Last week, HUD sent to Congress its plan to implement a demonstration program for energy and water conservation improvements in certain HUD properties. The pilot program, enacted in December, 2015, as part of the “Fixing American’s Surface Transportation Act” (FAST), allows HUD to create a pay-for-success demonstration program for up to 20,000 HUD subsidized properties. The program will enable HUD to enter into performance-based agreements with intermediaries, which then raise private capital from investors to fund energy and water upgrades in HUD-assisted properties. Investors are paid back when certain cost savings are realized.
HUD notes in its implementation plan that it is in the process of designing this new pay-for-success pilot program and reviewing relevant literature and best practices, as well as gathering lessons learned from similar pay-for-success and energy efficiency programs administered by HUD and other federal agencies. HUD will work to develop and publish by the end of the year a Notice of Funding Availability (NOFA) and application materials to competitively select intermediaries to administer the program.
HUD’s implementation plan can be found at: http://1.usa.gov/1QctSzn