HUD-assisted units of $1,062,878. 

19 For comparative 2005 figures, see Table 2, Utility Allowance Expenditures, p.11, HUD’s August 2006 Report to 

Congress. 

10

Table B-5. Utility Allowance Expenditures, 2007 

Subsidized 

Housing Units 

Occupied 

Units 

% Units With 

Utility 

Allowances 

# Units With 

Utility 

Allowances 

Allowance 

($) 

Annual Spent 

($ in millions) 

Avg Utility 

Public housing 1,194,747 1,092,059 42 458,854 $917 $421 

Section 8 vouchers 2,204,426 2,034,298 84 1,704,725 $1,467 $2,500 

Project-based Section 8 1,625,210 1,563,637 57 890,786 $802 $663 

Total 5,024,383 4,689,994 65 3,054,365 $1,173 $3,584 

% change since 2005 4.63 9.38 6.56 0.49 14 14 

Sources: Office of Policy Development and Research, December 2007 data from Tenant Rental Assistance System; Real Estate Management System; Public 

Housing Information Center—Resident Characteristics Report, HUD-50058 and HUD-50059; Occupied/Leased Section 8 Moderate, New, and Substantial 

Rehabilitation, Section 236, and Other assume a 96-percent occupancy rate. 

11

C. HUD’s Energy Strategy


A Departmentwide Energy Task Force was tasked in 2002 to respond to the challenge of rising 

energy costs to residents and owners of HUD-assisted properties. The Task Force identified a series of 

actions that HUD could undertake to address the need for energy conservation and energy efficiency 

in HUD’s own programs. Some of these proposed actions were specific to individual programs, 

while others were Departmentwide or interagency in scope (in partnership with the Environmental 

Protection Agency and the Department of Energy). 

In August 2006, as directed by Congress pursuant to Section 154 of the Energy Policy Act of 2005, 

HUD submitted an expanded, 25-point energy strategy for HUD’s inventory of public and assisted 

housing, Promoting	Energy	Efficiency	at	HUD	at	a	Time	of	Change. The Act requires HUD to provide 

Congress with a 2-year update on progress made in implementing these measures. (See the table on 

the following page for a list of the 25 items.) 

The energy strategy addresses the following topics: 

•	 Implement	interagency	partnerships	with	DOE	and	EPA. HUD’s Energy Action Plan includes 

partnerships with EPA and DOE in two key areas: increased voluntary use of Energy Star products 

and weatherization assistance for low-income families. 

•	 Provide	information,	training,	and	technical	assistance	to	HUD	customers	and	clients. In the 

absence of new programs or funding commitments for energy efficiency, a key objective of the 

Action Plan has been to provide better information and training to HUD’s customers and clients, 

and to do so in a cost-effective and coordinated way. 

•	 Strengthen	rewards	and	incentives	for	energy	efficiency. Although requirements vary from program 

to program, in general HUD’s incentives for encouraging energy efficiency are relatively modest. 

The Action Plan provides for stronger rewards and incentives for HUD’s customers and clients to 

reduce energy costs in their buildings. 

•	 Strengthen	energy	standards	and	program	requirements.	Where it can be accomplished costeffectively, the Action Plan included several measures to strengthen HUD’s current energy 

efficiency standards and improve compliance with program regulations. 

•	 Strengthen	the	management	and	monitoring	of	HUD’s	energy	programs. Better coordination, 

organization, and staffing of HUD’s energy programs, both at headquarters and in the field, are key 

elements of the Action Plan. A number of activities have been implemented or are under way to 

enable HUD to track energy efficiency trends over time. 

•	 Support	policy	analysis	and	technology	research.	While significant gains can be accomplished 

working within existing programs and using existing technologies, there may be a need for 

additional policy analysis and limited research and development of new energy efficiency 

technologies. 

12

HUD’s Energy Strategy—Planned Actions 

Departmentwide 

1 

2 

3 

4 

housing. 

5 

Community Planning and Development 

6 

7 Identify opportunities and assist with feasibility analysis for Combined Heat and Power in public or assisted housing. 

Public and Indian Housing 

8 

9 

10 

11 

12 

Housing—Single Family 

13 

14 

15 

Housing—Multifamily 

16 

17 Continue HUD-DOE multifamily weatherization partnerships. 

18 

19 

20 

21 

22 

Field Policy and Management 

23 

24 

25 

Provide incentives for energy efficiency in housing financed through HUD’s competitive grant programs. 

Include energy efficiency performance measures in HUD’s Annual Performance Plan (APP) and Management Plan. 

Promote the use of Energy Star products and standards through HUD’s new Partnership for Home Energy and Efficiency 

with DOE and EPA. 

Provide residents or organizations with training or information on energy efficiency for building or rehabilitating affordable 

Establish residential energy partnerships with cities, counties, states, and other local partners. 

Encourage energy efficiency in HOME- and CDBG-funded new construction and housing rehabilitation projects. 

Base appliance and product purchases in public housing on Energy Star standards, unless the purchases are not cost 

effective. 

Build HOPE VI developments to a high level of energy efficiency. 

Improve tracking and monitoring of energy efficiency in public housing. 

Streamline energy performance contracting in public housing. 

Promote energy conservation in federally assisted housing on Indian tribal lands. 

Feature the Energy Efficient Mortgage as a priority loan product. 

Provide training on how FHA single-family programs can be effectively used to promote energy efficiency. 

Continue improved tracking, and evaluate performance, of Energy Efficient Mortgages. 

Promote energy efficiency in multifamily-assisted housing and multifamily programs. 

Encourage use of Energy Star new home standards in the design, construction, and refinancing of Section 202 and 

811 projects. 

Develop incentives for energy efficiency through FHA multifamily insurance programs. 

Explore asset management strategies and guidance for energy efficiency in HUD-subsidized multifamily properties. 

Support energy efficiency training for multifamily managers and maintenance staff. 

Housing—Manufactured Homes 

Implement energy efficiency recommendations of the Consensus Committee for HUD-Code (Manufactured) Homes. 

Partner with local energy efficiency groups, HUD program offices, and other agencies to educate HUD customers about 

ways to reduce energy costs. 

Policy Development and Research 

Conduct energy-related policy analysis and research to support Departmental energy efficiency actions. 

Healthy Homes and Lead Hazard Control 

Develop a computerized assessment tool for integrated energy and environmental retrofits. 

13 
D. Progress to Date


I. DepartmentwiDe 

Five Departmentwide actions are included in HUD’s energy strategy. 

Action Departmentwide 

1 Provide incentives for energy efficiency in housing financed through HUD’s competitive grant programs. 

2 Include energy efficiency performance measures in HUD’s Annual Performance Plan (APP) and Management Plan. 

3 Promote the use of Energy Star products and standards through HUD’s new Partnership for Home Energy and 

Efficiency with DOE and EPA. 

4 Provide residents or organizations with training or information on energy efficiency for building or rehabilitating affordable housing. 

5 Establish residential energy partnerships with cities, counties, states, and other local partners. 

[ACTION 1] 

PROVIDE INCENTIVES FOR ENERGY EFFICIENCY IN HOUSING 

FINANCED THROUGH HUD’S COMPETITIVE GRANT PROGRAMS. 

Planned Actions 

1.1	 Continue energy efficiency as a policy priority in HUD’s 2007 and 2008 competitive 

grant awards. Individual competitive grant programs will continue to award rating points 

for proposals that adopt energy-efficient products and practices in planned housing 

projects. 

1.2	 HUD’s Energy Task Force will explore with program offices the feasibility of 


identifying suggested energy measures in awarding competitive points for energy 


efficiency activities, to assist applicants in addressing energy efficiency. 


1.3	 The Energy Task Force will review its experience with the previous year’s incentives. 

1.4	 The Office of Community Planning and Development’s Notice of Funding Availability 

(NOFA) for its technical assistance programs may address energy efficiency technical 

assistance activities supportive of HUD’s HOME program. 

Progress To Date 

Each year, HUD awards approximately $2.7 billion in competitive grant awards for a wide range of 

housing and community development initiatives. These funds are awarded through the Department’s 

annual Super Notice of Funding Availability (SuperNOFA), as well as a separate Notice for the 

HOPE VI program. 

14

For the past 4 years, HUD has established energy efficiency as a policy priority in its annual competitive grant awards. As a policy priority, program offices may award additional points for energy efficiency in rating grant applications. Programs providing at least one point for energy efficiency in 2007 

or 2008 included Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing 

for Persons with Disabilities, HOPE VI, Rural Housing and Economic Development, Housing 

Opportunities for People with AIDS (HOPWA), Indian Community Development Block Grants, 

Housing Counseling, and University Partnerships. Several healthy homes initiatives also provided a 

point incentive: the Healthy Homes Demonstration, Lead-Based Paint Hazard Control, and the Lead 

Hazard Reduction Demonstration programs. 

One program, the Self Help Ownership Opportunity Program (SHOP), established Energy Star as a 

minimum requirement, as follows: “All newly constructed units assisted with SHOP funds provided 

must qualify and receive Energy Star certification by an independent Home Energy Rater upon 

completion, and only Energy Star-labeled products and appliances may be used in these units.” 

The McKinney Act/Continuum of Care grant awards, which address homelessness, do not provide 

additional points for energy efficiency. Rather, applicants are required to fill out a checklist as part of 

their application (Action 1.1). 

The Notices of Funding Availability in 2007 and 2008 for HOME Technical Assistance did not 

specifically include energy efficiency. However, as described under Action 6 below, several steps are 

under way to incorporate energy efficiency in the HOME training program—specifically, the development of a HOME Energy Star training curriculum, as well as a Guidebook on Energy Star and green 

building (Action 1.4). 

As noted in the 2007 SuperNOFA, the Department is considering a regulation that would establish the 

standard for Energy Star-qualified new homes as the minimum standard for HUD’s competitive grant 

programs (Action 1.3). 

[ACTION 2]


INCLUDE ENERGY EFFICIENCY PERFORMANCE MEASURES IN HUD’S 

ANNUAL PERFORMANCE PLAN (APP) AND MANAGEMENT PLAN. 

Planned Action 

2.1	 Performance measures that set energy reduction outcomes or goals and gauge 


improvements in energy efficiency will be considered for inclusion in HUD’s future 


Annual Performance Plans (APPs) and, where feasible, in future Management Plans. 


15

Progress To Date 

Under the Government Performance and Results Act (GPRA), HUD is required to establish annual 

performance goals through its Annual Performance Plan and to prepare a Management Plan that 

sets specific targets for each goal. The Management Plan is the operational plan for the Department. 

HUD’s Annual Performance and Management Plans provide the template for institutionalizing key 

departmental objectives. The documents can be found at www.hud.gov. 

HUD’s FY 2008 Annual Performance Plan includes Objective B.1.9: Implement Phase II of HUD’s 

plan for increasing the energy performance and reducing utility costs in HUD-supported housing. 

In support of this objective, the Department’s Management Plan for 2008 includes several energyrelated performance goals. 

Mgt Plan Performance Goals FY 2008 Program Lead Reference Target 

Table D-1. Energy Performance Measures in HUD’s 2008 Management Plan 

Policy Development and B.1.09.am1 Implement Phase II of HUD’s plan for increasing the energy 

Research performance and reducing utility costs in HUD-supported housing. 

Public Housing B.1.09.am2 Reduce utility consumption by PHAs and residents by increasing 5% 

the overall investment in energy conservation measures (ECMs) 

by 5 percent over the FY 2007 baseline, and by ensuring that all 

ECM investments are cost effective during the expected life of the 

equipment. 

Single-Family Housing B.1.09.m3 Feature the Energy Efficient Mortgage and other FHA products that 

promote energy efficiency improvements in single-family housing. 

Single-Family Housing B.1.09.m4 Provide training on how Federal Housing Administration (FHA) 36 

single-family programs can be effectively used to promote energy 

efficiency. 

Single-Family Housing B.1.09.m5 Continue improved tracking and evaluate performance of EEMs. 

Single-Family Housing B.1.09.m5.1 Promote energy efficiency by encouraging housing providers to use 

energy-saving devices. 

Community Planning and B.1.09.m6 To implement the Secretary’s Energy Task Force Initiative and the 10% 

Development Energy Star Memorandum of Understanding (MOU) among HUD, 

Department of Energy (DOE), and Environmental Protection Agency 

(EPA), HUD will increase the number of Energy Star certifications 

in new construction and gut rehab in the Community Development 

Block Grant (CDBG) and HOME programs. 

Manufactured Housing B.1.09.m7 Continue to process Manufactured Housing Consensus Committee 

proposals that are not in rulemaking (including appliance efficiency 

and improved duct insulation). 

Field Policy and Management B.1.10.m Increase and preserve decent affordable housing through promotion TBD 

of HUD’s departmental initiatives (that is, Energy Action Plan, 

America’s Affordable Communities Initiative, and Preserve America). 

16

[ACTION 3]


PROMOTE THE USE OF ENERGY STAR PRODUCTS AND STANDARDS 

THROUGH HUD’S NEW PARTNERSHIP FOR HOME ENERGY EFFICIENCY 

WITH DOE AND EPA. 

This action focuses on ensuring that HUD staff and partners have access to information about Energy 

Star-qualified products and new homes. In July 2005, HUD, the Department of Energy, and the 

Environmental Protection Agency announced a new partnership to reduce energy costs in existing 

homes by 10 percent by the year 2015. 

Planned Action 

3.1	 Work with DOE and EPA to ensure that information on Energy Star products and 


appliances, Energy Star-qualified new homes, and “Home Performance with Energy 


Star” (for existing homes) is available for distribution to field staff, public housing 


agencies, formula and competitive grant recipients, property managers, and, where 


feasible, new FHA homebuyers.

Progress To Date 

When information is needed on Energy Star products and appliances, as well as on Energy Starqualified new homes, such information is available from the EPA-operated Energy Star information 

clearinghouse. HUD-specific information on Energy Star is currently not available for distribution to 

field staff and others, due to funding and staffing limitations. 

During 2006 and 2007, HUD’s Region 9 office played an important role in working with the 

Department of Energy to develop Energy Star Quantity Quotes at www.quantityquotes.net, a bulk 

purchasing tool for Energy Star products. As of May 2008, Quantity Quotes had been used by 1,200 

purchasers, representing schools, apartment building owners and managers, public housing authorities, other government agencies, manufacturers, and others. Purchasers have submitted over 500 

requests for 4.3 million compact fluorescent lights (CFLs), 31,000 room air conditioners, 10,000 light 

fixtures, 10,000 refrigerators, 2,300 clothes washers, 2,500 dishwashers, and 80 dehumidifiers. 

Another important area of cooperation with Energy Star has been the annual Energy Star Change a 

Light, Change the World Campaign, which focuses on enlisting pledges from consumers and property 

owners to replace incandescent light bulbs with more energy-efficient CFLs. One example: HUD’s 

participation resulted in the replacement of 21,000 light bulbs, in partnership with Pacific Gas and 

Electric, in 168 properties in Northern California with 9,800 units. EPA estimates that this will save 

11.7 million kilowatt-hours of electricity. 

