Second Angel Bancorp Announces Green Lending Program
Second Angel Bancorp (SAB), a private money lender in Sacramento, CA, has announced a Green Lending Program. SAB will be providing special incentives to borrowers whose real estate projects meet “smart” and “green” building standards.
Green Lending Practices include projects that use energy efficient, environmentally friendly, renewable, reusable and green processes and materials. “We place a higher priority on loans for projects that support the environment,” said Richard Zahm, an SAB principal.
SAB’s goal is to encourage developers and investors to start green building projects by offering financial incentives. These incentives include lending more money at a lower cost, underwriting to higher loan-to-value ratios, lower interest rates and lower origination fees.
Loan incentives take several forms, including:
- Lower costs of credit, with savings incurred reallocated to pre-established green initiatives within a project.
- Preferential treatment of green projects.
Second Angel will provide a 1/8 to 1/4 percent discount on loans to green projects in the commercial and multi-unit residential sectors. “This could mean significant savings over the life of the loan. For example, for a $5 million loan, this could translate to $60,000 to $120,000 of savings over a ten-year period,” said Zahm.
SAB will rely on criteria established by the U.S. Green Building Council, a nonprofit group founded in 1993, as well as standards developed in the US, Europe and Asia.
“It makes sense for the environment, and for our investors,” said David Gruebele, also an SAB principal. “Technology and price points have intersected. Payback periods for smart buildings are short enough to justify our programs – and the benefits can last for the life of the structure.” He adds: “Borrowers who are savvy enough to go green now are, we believe, better risks over the long run. So, we can justify lower rates.”
Second Angel Bancorp is a private mortgage bank and direct lender, providing residential and commercial funding. Second Angel Bancorp manages Second Angel Commercial Mortgage Fund l, LLC, a $50 million closed-end mortgage fund that lends money to builders, developers, business and homeowners for short periods of time. The loans are secured with first and second trust deeds on real estate they own. The company is headquartered in Fair Oaks, California.