Graphics of buildings, high-rises, trees and windmills all in green in one line

The National Association of Home Builders’ (NAHB) green building program, the National Green Building Standard (NGBS), is recognized as a consensus-based standard for what constitutes a durable, healthy, and energy-efficient building. Builders, developers, architects, and environmental organizations, among others, have ensured that NGBS is based on practical standards achievable by today’s projects.

Here are VCA Green’s top four most interesting aspects of NGBS builders may find helpful:

1. Affordability and accessibility
A primary benefit of pursuing NGBS over other green rating systems is that the NGBS is designed to be affordable for developers, making it a more accessible option for small businesses and affordable housing projects.

The NGBS also offers a range of certification levels, including bronze, silver, gold, and emerald, making it easier for developers to meet their sustainability goals at a level that suits their budget.

2. Tax incentives
In addition to these benefits, pursuing NGBS certification can also help developers achieve tax incentives. For example, Fannie Mae and Freddie Mac, two of the largest providers of mortgage financing in the United States, offer green financing options for NGBS-certified properties. These financing options provide lower interest rates and higher loan amounts for green buildings, which can make it easier and more affordable for developers to invest in sustainable building practices.

NGBS certification can also help developers access other funding sources, such as the federal Low-Income Housing Tax Credit (LIHTC) program. LIHTC provides tax credits to developers who build affordable housing units. NGBS certification can help developers earn additional points on their LIHTC application, increasing their chances of receiving the tax credits.

3. Rebates for energy efficiency
Additionally, many utility companies offer rebates and incentives for NGBS-certified buildings achieving high levels of energy efficiency, such as those that use renewable energy sources or high-performance building envelopes. The Energy Star rebate, for example, offers financial incentives to builders who achieve NGBS certification and meet Energy Star requirements. The rebate can be used to offset the cost of implementing energy-efficient measures, such as installing high-efficiency HVAC systems or using LED lighting.

Another rebate available through NGBS certification is the Federal Housing Administration (FHA) mortgage insurance premium (MIP) reduction. The FHA offers a reduced MIP rate of 25 basis points for properties that meet NGBS certification, making it more affordable for homeowners to purchase green homes.

4. Focus on affordable housing
Unlike other rating systems that may be cost-prohibitive for low-income housing projects, NGBS offers a separate certification pathway for affordable housing, which has helped to increase the number of green affordable housing units across the United States.

Other green rating systems may be developed by specific organizations or groups, which may not fully represent the needs and priorities of all stakeholders. While several green rating systems are available, NGBS stands out for its affordability and accessibility, focus on performance-based standards, emphasis on health and wellness, and consensus-based approach.

These benefits make the NGBS a compelling option for developers who want to build sustainable, healthy, and affordable buildings. Additionally, pursuing NGBS certification can help buildings qualify for rebates, tax incentives, and other financial benefits, making it a smart choice for developers who want to maximize their return on investment. Contact a VCA Green Principal to discuss your NGBS certification today.

Moe Fakih, Principal

Robyn Vettraino, Principal

Contributing Writer: Aaron Heinrich