17 
[ACTION 4]


PROVIDE RESIDENTS OR ORGANIZATIONS WITH TRAINING OR 

INFORMATION ON ENERGY EFFICIENCY FOR BUILDING OR 

REHABILITATING AFFORDABLE HOUSING. 

This action focuses on increasing the technical knowledge and capacity of property managers and others in adopting energy efficiency, emphasizing no-cost/low-cost energy management strategies. 

Planned Action 

4.1	 Develop standard training program modules to promote energy efficiency in future 

developments and existing HUD-assisted and HUD-financed housing. The training 

program and plan will be developed in conjunction with national intermediaries, 

including the Local Initiatives Support Corporation (LISC), Habitat for Humanity, the 

Enterprise Foundation, and the Neighborhood Reinvestment Corporation. 

Progress To Date 

A successful four-part, online training program, Save	Energy,	Lower	Costs,	Increase	Comfort	and	

Quality	of	Affordable	Housing, sponsored by HUD’s Office of Policy Development and Research was 

implemented in 2007. More than 2,500 people registered for one or more of the training workshops. 

The training provided an introduction to energy efficiency, as well as new and emerging practices, for 

operators, managers, and developers of affordable housing projects, both single-family and multifamily. 

Information and technical guidance was presented by a faculty of nationally recognized experts in 

building science with practical experience and demonstrated success in reducing energy costs through 

better design and building practices. “HUD Energy Champion” certificates were issued to individuals 

completing all four sessions. Four topics were covered: 

•	 Multifamily	Building	Operations	and	Management:	The	First	Step	To	Energy	Efficiency.

•	 Retrofit	and	Remodeling	Strategies	for	Multifamily	Buildings.	

•	 Single-family	Rehab	and	Retrofits:	Focus	on	Low-Rise	Buildings.

•	 Energy	Star-Qualified	New	Homes,	Green	Building	and	Renewable	Energy.	

Each of these training sessions is currently available on HUD’s webcast archives.20 The information 

has not yet been compiled into standardized training modules as proposed in HUD’s 2006 report, 

however, due to funding limitations. Discussions with national intermediaries will take place in 2008 

and 2009 to explore the feasibility of standard training programs. 

20 See www.hud.gov/webcasts/archives/envirhealth.cfm. 

18 
In addition to this Departmentwide training, more specialized training has been offered at a variety 

of venues. Beginning in October 2007, training workshops for public housing authorities on energy 

performance contracting have been offered in Atlanta, San Francisco, Little Rock, Honolulu, New 

York City, Jacksonville, Denver, and Boston. The Office of Native American Programs (ONAP) 

has also sponsored a series of 2-day training workshops on Creating	Energy	Efficient,	Comfortable	

and	Healthy	Tribal	Homes in the following locations: Santa Fe, Denver, Seattle, Portsmouth (New 

Hampshire), and Anchorage. A national conference was held in June 2008 in Reno, Nevada. 

Finally, the HOME program prepared an energy training guide for Participating Jurisdictions (PJs) 

and Community Housing Development Organizations (CHDOs), Building	Energy	Star	Qualified	

Homes	and	Incorporating	Energy	Efficiency	and	Green	Building	in	HOME-Funded	Affordable	

Housing. The training was first delivered in Omaha, Nebraska on April 1. 

[ACTION 5]


ESTABLISH RESIDENTIAL ENERGY PARTNERSHIPS WITH CITIES, 

COUNTIES, STATES, AND OTHER LOCAL PARTNERS. 

Planned Actions 

5.1	 Identify opportunities to implement energy partnerships with local communities (cities, 

counties, states, and/or private sector or nonprofit partners) as part of the HUD-DOEEPA Partnership for Home Energy Efficiency. 

5.2	 Work with federal and state agencies to develop regional strategies for providing 

technical and program resources and services to external partners, and to promote more 

use of Energy Star-labeled products and construction practices. 

5.3	 Develop partnerships with program office customers and partners, with the Office of 

Field Policy and Management playing a facilitating role. 

Progress To Date: See Action 23. 

19 
ii. Community planning anD Development 

The two primary programs administered by HUD’s Office of Community Planning and Development 

are the HOME Investment Partnerships (HOME) and Community Development Block Grant (CDBG) 

formula grant programs, and these are addressed here. Some $1.7 billion in HOME funds are used for 

new construction and rehabilitation of existing housing, while $4 billion in CDBG funds are used for 

a variety of purposes, including home repair and rehabilitation. CPD’s competitive grant programs, 

such as the McKinney Act homeless assistance program and the Rural Housing and Economic 

Development program, address energy through the SuperNOFA grant process and are addressed under 

Action 1. 

Action Community Planning and Development 

6 Encourage energy efficiency in HOME- and CDBG-funded new construction and housing rehabilitation projects. 

7 Identify opportunities and assist with feasibility analysis for Combined Heat and Power in public or assisted housing. 

[ACTION 6]


ENCOURAGE ENERGY EFFICIENCY IN HOME- AND CDBG-FUNDED NEW 

CONSTRUCTION AND HOUSING REHABILITATION PROJECTS. 

Planned Actions 

6.1	 Beginning in FY 2007, track the number of units built with HOME and CDBG funds 

to Energy Star standards through the Integrated Disbursement and Information System 

(IDIS). 

6.2	 Hold workshop sessions that present an “Energy Star for Grantees” presentation21 and 

tap Energy Star experts and grantees who have adopted Energy Star for New Homes 

(or its equivalent for multifamily buildings) as the guideline for construction or major 

rehabilitation. 

Progress To Date 

HUD encourages voluntary adoption of Energy Star-qualified new homes as the standard for 

CDBG and HOME new construction and gut rehabilitation. HUD has implemented a new reporting 

requirement for CDBG and HOME grant recipients that requires them to report units that meet the 

standard for Energy Star-qualified new homes. The first results were reported through the Integrated 

Disbursement and Information System (IDIS) in 2007. The new reporting requirement provides extremely valuable information on the extent to which CDBG and HOME funds are supporting energyefficient construction. At the same time, HUD is working to ensure that the data reported is accurate 

and reliable (Action 6.1). 

21 See www.hud.gov/offices/cpd/library/energy/energystargrantees.ppt. 

20 
CPD field offices reported holding 83 events promoting Energy Star-qualified new homes in 2007. 

These included workshops with program participants, presentations of the PowerPoint presentation 

“Energy Star for Grantees” that explains Energy Star for New Homes and what steps grantees should 

follow to adopt the Energy Star standard for HOME and CDBG programs (Action 6.2). 

The HOME program also prepared an energy training guide, Building	Energy	Star	Qualified	Homes	

and	Incorporating	Energy	Efficiency	and	Green	Building	in	HOME-Funded	Affordable	Housing. The 

new curriculum was delivered for the first time in Omaha, Nebraska, in April 2008. In addition, in 

May 2008, the HOME program issued a new Notice of Funds Availability providing a competitive 

reallocation of $1.5 million for Energy	Efficient	and	Environmentally	Friendly	Housing	for	LowIncome	Families.22 The grant announcement provided points for energy-efficient, green building, and 

renewable energy technologies. 

Results 

By the end of 2007, 3,856 new HOME-funded homes were reported to HUD as meeting the Energy 

Star standard—approximately 17 percent of all new HOME-funded units that year. The goal for 2008 

is to increase that number by 10 percent, focusing on states that reported few or no certifications in 

2007. As of the third quarter of 2008, the total reported for HOME was 4,634 units, or 20 percent 

above the 2007 level. Also as of the third quarter, CDBG reports 250 new homes certified for Energy 

Star construction, twice the total for 2007. 

While CPD is now receiving information on the number of units that are being built to the Energy Star 

standard, it is not known how many CDBG or HOME grantees have adopted Energy Star as an overall 

standard for new construction, gut rehabilitation, or product or appliance purchases. However, an 

increasing number of municipalities are moving in that direction. For example, in February 2008 the 

City Council of Kansas City, Kansas, adopted a resolution requiring that all new and gut rehabilitation 

buildings with up to three stories shall be designed to meet the standard for Energy Star-qualified new 

homes. 

[ACTION 7]


IDENTIFY OPPORTUNITIES AND ASSIST WITH FEASIBILITY ANALYSIS 

FOR COMBINED HEAT AND POWER IN PUBLIC OR ASSISTED HOUSING. 

HUD’s energy strategy includes an initiative to promote the installation of combined heat and power 

(CHP) systems in existing multifamily buildings. Combined heat and power, also known as cogeneration, generates some or all of the electricity needed by a building, with the heat that would otherwise 

be wasted used to provide heating and/or cooling for the property.23 The primary market for these 

systems is likely to come from almost 7,300 assisted multifamily and public housing projects with 

22 Federal	Register, May 16, 2008, p. 28664.


23 For an overview of this initiative, see webcast at www.hud.gov/webcasts/archives/envirhealth.cfm.


21

100 or more units.24 In 2004, for example, a 301-unit senior housing project in Massachusetts installed 

a 75 kilowatt system that provides 42 percent of the electricity and 33 percent of the space heating 

and domestic hot water used at the site. The cost of installation was approximately $175,000, for a 

payback of 5.7 years. 

Planned Actions 

7.1	 Extend HUD’s Interagency Agreement on Combined Heat and Power with Oak Ridge 

National Laboratory. 

7.2	 Continue to work with DOE and EPA to support the use of Combined Heat and Power 

in public and assisted multifamily housing. 

Progress To Date 

To introduce building owners to the value of combined heat and power, HUD and the Department of 

Energy (Oak Ridge National Laboratories) developed two guidebooks25 as well as preliminary screening software that could be used by property managers to assess the potential for this technology in 

their buildings.26 HUD programs have begun to incorporate material on this technology.27 

In 2007, the Oak Ridge National Laboratory expanded the scope of the feasibility screening software 

to include space heating and cooling. Also in 2007, HUD completed feasibility assessments in 20 

HUD-assisted multifamily buildings. The software provides a preliminary calculation of the potential 

return on investment for installing CHP in a multifamily building. The software is posted on the Oak 

Ridge and HUD websites, along with a revised guide, Feasibility	Screening	for	Multifamily	Housing. 

A sample screen is reprinted on the next page. 

Several of the Department of Energy’s Regional Application Centers assisted in identifying properties 

utilizing the feasibility analysis. One of these, the Midwest Regional Application Center, is following 

up with a more intensive (Phase II) analysis for an apartment building in Chicago. 

24 These are 1,790 public housing properties and 5,490 active multifamily properties. 

25 See Guide #1: Q	and	A	on	Combined	Heat	and	Power	for	Multifamily	Housing,	Guide	#2:	Feasibility	Screening	

for	Combined	Heat	and	Power	in	Multifamily	Housing at www.hud.gov/offices/cpd/library/energy/index.cfm. 


26 See http://eber.ed.ornl.gov/HUD_CHP_Guide_version_2.1. 


27 Combined heat and power has been included in the update of the HOME Energy Guide, Building	Energy	Star	

Qualified	Homes	and	Incorporating	Energy	Efficiency, in the Mark to Market Green Initiative and in Public Housing 


Notice 2008-25. 


22

28 A summary of these efforts can be found in the proceedings of the ACEEE 2008 Summer Study on Energy 

Efficiency in Buildings. See Groberg, Robert, J., Michael Macdonald, and Patti Garland, 2008. “Promoting 

Combined Heat and Power (CHP) for Multifamily Properties,” in Proceedings of the ACEEE 2008 Summer Study on 

Energy Efficiency in Buildings, 2.106-17. Washington, D.C.: American Council for an Energy-Efficient Economy. 

23


28 
iii. publiC anD inDian Housing 

HUD provides operating subsidies and capital grants for approximately 13,000 public housing properties, with 1.2 million units. Of the $6.1 billion in operating subsidies provided in 2006, approximately 

$1.43 billion was spent on PHA-paid utilities. Five actions are included in HUD’s energy strategy for 

public housing. 

Action Public and Indian Housing 

8 Base appliance and product purchases in public housing on Energy Star standards, unless the purchases are not cost 

effective. 

9 Build HOPE VI developments to a high level of energy efficiency. 

10 Improve tracking and monitoring of energy efficiency in public housing. 

11 Streamline energy performance contracting in public housing. 

12 Promote energy conservation in federally assisted housing on Indian tribal lands. 

The policy and regulatory environment for energy efficiency in public housing continues to evolve, as 

HUD shifts to asset management in public housing and addresses several new statutory requirements 

established by Congress. 

Changes in the Public Housing Regulatory Environment: 

•	 The	transition	to	asset	management. Begun in 2005, HUD continues to implement the new asset 

management model for public housing.29 The shift to asset management includes a requirement that 

housing authorities report utility consumption (in addition to expenditure) for individual properties, 

rather than on an agencywide basis. This provides an opportunity to track increases or decreases 

in energy consumption and to enable housing authorities to assess their energy use against HUD’s 

benchmarking model. 

•	 Growing	interest	in	green	building. HUD has responded to the growing interest in green building 

with Notice 2008-25. This Notice encourages public housing authorities to use solar, wind and 

other renewable energy sources, and other green construction and rehabilitation techniques when 

they buy appliances or renovate or build new housing. The Notice, Renewable	Energy	and	Green	

Construction	Practices	in	Public	Housing, was issued in June 2008. 

29 Asset management is described in Revisions to the Public Housing Operating Program: Final Rule, published 

September 19, 2005, in the Federal	Register (79 FR 54983). The rule implemented recommendations of the Harvard 

University Graduate School of Design that public housing adopt a business model similar to multifamily housing, 

with project-based budgeting, project-based accounting, and project-based management. This business model 

became known as “asset management.” 

24

Congressional Actions Impacting Public Housing: 

•	 Implementing	key	provisions	of	energy	legislation. HUD is preparing for publication revised 

regulations at 24 CFR 965 and 24 CFR 990.185 that will implement several provisions of the 

Energy Policy Act of 2005 related to public housing. These provisions include extending the term 

of energy performance contracts from 12 to 20 years and requiring public housing authorities to buy 

Energy Star appliances whenever it is cost effective. The updated regulation will also reflect muchneeded energy audit and utility metering guidance. HUD will also publish guidance for field offices 

and public housing authorities on procedures for implementing energy performance contracts with 

terms that exceed the current 12-year limit. 

•	 Higher	energy	standards	for	HOPE	VI	and	new	construction	in	public	housing. The Energy Policy 

Act set the 2003 International Energy Conservation Code (IECC) as the minimum standard for 

HOPE VI new construction and rehabilitation. The more recent Energy Independence and Security 

Act of 2007 requires HUD to raise the standard for new construction in public housing (including 

HOPE VI) to the 2006 IECC. 

[ACTION 8]


BASE APPLIANCE AND PRODUCT PURCHASES IN PUBLIC HOUSING ON 

ENERGY STAR STANDARDS, UNLESS THE PURCHASES ARE NOT COST 

EFFECTIVE. 

Planned Actions 

8.1	 Publish a regulation to implement the provision of the 2005 Act establishing Energy Star 

as the standard for PHA procurements, unless not cost-effective. 

