Collaborating to Enhance Affordable Housing Deal Terms
A Q&A with Paul Stanley, Executive Director, Sustainable Finance & Advisory for Wells Fargo Corporate & Investment Banking; Pam West, Portfolio Manager, Impact Investing for Nuveen Real Estate; and Amber Knee, Social Impact Director, Real Estate, for Nuveen.
Paul Stanley
Pam West
Amber Knee
Can you tell us about how your firms are partnering to enhance deal terms in the affordable housing space?
In late 2024, Wells Fargo structured the first of its kind, both social- and sustainability-linked subscription credit facility for Nuveen’s U.S. Affordable Housing Strategy. The three impact-oriented key performance indicators (KPIs) within the facility align with the strategy’s investment objectives to preserve affordable housing, offer impactful resident services, and prioritize sustainability and resident health. If all three annual KPIs are achieved, the structure provides up to 7.5 basis points of savings on drawn capital.
How are you using the Multifamily Impact Framework to accomplish this?
Until recently, real estate market participants have focused sustainable financing almost exclusively on either social attributes, such as resident AMI, or on environmental attributes, such as energy efficiency and green building certification. The strategy’s investment objectives go above and beyond these standard KPIs to include enhanced KPIs closely aligned with multiple Multifamily Impact Framework™ principles. The Framework provides credibility to the KPIs chosen for the sustainable finance facility, and further highlights that the platform uses industry-standard benchmarking to measure impact.
What are the steps multifamily stakeholders can take to leverage sustainable finance to preserve and grow affordable housing?
When discussing potential financing with their banks, it is helpful if multifamily stakeholders can clearly communicate the anticipated social and environment attributes of a particular project or portfolio, using the Multifamily Impact Framework as a reference point and guiding star. A banking partner can then help determine if it might be feasible to offer a sustainability-linked solution, such as the one provided to the strategy, or a use of proceeds solution, which provides transparency to investors or lenders into how funding is being spent across environmental and social categories and the impact of those expenditures.
Anything else to add?
As a long-standing affordable housing lender and founding member of the Multifamily Impact Council with a dedicated sustainable finance team within its CRE business, Wells Fargo would be pleased to discuss sustainable financing considerations with multifamily stakeholders as part of upcoming financings. Nuveen, also an MIC founding member, welcomes the use of this case study to help drive solutions within the affordable housing space.