In this brief, we highlight learnings from the Solar and Energy Loan Fund’s (SELF) SAGE Homes program, which shows how CDFIs and green banks can support developers with flexible financing and mentorship to bring affordable, green, and climate-resilient housing to their communities.

WHY THIS MATTERS

The United States’ housing supply is being reduced by wildfires, hurricanes, and flooding which damage and destroy homes as increasingly extreme temperatures threaten energy affordability. Lenders—including Community Development Financial Institutions (CDFIs) and green banks—have a critical role to play in helping housing developers access the financing and guidance they need to build affordable, energy-efficient, and resilient multifamily and single-family housing that is resistant to these threats.

SELF is a first mover in green housing finance deploying flexible lending products and building green developer capacities, demonstrating how CDFIs and green banks can advance green and climate-resilient affordable housing in communities.

WHAT WE FOUND

Through interviews with SELF and one of its SAGE developers, we offer lessons to affordable housing financers, including CDFIs and green banks, as they prepare to deploy Greenhouse Gas Reduction Fund funding:

• Flexible loans, small and large, help unstick deals and unlock additional funding for the construction of more affordable units.
• Mentorship and technical assistance can help overcome misconceptions about building climate-resilient and affordable housing and may ease tensions between goals.
• Experience-based training and mentorship models strengthen the capacity of new developers.

We conclude with reflections on these lessons and provide recommendations for policymakers interested in supporting the financing and development of affordable, green, and climate-resilient housing.