8.2	 Field offices will host events promoting Energy Star and other energy efficiency 


opportunities.


8.3	 Continue to provide information to public housing authorities through the Public 


Housing Energy Conservation Clearinghouse.


8.4	 Contract for an analysis of the impact of Energy Star on public housing authorities. 

Progress to Date 

The Energy Policy Act of 2005 required public housing authorities to adopt Energy Star (or FEMPdesignated products)30 as the standard for procuring products and appliances, unless not cost-effective. 

Products purchased by housing authorities likely to be impacted by this provision include lighting, refrigerators, clothes washers, windows, furnaces, and other products receiving the Energy Star label.31 

30 FEMP—Federal Energy Management Program.


31 For a full list of Energy Star-labeled products and appliances, see www.energystar.gov.


25

Pursuant to the Energy Policy Act, HUD reissued Notice PIH 2007-30. The notice encourages using 

Energy	Star	to	promote	Energy	Efficiency	in	Public	Housing	as the standard for public housing, 

as follows: “PHAs should purchase Energy Star equipment such as appliances when economically 

feasible,” and “PHAs should purchase Energy Star-labeled products such as windows and ensure that 

any new buildings are constructed according to Energy Star standards, unless the PHA performs an 

economic analysis that finds the incremental cost of the Energy Star product or building yields a negative life-cycle cost savings.” HUD is also currently revising its regulations to implement the Energy 

Policy Act’s Energy Star requirements (Action 8.1). 

In addition, HUD’s public housing field offices have regularly hosted outreach events promoting 

Energy Star and other energy efficiency opportunities, and they have provided guidance in procurement practices that facilitate utility conservation. Approximately 100 energy conservation outreach 

activities were conducted in 2007 (Action 8.2). 

Earlier this year, the Public Housing Energy and Conservation Clearinghouse was revised to reflect 

a broader range of environmental, energy, safety, green building, and sustainability topics. The 

website was renamed the Public Housing Environmental and Conservation Clearinghouse (PHECC), 

and reformatted to improve access to guidance, best practices, and monthly e-newsletters. The 

Clearinghouse provides information on saving water and energy, protecting the environment, approaches to managing utilities, preventive maintenance practices, and electricity deregulation. The 

Clearinghouse can be found at www.hud.gov/offices/pih/programs/ph/phecc (Action 8.3). 

Results 

A survey of public housing authorities to gauge their knowledge of Energy Star and the extent to 

which they purchase Energy Star-qualified products was completed in June 2008 (Action 8.4). HUD 

surveyed 3,165 housing authorities; responses were received from 1,549. Fifty-three percent reported 

that they specify Energy Star-qualified products in their procurement plans. This includes 24 percent 

specifying Energy Star-qualified products and 29 percent specifying them when the products are 

shown to be cost-effective. 

26

[ACTION 9]


BUILD HOPE VI DEVELOPMENTS TO A HIGH LEVEL OF ENERGY 

EFFICIENCY. 

Planned Actions 

9.1	 Pursuant to the Energy Policy Act of 2005, publish a proposed rule establishing the 

2003 International Energy Conservation Code as the minimum standard for HOPE VI 

housing. 

9.2	 Continue to provide a rating point incentive for new HOPE VI grant awards, for projects 

meeting the higher standard for Energy Star-qualified new homes. 

9.3	 Encourage Energy Star as the standard for previously awarded HOPE VI projects that 

are still in the planning stages. 

9.4	 Monitor 15 current HOPE VI construction projects to assess implementation of energy 

conservation measures as part of the construction phase and encourage the use of 

Energy Star appliances and equipment, where cost-effective. 

9.5	 Distribute best practices compiled in FY 2005 and FY 2006 to public housing authorities 

and project sponsors, who will be encouraged to emphasize implementation of energy 

conservation in all aspects of HOPE VI construction and operation. 

Progress To Date 

The Energy Policy Act of 2005 required that all HOPE High Point, Seattle VI projects be built to “meet or exceed” the 2003 Seattle Housing Authority 

International Energy Conservation Code (IECC). This 

represented a significant increase in energy efficiency The first phase of this new mixed-income HOPE 

VI project consists of 320 new homeownership over the previous standard (the 1992 Model Energy units and 460 rental units. Energy-efficient 

Code). Subsequently, the Energy Independence and and green features included: low VOC paints, 

Security Act, enacted by Congress in 2007, raised adhesives, and cabinets; airtight dry wall conthe standard even further, to the 2006 IECC. HUD is struction; modified advance framing/panelized 

currently drafting a regulation requiring that HOPE VI walls; compact fluorescent lighting; Energy 

projects meet this minimum standard (Action 9.1). Star-labeled front-loaded washers and dryers; 

whole house fans; a closed-loop hydronic HVAC 

system; instantaneous hot water heaters; higher For several years, HUD has included language in its 

Notice of Funding Availability (NOFA) that encourages R value windows. In addition, 35 “Breathe Easy 

the adoption of Energy Star in new HOPE VI projects Homes” incorporated a number of features 

and, for the past 4 years (2005 through 2008), has 

provided a rating point incentive (1 point out of 125 

points) for energy efficiency. Candidates are awarded 

one point if they: (1) use Energy Star-labeled products, 

aimed at improving indoor air quality, including 

a high efficiency closed-loop boiler; filtered 

fresh air intake ports; low-E coated and argonfilled Energy Star windows. 

27

(2) promote Energy Star design of replacement units, and (3) include Energy Star in homeownership 

counseling. In addition, HUD staff has provided information on the Energy Star Builder Option 

Packages (BOPs) and additional information on Energy Star for qualified new homes during initial 

site visits for new grantees (Action 9.2). 

HUD is currently preparing a procurement that will enable it to provide information and technical 

support to HOPE VI grantees on both Energy Star and green building standards. It is expected that the 

procurement will be awarded in FY 2009 (Action 9.3 and Action 9.5). 

Results 

Energy efficiency in HOPE VI projects remains a voluntary activity, to be implemented at the discretion of the sponsoring housing authority and its developer. While there are several standout projects, 

anecdotal evidence indicates that most HOPE VI projects historically have not incorporated green 

building practices or built to the Energy Star standard for new homes, unless additional funds have 

been provided by state and local resources. 

That may be changing. All but 3 of the 63 applicants for HOPE VI funding in 2005–07 received a bonus point for energy efficiency. All five of the winning entries in 2007 were awarded the bonus point, 

as were all four of the 2006 winning entries. 

While HUD does not currently maintain a list of HOPE VI projects that are built to Energy Star for 

New Homes, PIH is awarding a technical assistance contract later this year through which the contractor will develop such a list, as well as undertake other capacity-building and monitoring activities 

related to green building. 

Each year HUD surveys a sample of 15 or more HOPE VI projects. In 2008, 29 housing authorities 

representing 35 different HOPE VI developments on 49 sites responded to the survey. Every HUD 

region except for Region 1 was represented. Thirteen of the 49 sites, with 1,695 units, reported achieving the Energy Star label for new homes. Thirty-six of the 49 sites reported that they specify Energy 

Star products or appliances. 

The 2008 data is consistent with results from previous surveys. Eleven of the 70 previously surveyed 

HOPE VI sites reported homes that received the Energy Star for New Homes label. Overall, energy 

use in the sampled HOPE VI properties was estimated to be 17 percent below other properties, and 

those sites certified as Energy Star reported savings of up to 25 percent compared with other properties. 

There are several outstanding projects that demonstrate what can be done to incorporate energy efficiency and green building in HOPE VI, either by leveraging state or local resources, or by creatively 

using HOPE VI funds. One project, Maverick Gardens in Boston, with support from the state of 

Massachusetts and the U.S. Department of Energy, includes a solar photovoltaic energy component, 

as well as a combined heat and power (cogeneration) system. Several HOPE VI projects in New 

Jersey have adopted the standard for Energy Star-qualified new homes (using state rebates), as have 

additional projects in Milwaukee, Wisconsin (Cherry Court); Louisville, Kentucky (Liberty Green); 

28

Seattle, Washington (High Point); Tacoma, Washington (Salishan); King County, Washington 

(Greenbridge); Oakland, California (Chestnut Linden Court); and Portland, Oregon (New Columbia). 

[ACTION 10]


IMPROVE TRACKING AND MONITORING OF ENERGY EFFICIENCY IN 

PUBLIC HOUSING. 

Planned Actions 

10.1	 Provide guidance through Notices on energy auditing standards and approaches 

for leveraging PHA operating and capital resources to implement energy efficiency 

programs, as well as through information on the Public Housing Energy Conservation 

Clearinghouse (PHECC). 

10.2	 Continue the public housing benchmarking initiative as part of the overall shift to asset 

management. 

Progress To Date 

Reporting utility consumption 

Historically, the only energy data reported by housing authorities to HUD consisted of authority-wide 

utility consumption and expenditures (dollars), but the consumption data were not captured in an automated system. The absence of energy consumption data for individual properties or projects made it 

difficult to set benchmarks for energy consumption, to identify top or poor performers, or to measure 

energy savings over time. That is beginning to change with the current shift to asset management. 

Under asset management, housing authorities began to report utility consumption (therms, gallons of 

heating oil, kilowatt hours) for individual properties in an automated system, the Subsidy and Grants 

Information System (SAGIS). This data will provide each housing authority with baseline information 

to monitor the results of its energy conservation programs and also provide HUD with a more accurate 

picture of energy consumption throughout the public housing stock. The data will be available for 

analysis for the first time in August 2008. 

Utility benchmarking 

Using a benchmarking approach developed through a partnership with the Environmental Protection 

Agency and Oak Ridge National Laboratories, HUD has developed an easy-to-use utility benchmarking model for public housing. The model met three objectives: first, to demonstrate that utilities can be 

benchmarked in public housing with a high degree of reliability (i.e., that the model is a good predictor of consumption in individual properties); second, to develop a preferred utility benchmarking approach, after consideration of a variety of methodologies; and third, to demonstrate that benchmarking 

can be useful to a housing authority in targeting low-performing buildings. 

29

The benchmarking model now represents one of the largest databases of utility consumption in residential properties in the country. In 2005, a proof of concept model was developed with data from 595 

buildings in HUD Regions 2 and 3, and in 2006 this was expanded to eight HUD regions, for a total 

of 4,722 properties from 161 housing authorities nationwide. The tool was posted on the web in June 

2008 and is now available for use by housing authorities. (See www.hud.gov/offices/pih/programs/ph/ 

phecc/econserve.cfm.) 

The benchmarking model will allow housing authorities to quickly determine how well their properties are doing against a reliable benchmark for particular building types in different climate zones. It 

covers all public housing property types, from high-rise buildings to single-family properties. (See 

Appendix 2.) 

HUD is continuing to develop its Benchmarking and Utility Consumption and Cost System (BUCCS) 

to track and monitor consumption at the project level as part of the transition of public housing to 

asset management. HUD anticipates that an expansion of the current pilot approach will provide a 

useful tool for budgeting, allocating utility resources, and measuring performance. After completing 

a feasibility study inclusive of industry interests, HUD will convene a meeting with representation of 

appropriate stakeholders to review utility benchmarking options as required by the asset management 

regulations at 24 CFR 990.185(c). 

Energy auditing standards 

HUD regulations require housing authorities to conduct an energy audit every 5 years and to incorporate the most cost-effective energy efficiency measures in their capital plans. HUD suggests that faster 

payback items be funded first. HUD requires that conservation measures be funded first from operating funds, then from alternative sources such as operating reserves, and finally from capital funds or 

redevelopment funds, where available. Housing authorities may also use third-party financing. 

HUD provides performance criteria for the energy audit, but does not provide a prescriptive format. 

Housing authorities are provided maximum flexibility in program administration, specifically 

related to lowering utility consumption and costs in the most efficient and effective ways possible. 

Comprehensive guidance on conducting energy audits is available at two HUD websites.32 

HUD’s 2006 and 2007 Management Plans included a performance measure that required field offices 

to verify that all housing authorities had a current energy audit on file. 

Streamlining utility reporting 

HUD is piloting a system for downloading public housing energy bills directly from utility companies. Four initial pilot sites have been identified: Denver Housing Authority, Colorado; Prince 

George’s County Housing Authority, Maryland; Marion County Housing Authority, Illinois; and 

32 See www.hud.gov/offices/pih/programs/ph/phecc/noteworthy/noteworthyarchive.cfm and www.hud.gov/offices/ 

cpd/affordablehousing/training/web/energy/help/audits.cfm. 

30

Auburn Housing Authority, Maine. HUD has also requested participation from nine additional sites in 

Maryland. 

The objective of the pilot is to provide HUD with a management tool that will enable both HUD and 

housing authorities to better manage utility costs. The pilot is aimed at streamlining the capture of 

utility data from housing authorities, by automatically downloading the information from local utilities. The data can then be used to validate reporting of utilities by public housing authorities (HUD 

form-52722) and to identify buildings that could benefit from implementation of energy conservation 

measures. 

[ACTION 11]


STREAMLINE ENERGY PERFORMANCE CONTRACTING IN PUBLIC 

HOUSING. 

Authorized by Congress in 1992, energy performance contracting is the primary tool available to public housing authorities for carrying out energy efficiency in public housing. An energy performance 

contract is an agreement with a private energy services company (ESCO) that provides financing for 

energy efficiency measures; oversees the installation of these measures; and provides long-term services, such as monitoring of energy use, training of maintenance staff, and energy education of residents. 

Typically, the ESCO guarantees a certain level of savings and “shares” the savings with the housing 

authority. Under a performance contract, housing authorities are able to retain 100 percent of the savings for the duration of the contract (12 to 20 years). (For energy efficiency investments not financed 

through energy performance contracts, housing authorities can retain 75 percent of the savings, for no 

more than 3 years.) Housing authorities are also allowed to act as their own performance contractor 

and take advantage of this initiative. 

Planned Actions 

11.1	 Continue to support energy performance contracting as a vehicle for implementing 


energy efficiency. 


11.2	 Field offices will continue to streamline the procedures for reviewing energy 


performance contracts so that they are reviewed in a timely manner. 


11.3	 Revise regulations at 24 CFR 965 and 24 CFR 990.185 to address the provisions of the 

2005 Energy Policy Act. 

11.4	 Implement the provisions of the 2005 Energy Policy Act extending performance 


contracts from 12 to 20 years. 


11.5	 Implement new quality assurance initiatives that will track energy performance contract 

activity. 

31

11.6	 Update regulations to ensure consistency with other regulatory changes. 

11.7	 Support extending energy performance contracts to smaller public housing authorities 

through “aggregated” contracts involving multiple public housing authorities. 

11.8	 Work with public housing authorities wishing to act as their own agent to serve as their 

own performance contractor. 

Progress To Date 

Several actions have been taken to strengthen the role of energy performance contracting as an energy 

financing tool for housing authorities. These include: (1) issuing a new notice (Notice 2008-22) 

implementing the provision of the Energy Policy Act of 2005 that extends the maximum term of a 

contract from 12 to 20 years, (2) strengthening technical support to housing authorities, (3) identifying 

strategies for enabling smaller housing authorities to utilize energy performance contracts, and (4) 

conducting training workshops for housing authorities (Action 11.1). 

•	 Streamlining	review	of	performance	contracts. HUD has conducted a series of training workshops 

to support field offices and housing authorities in implementing energy performance contracts. Over 

the past 12 months workshops have been held in Atlanta, 

San Francisco, Little Rock, Honolulu, New York City, Jacksonville, Denver, and Boston. In addition to the workshops, HUD retained an engineering firm (New West Technologies) to help housing 

authorities review and implement these contracts and to train local HUD staff in coordinating and 

processing energy performance contracts. A total of 39 energy contracts have been facilitated to 

date (Action 11.2). 

•	 Extending	length	of	performance	contracts	from	12	to	20	years.	HUD is currently revising its regulations to implement provisions in the Energy Policy Act of 2005 as well as the 2008 Consolidated 

Appropriations Act. These provisions extend the term of both new and existing performance 

contracts from 12 to 20 years. The longer contract term will enable housing authorities to expand 

the scope and scale of their investments in energy efficiency. Until the new regulations are issued, 

HUD will continue to issue waivers to extend the term of energy performance contracts to 20 years. 

HUD also published PIH Notice 2008-22, which provided guidance for field offices and housing 

authorities in 2008 on implementing the extended contract term (Action 11.4). 

•	 New	quality	assurance	initiatives. HUD is currently revising its Energy Performance Contracting 

Handbook, otherwise known as the “Green Book.” When a draft of the Green Book is completed, 

HUD will conduct a workshop with energy services companies, third-party consultants, housing 

authorities, and HUD field staff to resolve any issues related to the proposed procedures. A final 

document will be produced that represents the best thinking of stakeholders in energy performance 

contracting (Action 11.5). 

•	 Aggregated	contracts	for	smaller	housing	authorities. Historically, the use of energy performance 

contracts has been limited to larger housing authorities. HUD has begun to promote energy perfor32

mance contracts for smaller public housing authorities through “aggregated” contracts that involve 

multiple smaller public housing authorities joining forces on a single contract. This aggregated 

approach is being tested in two locations—New Jersey and Southern California (Action 11.6). 

•	 Housing	authorities	acting	as	their	own	performance	contractor. HUD is also working with 

housing authorities that wish to serve as their own performance contractor, rather than using a 

third-party ESCO. The primary advantage of working with a housing authority on a self-developed 

project is higher retained energy savings. However, in exchange for greater savings, the authority 

assumes a greater share of the risk. A housing authority will therefore need to ensure it has the 

capacity to manage its own energy project successfully; it will need to demonstrate expertise in 

energy engineering, knowledge of HUD’s rules and regulations, financing, building commissioning, 

construction management, and performance measurement and verification. As of March 2008, 14 

housing authorities have self-financed projects under way. Of 21 prospective energy performance 

contracts, 5 are currently slated to be self-developed by the housing authority. 

Results 

Streamlined processing, combined with private sector initiative, has resulted in a significant increase 

in the number of executed energy performance contracts in public housing. As of October 1, 2007, 

a total of 154 active executed energy service contracts were in force. From October 2006 to October 

2007, the guaranteed savings of all energy performance contracts increased by 81 percent, from $37.6 

million to $68 million. Energy conservation investments as of October 2007 totaled $471.6 million, 

representing an increase of almost $121 million (approximately 35 percent) over the previous year. 

As of March 2008, the number of energy performance contracts had increased to 183, representing a 

total investment of $564 million with annual savings of $102.8 million; 168 contracts are in repayment, 5 are currently under construction or have signed a contract to begin construction, and 10 have 

completed repayment. Another 21 projects are in progress, 7 projects have completed an investment 

grade audit, and another 14 are in the preaudit stage. These contracts now total 204 projects. 

[ACTION 12]


PROMOTE ENERGY CONSERVATION IN FEDERALLY ASSISTED 

HOUSING ON INDIAN TRIBAL LANDS. 

Title V, “Indian Energy,” of the 2005 Energy Policy Act, contains Section 506, “Energy Efficiency in 

Federally Assisted Housing.” Section 506 directs HUD to “promote energy conservation in housing 

that is located on Indian land and assisted with Federal resources,” through the following: 

•	 Use of energy-efficient technologies and innovations (including the procurement of energy-efficient 

refrigerators and other appliances). 

•	 Promotion of shared savings contracts. 

33 
•	 Use and implementation of such technologies and innovations as the Secretary of HUD deems appropriate. 

Section 506 also makes energy efficiency activities eligible costs under the Native American Housing 

Assistance and Self-Determination Act of 1996 (NAHASDA). Section 202(2) of NAHASDA was 

recently amended by adding a specific reference to improving energy efficiency as an eligible affordable housing activity. 

Planned Actions 

12.1	 Offer a one-point incentive in Indian Community Development Block Grant (ICDBG) 

competitive grant programs for applications that address Energy Star goals. 

12.2	 The Northern Plains Office of Native American Programs (ONAP) will work with 

EPA’s Office of Pollution Prevention and Toxics on green team training, which includes 

energy efficiency. 

12.3	 The Northwest ONAP will provide technical assistance to emphasize green/energyefficient design and construction, with a focus on assessing existing “green housing,” 

developing a training program, providing technical assistance, and conducting 

workshops to share information on innovative projects that are occurring in the Pacific 

Northwest. A training manual will be developed for use in all other ONAP regions. 

12.4	 The Northern Plains ONAP will establish relationships with the Department of Energy’s 

Tribal Energy Program, the Department of Interior’s Division of Energy and Mineral 

Development, the University of Colorado, the National Renewable Energy Laboratory, 

and others. 

12.5	 As an adjunct to its study of Indian housing costs, ONAP will expand its onsite work to 

conduct a more complete review of Indian housing utility costs. On completion of the 

surveys, the contractor will provide a more comprehensive report to HUD addressing 

common problem areas and recommended solutions. ONAP will provide the report to 

all tribes and TDHEs. 

12.6	 Explore marketing Energy Efficient Mortgages as a priority loan product. 

12.7	 Continue discussing collaboration and potential partnerships on renewable energy 

resources and geothermal energy with the Department of Interior’s Office of Indian 

Energy Resource Development and the Bureau of Indian Affairs’ Office of Policy and 

Economic Development. 

34

Progress To Date 

The Office of Native American Programs (ONAP) promotes energy-efficient construction, including 

the use of energy-efficient building materials, Energy Star appliances, windows, insulation, and heating systems in housing units funded by NAHASDA grants. ONAP also encourages tribes and tribally 

designated development entities (TDHEs) to use the variance provision in the Total Development 

Cost (TDC) Notice (PIH Notice 2007-11) for green building practices. This provision can accommodate additional costs associated with the use of energy-efficient materials. 

ONAP has taken several additional actions: 

•	 Beginning in FY 2007, Indian Community Development Block Grant (ICDBG) applicants may 

receive a one-point incentive on applications that address Energy Star goals (Action 12.1). ONAP is 

also exploring coordination with EPA’s Office of Pollution Prevention and Toxics on disseminating 

green building materials to Native American tribes (Action 12.2). 

•	 ONAP has initiated an active training program on energy-efficient and green building in Indian 

housing (Action 12.3). In 2006 ONAP sponsored an initial energy efficiency training, Building	

Green:	Sustainable	&	Innovative	Design	for	the	Tribes	of	the	Northwest. Course objectives 

included learning about the basic concepts of green or sustainable home design through discussion, 

presentation, and hands-on activities. Special emphasis was placed on understanding and applying 

an integrated approach to design, right from the beginning. 

Training concepts from this initial workshop were used in developing training throughout Indian 

Country. One national training and five regional trainings on Creating	Energy-Efficient,	Comfortable,	

and	Healthy	Tribal	Homes have been held since December 2007. Topics covered include indoor 

air quality, mold, mildew, and moisture problems; insulation; water management; partnerships 

and financing; proper weatherization; and renewable energy efficiency techniques.33 In addition, in 

November 2007, ONAP awarded a contract to conduct 12 energy-related, on-site visits per year, 

as well as 6 “Energy Efficiency” trainings to recipients. The site visits include mold and moisture 

assessments and energy assessments of tribal homes at each site, for a total of 48 assessments. 

•	 The Northern Plains ONAP has assisted in the promotion of Department of Energy workshops 

in Denver, Colorado: a “Tribal Business Development and Financing Workshop,” and a “Tribal 

Energy Program Review” (Action 12.4). 

•	 In March 2006 ONAP expanded the scope of its Indian Housing Operating Cost Study work to address provisions of the Energy Policy Act of 2005. ONAP conducted 15 on-site energy assessments 

for tribes and TDHEs. The assessments considered energy costs, sources of energy, energy delivery 

methods, and the results of home energy efficiency assessments. Home inspections included 

33 A national workshop was held June 17–19, 2008, in Reno, Nevada. Regional training workshops have been held, 

as follows: Santa Fe, New Mexico, December 11–12, 2007; Denver, Colorado, February 27–28, 2008; Seattle, 

Washington, March 18–19, 2008; Portsmouth, New Hampshire, April 15–16, 2008; Anchorage, Alaska, May 5–6, 2008. 

35

an assessment of the energy efficiency performance of the home and identification of specific 

improvements to increase energy efficiency. When utility bills were available, cost analyses were 

conducted. At least four preselected homes were assessed at each site (Action 12.5).34 

•	 ONAP’s Office of Loan Guarantee responded to inquiries on Energy Efficient Mortgages, but found 

the cost of green construction to be problematic for the Section 184 Indian Housing Loan Guarantee 

program (Action 12.6). 

34 The Notice extended PIH Notice 2006-17, Total Development Costs for Affordable Housing under the Native 

American Housing Assistance and Self-Determination Act of 1996, NAHASDA. This Notice provides for a variance 

for “significant additional costs for incorporating green building, energy efficiency or other innovative practices.” 

See www.hud.gov/offices/pih/publications/notices/06/pih2006-17.pdf. 

36

iv. Housing—single Family 

HUD’s energy strategy includes the following three actions aimed at increasing the visibility and use 

of FHA-insured Energy Efficient Mortgages and other FHA mortgage products for energy efficiency. 

Action Housing—Single Family 

13 Feature the Energy Efficient Mortgage as a priority loan product. 

14 Provide training on how FHA single-family programs can be effectively used to promote energy efficiency. 

15 Continue improved tracking, and evaluate performance, of Energy Efficient Mortgages. 

In its FY 2007 Management Report, FHA reports a total of 3.7 million insured single-family mortgages and 12,156 insured multifamily projects in its portfolio. Total mortgage insurance in force is 

currently just under $400 billion. FHA’s single-family mortgage insurance business is 85.67 percent 

of its total insurance in force. The multifamily and healthcare insurance is 14.16 percent of the total. 

Title I property improvement insurance and manufactured home insurance are 0.17 percent of insurance in force.35 

FHA’s Energy-Related Mortgage Products 

FHA has several products that allow borrowers to address energy efficiency in single-family housing. 

These products include: 

•	 Energy	Efficient	Mortgages	(EEM)—The Energy Efficient Mortgage for single-family borrowers 

permits a borrower to finance up to 5 percent of the cost of eligible energy-efficient improvements, 

without a second appraisal and without further credit qualification of the borrower. The Energy 

Efficient Mortgage can be used with both purchase and refinance transactions and in new and 

existing homes. The recently enacted Housing and Economic Recovery Act of 2008 removes the 

previous $8,000 cap on the amount that can be financed. 

•	 Energy	Efficient	Homes	(EEH)—New single-family homes that are built to the 2000 International 

Energy Conservation Code (IECC) are eligible for a 2 percent “stretch” on standard debt-to-income 

ratios. Higher ratios are justified by the anticipated energy cost savings associated with the property. 

•	 FHA’s	203(k)	Rehabilitation	Program—This is a purchase-rehab program that can be used to make 

energy conservation improvements at the time of purchase. Energy-efficient improvements, such 

as new double-pane windows, insulation, solar domestic hot water systems, caulking, and weatherstripping can be included with other improvements or repairs. 

•	 FHA’s	Title	I	Property	Improvement	Program—This is a home improvement loan that can be used 

to improve the energy efficiency of a home. Title I loans are usually second loans. While their pri35 FHA Annual Management Report, FY 2007. 

37 
mary use is to make needed repairs or improvements to residential properties, Title I loans can also 

be used for weatherization or other energy conservation improvements. The maximum loan amount 

is $25,000. 

•	 Weatherization—Borrowers may include up to $3,500 to pay for basic weatherization items as part 

of a standard FHA loan. Eligible measures include thermostats, insulation, storm windows and 

doors, weatherstripping and caulking, and similar building envelope improvements. Up to $2,000 

may be added to the mortgage amount without a separate value determination; or up to $3,500 if 

supported by a determination by an approved or FHA appraiser or underwriter.36 

[ACTION 13]


FEATURE THE ENERGY EFFICIENT MORTGAGE AS A PRIORITY LOAN 

PRODUCT. 

Planned Actions 

13.1	 Through HUD’s four Homeownership Centers, take steps to increase consumer 


awareness of Energy Efficient Mortgages. 


13.2	 Promote the use of the Energy Efficient Mortgage with the 203(k) Rehabilitation 


program, as well as other single-family loan products. 


13.3	 Continue Energy Efficient Mortgage marketing efforts. 

13.4	 Provide information to industry partners, such as lenders, housing counseling agencies, 

and real estate agents. 

Progress To Date 

While Energy Efficient Mortgages were first authorized by Congress in 1992 and subsequently expanded to a national program, they remain an underutilized FHA product. While the theory behind the 

Energy Efficient Mortgage is sound—financing energy improvements through energy savings, at the 

time of sale—the product has not made significant inroads in the marketplace. This experience is true 

for FHA as well as for Fannie Mae, Freddie Mac, and the Department of Veterans Affairs (VA), all of 

which are authorized to offer this product. 

HUD’s original Energy Action Plan, adopted in April 2002, and the August 2006 Report to Congress 

both included a proposal to make the Energy Efficient Mortgage a “priority loan product” and to 

undertake a variety of lender training and consumer education and marketing efforts to expand the use 

36 A contractor’s statement of cost of work completed or a buyer’s estimate of the cost of materials must be submitted. See HUD Handbook 4150.1 REV-1 and HUD Handbook 4145.1 REV-2 for details. 

38

of this product. These actions have not been implemented, beyond routine FHA outreach and training, 

primarily due to a lack of marketing funds, insufficient incentive for lenders to underwrite the product, 

and the difficulty of incorporating the energy elements of the mortgage into the standard underwriting/ 

loan closing process. 

In addition, in light of the sharp fall-off in the size of the overall FHA portfolio in 2006 and 2007 and 

the pressing need to reform the underlying FHA portfolio of products in order to serve underserved 

customers, FHA has not viewed the Energy Efficient Mortgage as a vehicle for increasing market 

share. 

However, information and training on Energy Efficient Mortgages have been provided to lenders 

as part of industry trainings, and brochures on Energy Efficient Mortgages have been distributed to 

consumers at homeownership fairs (Action 14). 

Results 

FHA insured a total of 532,494 mortgages in 2007, of which 281,883 were initial purchase endorsements and 69,061 were minority first-time homebuyers. The majority of these were Section 203(b) 

mortgages (403,000). Of these, 1,066 Energy Efficient Mortgages were reported; 861 Energy Efficient 

Mortgages were reported in 2006.37 

Year Number

2005 43038 

2006 861 

2007 1,066 

The following is a list of participating lenders: National City Bank; Meridias Capital Inc.; Metro 

Lending Inc.; Heartwell Mortgage Corporation; Summit First Financial LLC; Columbus Home 

Mortgage LP; Endeavor Capital Mortgage LP; Colony Mortgage Corporation; Virginia Housing 

Development Authority; Countrywide Home Loans Inc; M-I Financial Corp; Freedom Mortgage 

Corporation; and Carolina First Bank. 

37 The 2005 figure may represent a partial count, due to the change in reporting procedures that were implemented 

that year. 

39

[ACTION 14]


PROVIDE TRAINING ON HOW FHA SINGLE-FAMILY PROGRAMS CAN BE 

EFFECTIVELY USED TO PROMOTE ENERGY EFFICIENCY. 

Planned Action 

14.1	 Conduct outreach and provide guidance and training for housing professionals (e.g., 

underwriters, realtors, appraisers, home inspectors, and program support staff) on FHA’s 

programs promoting energy efficiency. 

Progress To Date 

Training for housing professionals on Energy Efficient Mortgages is typically included in standard 

lender training programs hosted by HUD’s four Homeownership Centers. Each Homeownership 

Center is expected to conduct eight or more training sessions on Energy Efficient Mortgages per year. 

All four Homeownership Centers report providing training on Energy Efficient Mortgages. Training 

was provided in Buffalo, New York; Detroit, Michigan; Cincinnati, Ohio; Providence, Rhode Island; 

Long Island, New York; Portland, Oregon; Las Vegas and Reno, Nevada; and Anchorage, Alaska, as 

well as in other locations. 

The Santa Ana Homeownership Center conducted a specialized training on Energy Efficient 

Mortgages and solar energy opportunities in California. This session focused specifically on opportunities for FHA financing that can take advantage of incentives for solar energy systems in that state. 

The session attracted an audience of lenders and other housing professionals. 

[ACTION 15]


CONTINUE IMPROVED TRACKING, AND EVALUATE PERFORMANCE, OF 

ENERGY EFFICIENT MORTGAGES. 

Planned Actions 

15.1	 Continue to implement the improved method for tracking Energy Efficient Mortgages 

through the Computerized Home Underwriting Management System (CHUMS), which 

was developed in 2004. 

15.2	 Generate quarterly reports documenting the number of Energy Efficient Mortgages 


insured each quarter, broken down by region or state.


15.3	 Subject to funding availability, the Office of Policy Development and Research (PD&R) 

and FHA will assess FHA’s experience with Energy Efficient Mortgages to determine 

the relative risk of default and claims for this product, compared with other types of 

FHA mortgages. 

40

Progress To Date 

Beginning in 2005, HUD implemented revised procedures to provide for more accurate reporting and 

tracking of Energy Efficient Mortgages. In the past, any mortgage for a new home that exceeded the 

1992 Model Energy Code could be reported as an Energy Efficient Mortgage, resulting in inflated 

numbers for this mortgage product. Lenders are now required to report the escrow amount set aside 

for an Energy Efficient Mortgage. As a result of the revised procedures, the number of Energy Efficient 

Mortgages currently being reported each year is a more accurate reflection of actual production. 

HUD continues to implement the improved method for tracking Energy Efficient Mortgages through 

the CHUMS reporting system (Action 15.1). FHA generates annual reports on the number of Energy 

Efficient Mortgages, but not on a quarterly basis or broken down by region or state (Action 15.2). Due 

to lack of available research funds and the fact that the Energy Efficient Mortgage remains an underutilized product, there are no plans to conduct an assessment of the performance of Energy Efficient 

Mortgages compared with other FHA products (Action 15.3). 

41

v. Housing—multiFamily 

HUD-assisted and HUD-insured multifamily portfolio consists of 31,808 privately owned properties 

that house almost 2.4 million households.38 Of these, 1.58 million units in 22,725 properties receive 

project-based rental assistance,39 a portion of which is used to pay for utilities. 

The following actions addressing energy costs in this portfolio are included in HUD’s energy strategy: 

Action Housing—Multifamily 

16 Promote energy efficiency in multifamily-assisted housing and multifamily programs. 

17 Continue HUD-DOE multifamily weatherization partnerships. 

18 Encourage use of Energy Star new home standards in the design, construction, and refinancing of Section 202 and 

811 projects. 

19 Develop incentives for energy efficiency through FHA multifamily insurance programs. 

20 Explore asset management strategies and guidance for energy efficiency in HUD-subsidized multifamily properties. 

21 Support energy efficiency training for multifamily managers and maintenance staff. 

[ACTION 16] 

PROMOTE ENERGY EFFICIENCY IN MULTIFAMILY-ASSISTED HOUSING 

AND MULTIFAMILY PROGRAMS. 

Energy efficiency and green building are voluntary in HUD-insured multifamily housing. However, 

HUD encourages property owners to incorporate energy efficiency in their new properties. 

Planned Actions 

16.1	 Incorporate the Energy Action Plan in meetings with industry partners to promote 


energy efficiency in HUD-assisted properties.


16.2	 Encourage FHA mortgage insurance applicants to utilize Energy Star products and new 

construction standards. 

Progress To Date 

Through electronic mailings, industry meetings, lender contacts, and industry training broadcasts to 

owners and agents of FHA- and HUD-affiliated privately owned multifamily properties, HUD continues to make information available and encourages property owners to use energy-efficient measures 

in their properties. An Energy Tracking Report was put in place in December 2006 to monitor these 

activities (Action 16.1). 

38 Office of Multifamily Housing, May 1, 2006. 


39 More recent totals from the National Housing Trust (February 2007) show 22,563 properties with 1,372,235 units 


receiving project-based assistance.


42

In addition, HUD encourages energy efficiency by including the language noted below with each 

MAP (Multifamily Accelerated Processing) Team approval—the first step in a new application for 

mortgage insurance: 

“HUD strongly recommends that new construction and rehabilitation projects utilize energy 

saving construction methods, mechanical systems, and appliances. In particular, those meeting 

Energy Star standards should be considered. Therefore, please encourage your mortgagors and 

developers to incorporate such energy saving approaches into their plans and specifications.” 

HUD also encourages all Multifamily Housing offices to distribute the following with each request for 

withdrawal of Reserve for Replacement (R4R) funds:40 

“HUD encourages all requests for appliance disbursement and other disbursements from 

Reserve for Replacements that can exercise energy conservation to utilize energy saving 

devices, including Energy Star construction standards and appliances. Please explore such 

energy savings methods and devices in your property replacements.”41 

Results 

Multifamily field offices report that in 2007, they encouraged energy efficiency in properties containing 39,872 units whose total mortgage amount was $1.15 billion. Energy conservation was also 

encouraged in $4.6 billion of Reserve for Replacement (R4R) investments covering 82,775 units. 

HUD’s Office of Multifamily Housing participated in 335 meetings in which HUD staff discussed 

HUD’s Energy Action Plan and/or encouraged energy conservation. HUD is exploring procedures 

for documenting the outcome of these actions in terms of energy efficiency investments or resulting 

energy savings. 

[ACTION 17] 

CONTINUE HUD-DOE MULTIFAMILY WEATHERIZATION PARTNERSHIPS. 

Many low- to moderate-income recipients of HUD assistance also qualify for the Department of 

Energy’s Low-Income Weatherization Assistance Program. Accordingly, HUD’s energy plan includes 

a plan to develop partnerships with DOE’s Weatherization Assistance Program to improve the energy 

efficiency of HUD properties, modeled on partnerships that successfully leveraged such funds for 

assisted properties in New York State. 

40 A sticker is placed on Form 9250 with this language. 


41 This language is provided to Management Agents and Owners with each R4R reimbursement request authorized 


by HUD where energy efficiency measures could be included in future expenditures.


43

Planned Actions 

17.1	 HUD and DOE will continue to identify additional weatherization partnership 


opportunities. The Office of Multifamily Housing will recommend suitable candidate 


projects to participate in the Weatherization Pilot Partnership, based on information 


provided to the Office of Multifamily Housing by the Department of Energy through 


PD&R. 


17.2	 Identify energy partnership opportunities to assist multifamily properties to undertake 

energy efficiency improvements (e.g., Low-Income Housing Energy Assistance 

weatherization funds, state Clean Energy Funds, utility-sponsored energy efficiency 

programs, and other state and local energy efficiency programs and services). 

17.3	 To the extent feasible, consider options to capitalize energy efficiency improvements 

including flexible use of reserves, rent increases, budget adjustments, or other suitable 

asset management strategies. 

Progress To Date 

Weatherization Partnerships 

HUD continues to explore leveraging weatherization partnerships with DOE at the national level. In 

some parts of the country, weatherization partnerships have been established with utility program 

providers and state agencies, particularly in states that have established utility-financed public benefit 

funds, such as the Low Income Energy Efficiency Program in California and the Assisted Multifamily 

Program/Multifamily Performance Program in New York. These partnerships have resulted in energy 

efficiency improvement in hundreds of HUD-assisted multifamily properties. 

Pilot projects have been successfully implemented at the state and local level, as follows: 

St. Louis Pilot 

A pilot multifamily weatherization project that successfully leveraged DOE weatherization funds was 

implemented in a HUD-assisted senior housing project in St. Louis, Missouri. The property consisted 

of a 100-unit, 94,000-square-foot facility in three separate buildings. Through a cooperative agreement between DOE’s Midwest Regional Office and the Missouri Energy Center, the St. Louis Urban 

League (the local weatherization assistance provider) implemented an energy retrofit in the property. 

The work included the following: 

Lighting:

200 T8 fluorescent hallway fixtures 

1,000 compact fluorescent lights (CFLs) in individual apartments 

Motion sensors for lighting in public rooms 

LED exit signs 

44 
Appliances: 

15 Energy Star refrigerators 

100 low-flow showerheads 

Heating and Cooling: 

Tune up domestic hot water heaters 

Insulate hot water piping 

90 new heat pumps 

The total cost of the retrofit was $95,255, which yielded annual savings of $28,923, for a simple payback of 3.3 years. Almost all of the items installed had very rapid returns on investment, with simple 

paybacks of 3 years or less. 

California Multifamily Weatherization Pilot 

HUD’s Region 9 office identified six potential candidates for a weatherization pilot in California. 

Since California receives limited federal weatherization assistance (less than $7 million a year), the 

proposed improvements were generally funded with a mix of utility and state and local resources. 

Projects included: 

•	 The Californian, a 217-unit HUD-assisted affordable 

housing project in Fresno, completed the first phase 

of an energy efficiency retrofit involving replacement 

of two inefficient and obsolete boilers. The state’s 

Design for Comfort program provided $151,200 for the 

boiler replacement and related energy improvements. 

Additional energy improvements were funded by 

Pacific Gas and Electric’s (PG&E) Low Income Energy 

Efficiency program, the DOE Weatherization Assistance 

Program, and the American Synergy Corporation’s Heating, Ventilation and Air Conditioning 

(HVAC) program. Improvements include attic and pipe insulation, residential thermostats controls, 

HVAC tune-up, and Energy Star-qualified windows. 

•	 The historic Franco Center housing development, a 110-unit HUD-assisted multifamily project in 

downtown Stockton, was identified as a potential weatherization candidate. Franco Center received 

assistance from the Bay Area Local Initiatives Support (LISC) Energy Action program, which 

conducted an energy consultation with the project officials and performed energy audits. The local 

Weatherization Assistance Program provider declined to participate due to funding limitations; 

financing was obtained instead from the California Housing Finance Agency to cover the cost of 

replacing a boiler, chiller, and boiler controls ($1.8 million). 

New York State 

New York State continues to be a leader in providing weatherization to multifamily properties in 

both public and assisted housing, either directly or in partnership with the New York State Energy 

45

Research and Development Administration (NYSERDA). NYSERDA reports 22 HUD-assisted projects (60 buildings) with 3,474 units as having completed energy retrofits through the state’s Assisted 

Multifamily Program. Another 11 projects (29 buildings) with 2,141 units are under construction or in 

the project design phase. Low-interest financing was or is being provided by NYSERDA, but in some 

cases the state’s weatherization funds are used as well. 

[ACTION 18]


ENCOURAGE USE OF ENERGY STAR NEW HOME STANDARDS IN THE 

DESIGN, CONSTRUCTION, AND REFINANCING OF SECTION 202 AND 

811 PROJECTS. 

HUD Section 202 and 811 projects for elderly and disabled persons provide housing to many lowincome households on fixed incomes. The primary incentive for efficiency in these programs is gaining an added rating point for energy efficiency in the annual NOFA. 

Planned Actions 

18.1	 Include competitive points for energy efficiency in the annual NOFAs. 

18.2	 Work with the Energy Task Force in establishing energy efficiency rating criteria for 


future NOFAs. 


18.3	 For projects undergoing refinancing, consider encouraging energy audits in conjunction 

with physical assessments—properties will be encouraged to undertake energy 

efficiency improvements in conjunction with refinancing transactions. 

18.4	 The Energy Task Force will assist the Office of Multifamily Housing in identifying 


possible technical resources to assist property owners to design effective energy 


improvement strategies. 


Progress To Date 

HUD continues to include one point (out of a total of 100) in its annual NOFA for those applicants 

that indicate that they will use energy-efficient measures in their Section 202 or Section 811 properties 

(Action 18.1). 

The Multifamily Energy Task Force described under Action 19, below, has developed language for 

specific performance requirements for future Section 202 and 811 grant competitions. The point for 

energy efficiency is currently awarded by an Architecture and Engineering (A&E) reviewer, based on 

the design architect’s narrative. The new approach would ensure that existing homes or new construction projects would be required to implement specific measures. This is expected to take effect in 

FY 2009 (Action 18.2). 

46

Action 18.3 and Action 18.4 have been piloted on the west coast. HUD’s Region 9 office (California, 

Nevada, Arizona, and Hawaii) launched a Multifamily Energy Efficiency Initiative, in partnership 

with Pacific Gas and Electric, which shows great promise for other regions. Property owners applying 

for renewal of federal rental assistance contracts are requested to complete an energy audit (conducted 

by the local utility) and then incorporate energy efficiency measures in the project refinancing and 

reserve for replacement plans. HUD is also assisting sponsors of Section 202 housing in Region 9 by 

identifying cost-effective energy efficiency improvements that can reasonably be included in their 

refinancing plans. HUD has asked project sponsors to prioritize energy investments with payback 

periods of 5 years or less, as part of the project’s refinancing transactions, or, alternatively, in conjunction with project operating or reserve for replacement plans. 

Results 

Of 320 applications for Section 202 and Section 811 funding in FY 2007, 263 indicated that they 

would include energy efficiency measures in their projects and, as a result, were awarded bonus points 

when their applications were rated for funding. All 103 Section 202 winners and 99 Section 811 grant 

award winners received the extra point. However, there is as of yet no documented evidence of greater 

levels of energy efficiency in Section 202 or Section 811 Supportive Housing, in part because of the 

time involved before these properties start construction. 

[ACTION 19]


DEVELOP INCENTIVES FOR ENERGY EFFICIENCY THROUGH FHA 

MULTIFAMILY INSURANCE PROGRAMS. 

Planned Actions 

19.1	 Explore incentives for new applications for mortgage insurance or projects seeking 

refinancing to adopt Energy Star (or its equivalent for mid-rise or low-rise multifamily 

buildings). 

19.2	 For affordable housing projects developed by nonprofit and faith-based organizations 


examine the feasibility of providing incentives to capitalize Energy Star new 


construction requirements. 


Progress To Date 

Multifamily Task Force 

HUD’s Office of Multifamily Housing convened a Task Force of field and headquarters staff to 

recommend incentives for increasing energy efficiency through its insured housing programs. In 

September 2007, FHA Commissioner Brian Montgomery approved 12 incentives for implementation, 

including the 5 listed below for new mortgage insurance or refinancing of existing mortgages: 

47

•	 Reduce application and/or inspection fees by 50 percent for properties using energy conservation 

techniques and/or achieving Energy Star certification. The current application fee is $3 per $1,000. 

•	 Extend the maximum term of the mortgage for up to 50 years for a project that receives an Energy 

Star certification. Extending the term would result in significantly lower mortgage payments. 

•	 Allow installation of Energy Star products to be considered a “major building component” for 

determination of substantial rehabilitation in order to use 221(d)(4) mortgage insurance, instead of 

223(f). This would allow energy-efficient properties to secure a 90 percent mortgage, rather than an 

85 percent mortgage. 

•	 Place a notice in the Real Estate Management System (REMS) that a project used Energy Star 

appliances or products, thereby ensuring that future replacement items will also meet Energy Star 

standards. 

•	 Create a Section 241(e) loan program to finance energy-efficient systems in properties that are 

master-metered and are currently insured by HUD. The loan will be eligible for Multifamily 

Accelerated Processing (MAP), which would result in faster processing. The allowable financing 

fee will be increased from between 1.5 percent and 3 percent, to gain lender acceptance. 

The Office of Multifamily Housing is currently identifying the regulatory and handbook changes that 

will be required to implement the measures. The target date for implementing these items is December 

2009. 

The Mark to Market Program Green Initiative 

HUD initiated a Green Remodeling Initiative in November 2007 though its Mark to Market program. 

This voluntary pilot program offers strong financial incentives for private owners to adopt green 

building practices in both the rehabilitation and operation of their HUD-subsidized, federally insured 

multifamily properties. These practices include energy and water efficiency, use of recycled and 

local materials, improved indoor air quality, and the healthy housing approach developed by HUD’s 

Healthy Homes Initiative. The Green Initiative focuses on immediate repairs, but also requires that 

owners commit to maintain green building principles for the next 30 to 50 years. For further information about the program, see Section E, Moving	to	Green	Building.	

Multifamily Energy Audit Pilot 

A pilot program, the California Multifamily Energy Audit Initiative, was designed to provide energy 

audits and technical assistance to assisted multifamily properties as part of FHA refinancing transactions. The pilot began in June 2006 and was supported through a partnership with Pacific Gas and 

Electric (PG&E), the Sacramento Municipal Utility District (SMUD), Nevada Power, the Local 

Initiatives Support Corporation (LISC), and other energy program providers. The partnership targeted 

FHA transactions involving requests for Section 8 contract renewal and project refinancing, or refinancing requests from sponsors of Section 202 elderly housing and other HUD-assisted properties. 

48

During 2007, 15 energy audits were completed by PG&E, the San Francisco Municipal Utility 

District, and Sierra Pacific. HUD worked with property owners to include energy efficiency measures 

that were identified in the energy audit in project recapitalization plans and/or project replacement 

and maintenance schedules. Participating organizations included Mercy Housing, Christian Church 

Homes, Eden Housing, Satellite Housing, John Stewart Company, National Church Residences, the 

Nevada Rural Housing Authority, and the Maricopa Housing Authority. 

The pilot successfully demonstrated that where energy audits are included at an early stage of 

development, particularly when completed in conjunction with Physical Needs Assessments, substantial energy efficiency improvements can be made in existing housing. The energy audits enabled 

participants to include a wider range of energy improvements in these projects than initially expected 

and provided a means for accessing state energy program resources to offset some of the added costs. 

While the scope of each project varied, each of the participating properties included Energy Star appliances, lighting, and other improvements in its project plans. 

[ACTION 20]


EXPLORE ASSET MANAGEMENT STRATEGIES AND GUIDANCE FOR 

ENERGY EFFICIENCY IN HUD-SUBSIDIZED MULTIFAMILY PROPERTIES. 

Planned Action 

20.1	 The Energy Task Force, with assistance from the Office of Multifamily Housing, will 

explore the development of informational guidelines for both property managers and 

HUD staff implementing energy efficiency improvements. The Office of Multifamily 

Housing will review these guidelines for possible incorporation in a revised Chapter 12 

(Energy Conservation), Multifamily Handbook 4350.1.42 (Action 20.1.) 

Progress To Date 

Asset Management Incentives 

HUD’s Multifamily Task Force (see Action 19) proposed the following energy efficiency incentives 

for existing properties, which were approved for implementation by FHA Commissioner Brian 

Montgomery, as follows: 

•	 Allow for increased owner distribution by increasing the amount of the initial equity by the cost of 

implemented energy upgrades. Increased distributions could be accrued if funds are not available to 

pay the distribution in the current year. 

42 Chapter 12, “Energy Conservation,” of Multifamily Handbook 4350.1, Rev.1, Multifamily	Asset	Management	and	

Project	Servicing. 

49

•	 Allow nonprofit owners a distribution based on energy efficiency. HUD would allow the cost of the 

energy upgrades to increase by the amount of the initial equity of the property, with the appropriate 

distribution percentage applying to the “new” equity position. 

•	 Allow the management company to share in the energy savings, through the use of a Master Plan 

created by the agent and approved by HUD. The shared savings would be achieved through a 

management fee add-on. 

•	 Encourage the use of Energy Star for replacement of lighting and appliances, through normal 

servicing contact with owners and agents. 

•	 Allow the management company to share in the savings for reduction of total utility usage. 

Currently, the additional work involved in energy-efficient upgrade results in a reduction in project 

costs, without the rent being lowered, even if the utility costs decrease. 

•	 Request	DOE	to	delegate	to	HUD	the	authority	to	qualify	residents	for	DOE	weatherization	funds.	

Currently, residents must provide income information to qualify for low-income weatherization, 

even if that information is already on file with the management company. 

•	 Allow	owners	to	pay	for	an	energy	audit	from	surplus	cash	(at	the	owner’s	discretion),	residual	

receipts (with HUD approval), or reserve for replacements (with HUD approval), and encourage 

owners to utilize recognized energy experts to conduct the audit. 

HUD expects to implement these measures by December 2009 (Action 20.2). 

[ACTION 21] 

SUPPORT ENERGY EFFICIENCY TRAINING FOR MULTIFAMILY 

MANAGERS AND MAINTENANCE STAFF. 

This action focuses on providing training or assistance to property managers and owners for incorporating low- and no-cost energy saving techniques into the operation and maintenance of their properties. 

Planned Actions 

21.1	 Subject to available funds, work with multifamily trade organizations to offer, promote, 

or advertise hands-on training on energy-efficient property management practices for 

multifamily building managers and operators. 

21.2	 Help the Energy Task Force and trade associations organize effective training programs. 

With limited sources of funding to support training of this kind, the Energy Task Force 

will explore co-sponsorships or partnerships with trade and other organizations to carry 

out this activity. 

50

Progress To Date 

A four-part series of training webcasts was offered in 2007 (see Action 1) and advertised to multifamily building owners, as well as other HUD partners. A significant share of the 2,500 registrants were 

managers or operators of HUD-assisted housing. The first two training sessions specifically focused 

on multifamily housing. Specialized training for multifamily building operators, in partnership with 

multifamily trade organizations, has not been explored due to lack of available staff or funding resources (Action 21.1). Due to limited funds, no action has been taken on partnerships with trade organizations to carry out this activity (Action 21.2). HUD expects to continue to explore co-sponsorships 

or partnerships with other trade organizations to carry out training activities in FY 2009. 

51

vi. otHer aCtions 

Action Housing—Manufactured Homes 

22 

Action Field Policy and Management 

23 

Action 

24 

Action 

25 

Implement energy efficiency recommendations of the Consensus Committee for HUD-Code (Manufactured) Homes. 

Partner with local energy efficiency groups, HUD program offices, and other agencies to educate HUD customers 

about ways to reduce energy costs. 

Policy Development and Research 

Conduct energy-related policy analysis and research to support Departmental energy efficiency actions. 

Healthy Homes and Lead Hazard Control 

Develop a computerized assessment tool for integrated energy and environmental retrofits. 

[ACTION 22]


IMPLEMENT ENERGY EFFICIENCY RECOMMENDATIONS OF THE 

CONSENSUS COMMITTEE FOR HUD-CODE (MANUFACTURED) HOMES. 

Planned Actions 

22.1	 Issue two proposed rules revising the Manufactured Home Construction and Safety 


Standards that include provisions recommended by the Consensus Committee to 


improve certain energy efficiency aspects of manufactured home construction.


22.2	 To address existing manufactured housing, the Task Force will distribute and publicize 

the availability of the booklet, Manufactured	Homes:	Saving	Money	by	Saving	Energy.	

52

Progress To Date 

Two proposed rules involving a variety of upgrades to the Manufactured Home Construction and 

Safety Standards (the “HUD Code”) have not yet been published (Action 22.1).43 

During 2007, the Manufactured Housing Consensus Committee solicited recommendations from the 

public for additional proposed changes to the HUD Code. In response, several proposals for increasing energy efficiency in manufactured housing were submitted. The more significant proposals would: 

(1) improve the current thermal envelope to insulation levels that match the requirements in the 

International Energy Conservation Code (IECC), (2) adopt the ASHRAE 62.2 standard for ventilation in lieu of the current provisions in the standards, and (3) require all manufactured homes to be 

equipped with Energy Star appliances. Other recommendations would address energy losses in duct 

systems and allow for the use of tankless or instantaneous water heaters in manufactured homes. The 

Consensus Committee has not established a timetable for considering these recommendations. 

Looking ahead, the Energy Independence and Security Act of 2007 (Public Law 110-140) includes a 

provision (Section 413, Energy	Code	Improvements	Applicable	to	Manufactured	Housing) that will 

change the regulatory environment for energy efficiency in manufactured housing. The 2007 Act 

requires that the Department of Energy establish standards within 4 years for energy efficiency in 

manufactured homes based on the most recent version of the International Energy Conservation Code. 

This would represent a significant increase in the current standards. 

The new standards are to be established after consultation with HUD, which may “seek further counsel” from the Manufactured Housing Consensus Committee. The new energy standards are to consider 

43 Proposed Changes to Manufactured Home Construction and Safety Standards (MHCSS) 

Second	Group:	

1. § 3280.505 Air Infiltration has been edited. 

2. § 3280.707(a)(2) would require gas and oil burning comfort heating appliances meet or exceed the National Appliance Energy Conservation Act of 1987. 

3. § 3280.707(d) updates the energy efficiency requirements for water heaters to the National Appliance Energy 

Conservation Act of 1987. 

4. § 3280.714(a)(i) and (ii) propose changes to the energy efficiency requirements for air-conditioners, and heat 

pumps must meet the National Appliance Energy Conservation Act of 1987. 

5. § 3280.715(a)(7) would require R-4 duct insulation for Thermal Zone 1 and 2 and R-8 for Thermal Zone 3. (Note: 

the proposed changes to the MHCSS in Third Group would require R-8 for all ducts exposed to the outside air). 

Third	Group:

1. § 3280.103(a)(3) would require lineal fluorescent fixtures to utilize T-8 lamps or lamps of equal or greater efficiency. 

2. § 3280.508(e) would require U values for glazing to be determined using the values in Table 5 in Chapter 29, the 

1997 ASHRAE Handbook of Fundamentals. 

3. § 3280.715(a)(4)(i) provides air leakage limits for ducts. 

4. § 3280.715(a)(7) would require R-8 for all ducts exposed to the outside air. (Note: the proposed changes to the 

MHCSS in Second Group would require R-4 duct insulation for Thermal Zone 1 and 2 and R-8 for Thermal Zone 3). 

5. § 3280.715(c) increases the requirements for sealing joints in ducts and references UL 181A, Closure Systems for 

Use with Rigid Air Ducts and Connectors. 

53

factory design and construction techniques, be based on climate zones currently in the HUD Code, 

and be cost-effective. 

Under the provisions of the 2007 Act, the Department of Energy will be responsible for establishing 

the regulations for HUD-Code homes, in consultation with HUD. HUD will support DOE with advice 

and information needed to complete their analysis. 

[ACTION 23]


PARTNER WITH LOCAL ENERGY EFFICIENCY GROUPS, HUD PROGRAM 

OFFICES, AND OTHER AGENCIES TO EDUCATE HUD CUSTOMERS 

ABOUT WAYS TO REDUCE ENERGY COSTS. 

HUD’s regional and field offices play a supportive role to HUD’s program offices in leveraging local 

resources; providing information, training, or technical assistance to HUD’s grantees, customers, or 

partners; and collaborating with local communities to adopt energy efficiency measures in HUDsupported buildings. Regional Energy Coordinators in each of the 10 regions have, as a collateral 

duty, the responsibility for coordinating regional efforts and providing support for local field offices. 

Planned Actions 

23.1	 The Office of Field Policy and Management (FPM) will develop local energy 

partnerships that support the energy efficiency objectives and actions of HUD program 

offices. 

23.2	 The Office of Field Policy and Management, in cooperation with program areas and 


other federal and state agencies, will develop regional strategies to educate external 


partners (industry, local governments, and relevant nonprofit agencies) about Energy 


Star and HUD’s Energy Action Plan. 


Progress To Date 

Every HUD region has a designated Regional Energy Coordinator who works with field offices to 

implement local partnerships. Many of HUD’s field offices report extensive capacity building, training, and informational activities. These are aimed at educating HUD customers about opportunities for 

energy efficiency, and, where feasible, leveraging state and local resources for investment in HUDassisted properties. Table D-2 provides a list of partnerships reported by each of HUD’s regional offices. 

54

Table D-2. Partnerships Reported Per Region—FY 2007 

Region FY 2007 Partnerships 

Region 1 216

Region 2 26 

Region 3 21 

Region 4 111 

Region 5 19 

Region 6 62 

Region 7 10 

Region 8 10 

Region 9 45 

Region 10 10 

FY = fiscal year. 

N/A = not available. 

Examples of Local Partnerships 

•	 Los	Angeles,	California. In 2006 a partnership was initiated with a California consultant, Strategic 

Energy Innovations, to provide technical assistance to public housing authorities to address 

barriers that prevent smaller authorities from undertaking energy performance contracts, which 

leverage potential energy savings from existing housing portfolios to obtain financing to capitalize 

energy efficiency improvements. The result of the partnership was the first “aggregated” energy 

performance contract approved in Region 9, which involved the San Bernardino and Upland housing 

authorities. The energy performance contract, approved in 2007, will leverage $18 million, produce 

$2.4 million in annual savings, and provide energy efficiency improvements in over 1,800 units. 

In 2007, the partnership was expanded to include multifamily housing pilot programs designed 

in coordination with HUD’s multifamily office. The pilot programs include the development of a 

model aggregated Energy Performance (Lease Purchase) Agreement involving HUD-assisted and 

Low-Income Housing Tax Credit (LIHTC) properties in Southern California and the creation of 

an Energy Star bulk purchasing cooperative involving multiple multifamily housing properties and 

providers. 

•	 Southern	California. Under the Aggregated	Energy	Performance	Pilot, four housing providers 

(the San Bernardino County, Ventura County, Santa Barbara County, and Orange County 

housing authorities), identified 40 LIHTC and HUD-assisted properties in need of substantial 

energy efficiency upgrades. A financial assessment determined that an aggregated energy 

performance contract could leverage $12 to $15 million in capital investments. HUD is working 

with a consultant, Strategic Energy Innovations, to address issues affecting implementation of a 

performance contract, including: (1) property securitization, (2) resetting of utility consumption 

estimates, and (3) resetting of rents and utility allowances, which reflects adjusted energy savings to 

generate sufficient cash flow to support project financing. 

•	 Cambridge,	Massachusetts. HUD’s New England Regional Director has formed a working 

partnership with the Cambridge Energy Alliance, which includes the City of Cambridge, 

55

Massachusetts, Clean Energy Solutions, and Bostonia Partners. HUD will play an important role 

in the Alliance’s $100 million citywide energy plan. The Boston HUD office has established a 

Coordinated Individual Counseling program that will work with all FHA-insured property owners 

in the city to design a financing mechanism that will allow them to take advantage of the efficiency 

programs being offered through the Cambridge Energy Alliance. 

•	 Louisville,	Kentucky. HUD’s Louisville office worked with the Louisville Metro Housing Authority 

and a number of state, local, and federal agencies to ensure that the Liberty Green HOPE VI 

project meets the Energy Star standard for new homes. All 718 units will be Energy Star-certified. 

EPA, HUD, and the housing authority completed an agreement regarding inspections, architect 

certification, and documentation needed to earn the Energy Star label upon completion of the project. 

Selected Field Office Actions 

One region (Region 9) adopted a regional energy plan, implementing the various actions described 

in HUD’s Energy Action Plan at the state and local level. Another region (Region 4) established a 

regional Energy Task Force with representatives from each field office assigned to coordinate energy 

activities in each local office. The following is a sample of the many partnerships carried out by 

HUD’s 82 field offices in all 10 regions. 

In Region 1 (Boston), the Regional Office has been working with energy companies and lenders to 

design a program to enhance the use of FHA-insured Energy Efficient Mortgages. HUD’s Boston 

office also approved a $9 million Energy Service Agreement with the Lowell Housing Authority and 

Ameresco Inc., and another agreement with the Providence Housing Authority in Rhode Island, in the 

amount of $12 million. The Hartford, Connecticut, field office initiated an energy partnership with a 

group of five small housing authorities (Stratford, East Hartford, Milford, Middletown, and Vernon). 

The Manchester Office of Multifamily Housing helped facilitate the Maine Energy Group, a forum for 

information exchange between HUD, Maine Housing, the USDA, and local housing partners. 

In Region 2 (New York-New Jersey), the Buffalo, New York, Office of Community Planning and 

Development held its annual conference on the theme of “Go Green.” The objective was to discuss 

strategies for pursuing sustainable development through green affordable housing. HUD’s New York 

Regional Office partnered with the city and state on the financing of 1400 Fifth Avenue, the first green 

and smart building in Harlem. (HUD provided a Section 108 Loan Guarantee to finance the 30,000 

square feet of commercial space.) The New York field office is also working with the New York City 

Housing Authority on a comprehensive energy efficiency and green initiative. 

In Region 3 (Philadelphia), the Pittsburgh, Pennsylvania, field office worked with the Housing 

Authority of Pittsburgh and Conservation Consultants, Inc., to host a forum on Energy Star. HUD’s 

Wilmington, Delaware, office worked with the local utility on a Low Income Energy Assistance 

Summit. The Richmond, Virginia, office worked with the City of Blacksburg, a new CDBG grantee, 

and a local nonprofit group, Community Housing Partners Corporation, to develop 14 new energyefficient homes in the Roanoke-Lee district. The Richmond office also hosted two teleconferences to 

familiarize HUD grantees with the Energy Star bulk purchasing tool at www.quantityquotes.com. 

56

In Region 4 (Atlanta), the Louisville, Kentucky, office partnered with the Louisville Metro Housing 

Authority on the Liberty Green HOPE VI project, where all 162 multifamily units are Energy Star 

rated. Through a partnership with the Nashville, Tennessee, office and the Nashville Area Habitat for 

Humanity on 79 Energy Star-certified units, energy consumption was reduced by 42 percent, resulting in 

average monthly bills of under $90 for an 1,100-square-foot home. The Birmingham, Alabama, office 

partnered with the Governor’s office on an Energy Star Change a Light, Change the World Campaign 

lighting retrofit of Spring Gardens, a 220-unit, HUD-assisted housing project for the elderly. 

In Region 5 (Chicago), HUD’s Milwaukee, Wisconsin, office collaborated with the city and the 

Milwaukee Housing Authority on the 120-unit Cherry Court HOPE VI project for seniors and persons 

with disabilities that includes a new 20,000-square-foot green roof and a number of sustainable design 

elements. The Region 5 Energy Coordinator worked with program directors in the Chicago field office 

to conduct Energy Star workshops and training on energy performance contracting for public housing 

authorities. The Chicago office also worked with the Winnebago County Housing Authority on a 104-

unit HOPE VI project that is Energy Star certified and includes Energy Star-rated appliances. 

Region 6 (Fort Worth) played an active role in the Energy Star Change a Light, Change the World 

Campaign. In 2007, the San Antonio, Texas, field office partnered with the San Antonio Housing 

Authority to install 6,000 compact fluorescent lights (CFLs) in one public housing complex, reducing 

electricity consumption by 1.7 million kWh. The New Orleans, Louisiana, field office teamed with the 

local utility (Entergy) and Green Light to distribute 10,000 compact florescent light bulbs to assisted 

projects and lower-income households. The region also hosted an important affordable green housing 

conference in Texas. 

Also in Region 6, the Fort Worth Multifamily HUB assisted in a Mark to Market Energy Conservation 

Outreach Training and Conference to encourage owners to rehabilitate and operate their properties 

using sustainable green building practices. The Oklahoma City Multifamily office is processing a $2.7 

million mortgage for a Mark to Market pilot green project in Lawton, Oklahoma, which includes more 

than $500,000 in green building features. 

In Region 7 (Kansas City), HUD teamed with the Missouri Department of Natural Resources and 

the St. Louis Urban League on a pilot program for the weatherization of a 100-unit elderly project in 

St. Louis. The St. Louis Office of Community Planning and Development contracted with the Meyer 

Company, an independently owned construction company and architect Garen Miller Incorporated, to 

build Patrician Place, a new single-family home development in North St. Louis County, which will 

include green and Energy Star features. 

The Nebraska HUD office partnered with the Omaha Public Power District to form the Omaha Energy 

Efficiency Task Force. The Task Force worked with the Omaha Housing Authority to build Energy 

Star-certified homes in low- to moderate-income areas in and around Omaha, Nebraska. The Task 

Force continues to educate public housing owners and tenants on energy-saving strategies and utility 

payment assistance during severe weather conditions. 

57

In Region 8 (Denver), the Denver office was active in the Energy Star Change a Light, Change the 

World Campaign that included hosting an event recognizing 60 Colorado groups and organizations 

that are Energy Star partners. The Denver Multifamily HUB worked with the Rocky Mountain 

Chapter of the Affordable Housing Management Association (AHMA), and provided an energy training timeslot at the regional AHMA conference held September 2008. The Helena, Montana, office 

formed an energy partnership with the Housing Division of Montana’s Department of Commerce and 

the Montana Board of Housing and participated in several subcommittees of the Governor’s Housing 

Coordinating Team. 

Region 9 (San Francisco) has been a leader in creating successful state and local energy partnerships. 

The California Partnership, which includes public housing authorities throughout Northern California, 

launched a statewide Energy Star Change a Light, Change the World initiative to encourage energy 

saving practices in HUD-assisted and public housing programs. Pacific Gas and Electric provided 

compact fluorescent lights (CFLs) to over 9,000 households at 168 participating HUD-assisted and 

public housing properties, resulting in reduced electricity consumption of an estimated 11.7 million kWh, and estimated cost savings of $1.4 million over the life of the new equipment. In central 

California, the San Joaquin Valley Clean Energy Organization was established to develop a regional 

energy plan, help local jurisdictions develop model ordinances, energy efficiency and green building 

programs, and undertake other efforts to promote clean energy in the valley. 

Another partnership was created with the Center for Smart Building and Community Design at the 

University of Hawaii and Hawaii’s Department of Business, Economic Development, and Tourism. 

The partnership produced a study showing the significant impact lighting has on operating costs 

for multifamily housing. One project was the HUD-assisted Kalani Garden Apartments, a 119-unit 

affordable housing project on Oahu that showed that low-cost lighting changes would reduce annual 

electric energy consumption at the complex by 109,877 kWh and lower annual energy costs by $21,426. 

In Region 10 (Seattle), the Seattle, Washington, office teamed with the Sisters of Providence, the 

EPA, and the Seattle Office of Housing on an Energy Star Change a Light, Change the World 

Campaign retrofit of the Providence Vincent House, a multi-story facility with 61 units. The City of 

Seattle financed several energy efficiency improvements in the building, including replacing refrigerators. The Boise, Idaho, field office partnered with the City’s Housing and Community Development 

Division, Neighborhood Housing Services (NHS), Boise Mayor David Beiter, and other local partners 

to launch an Energy Star Change a Light, Change the World Campaign event; Idaho Power provided a 

total of 160 Energy Star light bulbs in a senior citizens apartment complex. 

58

[ACTION 24]


CONDUCT ENERGY-RELATED POLICY ANALYSIS AND RESEARCH TO 

SUPPORT DEPARTMENTAL ENERGY EFFICIENCY ACTIONS. 

Planned Actions 

24.1	 PD&R will continue to undertake and promote research into energy efficiency 


technologies through the PATH program. PATH research will support the energy 


efficiency needs of affordable housing. 


24.2	 The Partnership for Advancing Technology in Housing (PATH) will sponsor research 

to implement the PATH Roadmap for Energy Efficiency in Existing Homes, including a 

3-year initiative to develop protocols for energy-efficient remodeling of existing homes. 

24.3	 PD&R will conduct a study, through an interagency agreement with the Environmental 

Protection Agency, of opportunities for investing in energy efficiency in assisted 

multifamily housing. 

Progress To Date 

The Office of Policy Development and Research (PD&R), as co-chair of the Energy Task Force, 

has provided significant policy and administrative support for the implementation of HUD’s Energy 

Action Plan. 

PATH Research 

Due to limited funds appropriated by Congress for the Partnership for Advancing Technology (PATH) 

and, more generally, for PD&R research in 2007 and 2008, HUD’s research and development efforts 

in this area have been severely constrained. Nevertheless, several PATH-supported initiatives have 

included energy efficiency or green building components: 

•	 The	PATH	Concept	Home	in	Omaha,	finished	last	summer,	represents	HUD’s	version	of	the	house	

of the future. The home was the first LEED-certified home in Nebraska. The project demonstrated 

that green is achievable, affordable, and marketable. The home included more than 60 innovative 

technologies. The PATH website hosts a virtual tour of the Concept Home, downloadable building 

plans, and specific product information. 

•	 PATH	has	developed	outreach	materials	to	help	builders	rapidly	adopt	green	residential	

construction technologies. A Guide	to	Building	Green was distributed at the International Builders 

Show in Orlando in February 2008. PATH’s Guide to Green Building presented the essential 

components of building a green home: low-impact development (LID), resource and waste 

management, energy-efficient system integration, resource-efficient plumbing, and good indoor air 

quality. The guide was also made available on the PATH website. 

59

•	 Virtually	all	PATH	Field	Evaluations	conducted	by	HUD’s	research	program	have	assessed	one	

or more green components, including water efficiency, energy conservation, waste management, 

indoor air quality, and water recycling. 

•	 PD&R	is	working	with	HUD’s	Office	of	Healthy	Homes	and	Lead	Hazard	Control	(OHHLHC)	to	

examine the performance of a green renovation of a multifamily property in Lawton, Oklahoma. 

That evaluation effort is currently in the planning phase (Action 24.1). 

Uniform Remodeling Protocols 

In response to a key recommendation in the PATH Roadmap 

for Energy Efficiency in Existing 

Homes, HUD completed the 

initial phase of a Uniform 

Remodeling Protocols initiative 

in October 2006. The protocols 

are designed to provide technically sound guidance to remodeling 

contractors on energy-efficient remodeling techniques, from room 

additions to bathroom and kitchen 

remodels and other home remodeling projects. The protocols are intended to enhance the credibility 

of the remodeling industry for homeowners, by providing a reliable set of remodeling guidelines that 

result in energy savings. The protocols were designed at three levels: for the beginner remodeler; the 

intermediate remodeler; and the advanced Home Performance with Energy Star remodeler, who has 

significant expertise in “whole house” energy remodeling. 

Phases II and III of the project, which were to have tested the draft protocols by remodelers, have 

been suspended due to lack of available funds (Action 24.2). 

Energy Efficiency in Multifamily Buildings 

A proposed study of energy efficiency in multifamily buildings was not implemented, due to lack of 

available funds (Action 24.3). 

60

[ACTION 25]


DEVELOP A COMPUTERIZED ASSESSMENT TOOL FOR INTEGRATED 

ENERGY AND ENVIRONMENTAL RETROFITS. 

Planned Actions 

25.1	 The Office of Healthy Homes and Lead Hazard Control (OHHLHC) will fund the 

development of a computerized assessment tool that combines energy efficiency, safety, 

and healthy homes measurements (referred to as the Healthy Homes Energy Efficiency 

Assessment Tool [HEAT]). 

25.2	 OHHLHC will finalize the computerized energy-efficient assessment tool and pilot 


this tool in six residences at two locations (Greensboro, North Carolina, and Boston, 


Massachusetts).


Progress To Date 

A decision to expand the scope and cost of the project resulted in a delay in project implementation. 

A Statement of Work for a procurement action under the 2009 Office of Healthy Homes procurement 

plan will include the development, piloting, and field testing of this tool by a number of weatherization programs in different zones. 

In addition, in support of Action 1, OHHLHC and Demonstration grant programs provide rating 

points for reducing energy costs, to encourage using Energy Star building techniques and appliances 

during health-related housing improvement activities. The NOFAs for those grant programs explicitly 

promote integrating them with energy conservation activities, including weatherization, housing 

rehabilitation, and maintenance. 

61

E. Moving to Green Building


In addition to the energy efficiency measures discussed in the preceding sections of this report, HUD 

is beginning to address a larger green building agenda through a variety of programs. The House 

Committee on Appropriations, in its 2008 Committee Report, strongly urged HUD to expand its efforts in this area, and HUD is building on the work initiated in the area of energy efficiency to address 

other green elements: health and indoor air quality, water conservation, siting and location, choice of 

materials, and renewable energy. 

Green Remodeling Initiative 

HUD initiated a Green Initiative in November 2007 though its Mark to Market program. This voluntary pilot program offers strong financial incentives for private owners to adopt green building practices in both the rehabilitation and operation of their HUD-subsidized, federally insured multifamily 

properties. These include energy and water efficiency, use of recycled and local materials, improved 

indoor air quality, and the healthy housing approach developed by HUD’s Healthy Homes Initiative. 

The Green Initiative focuses on immediate repairs, but also requires that owners commit to maintain 

green building principles for the next 30 to 50 years. 

The incentive for property owners to “go green” is a reduced owner contribution, from 20 percent for 

standard construction to just 3 percent for green construction. In the first 6 months since the Green 

Initiative was introduced last fall, HUD’s Office of Affordable Housing Preservation (OAHP) has 

begun processing more than 500 properties, totaling over 4,000 units. Due diligence begins with the 

same physical assessment of each property required for all Mark to Market program properties. In the 

assessment, professional engineers identify repairs and maintenance needed now and in the future. 

Unique to the Green Initiative, the engineers also identify a green alternative for each line item, and 

then complete a cost-benefit analysis to determine the most cost-efficient recommendation. While the 

scope of repairs is all-inclusive, HUD expects to realize energy and water savings by focusing on: 

sealing the building envelope; increasing insulation; ensuring that heating and cooling systems are 

appropriately sized and are of an energy-efficient design; installing Energy Star appliances during 

replacement; installing Energy Star windows during replacement; using Energy Star compact fluorescent lights (CFLs); installing low-flow faucets, showerheads, and toilets; and installing water and 

energy monitoring equipment. 

The Green Initiative also requires that owners adopt an Integrated Pest Management approach, which 

mitigates the need for pesticides, and requires owners to participate in future indoor air quality tests. 

The Initiative also requires ongoing monitoring of utility use, temperature, and humidity levels. This 

monitoring allows the tracking of savings and improvements, and also provides property management 

with valuable operating information, thus allowing them to address potential problems when they arise. 

62

Indian Housing 

As described above under Action 12, HUD’s Office of Native American Programs has initiated an 

active training program on green building in Indian housing. One national and five regional training 

sessions have been held since December 2007. Topics included: indoor air quality; mold, mildew, and 

moisture problems; insulation; exterior water management; and renewable energy. ONAP encourages 

tribes to utilize the variance provision in PIH Notice 2007-11 to increase Total Development Cost 

(TDC) limits by up to 10 percent to accommodate additional costs associated with the use of energyefficient and/or green materials. In addition, an incentive point is provided for competitive awards for 

the Indian Community Development Block Grant program for projects that meet Energy Star goals. 

Transportation and Location Efficiency 

An increasingly important element of all green buildings is the location efficiency of the property. 

Most green building programs provide additional points for housing that is located at or near transit, 

or provides access to walkable amenities and services. This has become critical in light of the high and 

rising cost of gasoline. What appeared to be a good strategy for finding affordable housing—moving 

to farther-out suburban or exurban locations where land and housing is relatively inexpensive—is 

not proving to be sustainable by many families, especially as gasoline costs exceed $4/gallon. On 

average, Americans spend more than one-half of their incomes (52 percent) on housing and transportation. The average American household spends approximately 18 percent of its annual income on 

transportation—and low-income families spend as much as a third. 

One approach to lowering the combined cost of housing and transportation is to expand housing opportunities adjacent to transit. Transit-oriented development presents unique opportunities for creating 

housing in proximity to public transportation, and to address the zoning, land use and financing issues 

that affordable housing developers typically encounter when developing mixed-use or mixed-income 

housing projects. 

In its Joint Explanatory Statement issued with the FY 2008 Consolidated Appropriations Act, 

Congress tasked FTA and HUD to continue and expand its work in this area. Specifically, the 

Conference directed HUD and FTA to convene an interagency Working Group, and to: 

“...develop a best practices manual which will serve to assist communities as they seek to establish mixed-income transit-oriented development. FTA and HUD should also jointly report 

back to the House and Senate Committees on Appropriations within 6 months of enactment, 

on new ways FTA and HUD can better coordinate transportation and housing programs to 

promote affordable housing near transit.”44 

As directed by Congress, HUD and FTA have created an interagency Working Group, and will be 

submitting a report to Congress on ways that HUD and FTA can better coordinate transportation and 

44 FY 2008 Consolidated Appropriations Act, Pub. L. 110-161, Joint Explanatory Statement. 

63 
housing programs. Among the actions that can be undertaken is to explore the feasibility of locationefficient mortgages, and to assess the application of a transportation-housing index, that addresses the 

combined cost of housing and transportation for working families. 

Office of Healthy Homes and Lead Hazard Control 

OHHLHC, by its mandate, promotes green building practices through its Healthy Homes Program. 

The program awards research and demonstration grants to identify and mitigate health hazards 

and improve indoor environment quality in new and existing low-income housing. Grantees are 

encouraged to conduct interventions that both improve indoor environmental quality and the energy 

efficiency of homes. 

Healthy Homes projects have demonstrated that housing designs and interventions can improve 

energy efficiency while also providing health benefits to residents. In Seattle, Neighborhood House, 

a community-based organization, teamed with the Seattle Housing Authority and local researchers to 

assess the potential health benefits of public housing (built under HUD’s HOPE VI program) that was 

built using green principles and improved ventilation and moisture control. The research demonstrated 

significant improvements in the health of asthmatic children following relocation of their families 

into the new “Breath Easy” homes. An additional grant-funded study of the potential health benefits 

of low-income units following green rehabilitation is ongoing. OHHLHC is coordinating with the 

Centers for Disease Control and Prevention on additional research regarding the health effects of 

green construction techniques. 

Healthy Homes program grantees have also demonstrated the feasibility and value of combining 

assessments and interventions for both weatherization and improvements in indoor environmental 

quality and hazard reduction. 

Public Housing Environmental and Conservation Clearinghouse 

HUD provides information for housing authorities on green building through its ECOwise newsletter 

and its Public Housing Environmental and Conservation Clearinghouse. A new Notice that encourages housing authorities to “go green,” PIH Notice 2008-25, was issued in June of 2008. The Notice 

identifies a variety of green technologies that housing authorities might consider in the operation of 

existing housing, and in the development of new housing. 

HOME Investment Partnerships Program 

The HOME program has developed a new training curriculum for HOME grant recipients on 

energy efficiency and green building, and also issued the first Notice of Funds availability, for green 

construction using HOME funds. Six applications were selected for funding: the cities of Salinas, 

California; Anderson, Indiana; Duluth, Minnesota; Columbus, Ohio; Lincoln, Nebraska; and the Lake 

County Consortium, Illinois. Each award is for $250,000, the maximum amount. The participating 

jurisdictions (PJs) that are being awarded these funds must use them to produce energy-efficient and 

64

environmentally friendly housing units, using design and technology models that can be replicated. 

All units must at a minimum qualify for and receive Energy Star certification by an independent 

Home Energy Rater upon completion. 

In addition to meeting the Energy Star label, the “Greening City Homes” project in Duluth will use 

solar thermal technology to provide at least 50 percent of the project’s domestic hot water needs and 

10 percent of the project’s space heating needs. The Columbus, Ohio, project will include photovoltaic 

panels to generate electricity. The Lincoln, Nebraska, project will incorporate geothermal energy. All 

of the projects will use low-VOC paints and mold prevention techniques, adopt sustainable site design 

practices, and provide instruction and training to residents on sound energy-efficient management 

practices. 

Research and Development 

PD&R has undertaken a number of research studies on green building practices. The Partnership for 

Advancing Technology in Housing (PATH) has demonstrated or supported field evaluations on a 

number of energy-efficient and/or green technologies. In the existing homes arena, the PATH program 

supported the initial development of protocols for energy-efficient green remodeling of existing 

homes. In addition, research into appropriate standards for clean-up of brownfields for affordable 

housing development has been conducted. A forum on this subject was held in June 2008, with 

participation from a wide range of housing and environmental stakeholders. However, these R&D 

activities have been constrained by limited Research and Technology (R&T) funds. 

Greening the Robert C. Weaver Headquarters Building 

HUD is also planning to make its own headquarters building a model energy-efficient and green building. HUD is negotiating an energy performance contract with an energy services company (ESCO) 

that will reduce HUD’s annual energy bill for the Robert C. Weaver Federal Building by $1.3 million. 

The $17 million project will include energy upgrades to the HVAC equipment, energy-efficient lighting throughout, water conservation measures, a rooftop photovoltaic and solar thermal system, a green 

roof, and replacement of all windows with double-glazed windows. 

65

F. Energy Reduction Goals and Incentives

Section 154 of the Energy Policy Act of 2005 requires that HUD’s Energy Strategy include the development of “energy reduction goals and incentives for public housing agencies.” 

Reduction Goals in Public Housing Under Asset Management 

Under the new asset management rule at 24 CFR 1990, beginning in FY 2007, public housing authorities began to report utility consumption data for individual projects45 in an automated system, the 

Subsidy and Grants Information System (SAGIS). Actual consumption data reported for individual 

projects will provide baseline information for each housing authority to monitor the results of their 

energy conservation programs in future years. 

HUD is evaluating a benchmarking approach that will help housing authorities focus their resources 

on those projects and or buildings that are high-energy users. Beginning in FY 2008, HUD will use 

the property consumption data reported under asset management to consider establishing realistic 

energy reduction goals. 

Energy Reduction Goals 

The Energy Task Force has identified possible indicators that would allow for the tracking of actual or 

estimated energy savings for other programs. (See Table F-1.) These measures continue to be explored 

for possible implementation beginning in FY 2009. A Working Group is being established to explore 

the feasibility of these measures, to determine whether there are systems in place (or that can be 

developed): (1) to gather the information needed, (2) that do not impose extensive additional reporting requirements on grantees, and (3) that do not establish additional data collection or monitoring 

requirements on field office or headquarters staff. 

45 For the purpose of asset management, housing authorities are able to group individual properties into Asset 

Management Projects (AMPs). Reporting by housing authorities on utilities will be for AMPs, rather than for 

individual projects. 

66

Table F-1. Possible Energy Performance Measures 

Single-Family Housing 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Performance measure 

Action item 

Tracking indicator 

Data source 

Performance goal 

Through HUD’s four Homeownership Centers, the Federal Housing Administration (FHA) will 

take steps to increase consumer awareness of Energy Efficient Mortgages (EEMs), including 

promoting the use of the EEM with “Streamlined (k)” Program and other single-family loan 

products. 

Feature the EEM as a priority loan product.


FHA will generate quarterly reports documenting the number of both new construction and existing 


property EEMs insured each quarter, broken down by region or state.


Computerized Housing Underwriting Management System.


To be determined. 


Multifamily Housing 

Energy savings achieved in assisted multifamily housing participating in energy 

weatherization pilots. 

Continue HUD-Department of Energy multifamily weatherization partnerships.


Savings will be the estimated annual energy consumption reductions or savings reported for the 


pilot project, as reported by the energy service provider initiating the energy retrofits and/or energy 


audits/assessments conducted before the retrofit.


To be determined.


To be determined.


Energy savings attained in Section 202 or Section 811 housing for elderly and disabled 

persons. 

Encourage the use of Energy Star New Home standards in the design, construction, and 

refinancing of Section 202 and 811 projects. 

Number of grantees that report adopting Energy Star for New Homes (or its equivalent for 

multifamily construction), multiplied by a projected average energy savings associated with Energy 

Star measures undertaken. 

Section 202-811 grant applications. 

To be determined. 

Energy savings attained from projects built to 2003 International Energy Conservation Code 

(IECC) or Energy Star building standards. 

Explore incentives for energy efficiency through FHA Multifamily Insurance Programs.


Number of properties built to 2003 IECC standards or Energy Star compared with 1992 Model 


Energy Code (MEC), multiplied by the number of FHA-insured projects built to a standard that 


meets or exceed the 2003 IECC.


Possible use of Development Application Processing. 


To be determined.


Energy savings based on HUD-assisted housing commitments to adopt Energy Star 

purchasing standards. 

Develop asset management strategies and guidance for energy efficiency in HUD-subsidized 

multifamily properties. 

Number of subsidized multifamily properties that adopt Energy Star as a procurement guideline for 

refrigerators and other appliances, multiplied by estimated savings based on standard equipment 

replacement rates. 

To be determined. 

To be determined. 

Energy Partnerships 

Energy partnerships assisting HUD projects. 

Establish energy partnerships to support HUD’s energy efficiency actions.


Number of HUD projects assisted through energy partnerships. 


Partnership progress reports and case studies.


To be determined.


67

Appendix 1. Energy Task Force Members 

Public Housing 

Richard Santangelo 

John Miller 

Mila Aguda 

Leroy Ferguson 

Policy Development and Research 

Michael Freedberg 

Community Planning and Development 

Robert Groberg 

Joy Bricker 

Housing—Single Family 

Venida Brown 

Kenneth Walker 

Housing—Multifamily 

Robert Iber 

Charles Famuliner 

Office of Healthy Homes and Lead Hazard Control 

Marty Nee 

Emily Williams 

Melissa Fiffer 

Office of Field Policy and Management 

Jim Chaplin 

Regional Energy Coordinators 

Bob Paquin—Region 1 (Boston)


Ed DePaula—Region 2 (New York)


Charles Famuliner—Region 3 (Philadelphia)


Jim Chaplin—Region 4 (Atlanta)


Debbie Wills—Region 5 (Chicago)


Lawrence Doxsey—Region 6 (Fort Worth)


Paul Mohr—Region 7 (Kansas City) 


Steve Eggleston, Lawrence Gallagher—Region 8 (Denver)


Wayne Waite—Region 9 (San Francisco)


Deborah Peavler-Stewart, Kristen Johnson—Region 10 (Seattle)


EPA Liaison 

Brian Ng 

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Appendix 2. Public Housing Benchmarking Tool


69