A new, ecologically minded protocol aims to provide owners and lenders of affordable housing guidance in underwriting the retrofitting of these properties as well as help in the selection of appropriate energy- and water-saving measures.

Developed by Enterprise Community Partners, a Columbia, Md.-based affordable housing nonprofit, the new protocol provides a complete evaluation of the physical and capital needs of an affordable housing project so that it can be easily underwritten. The process will incorporate energy and water audits and air-quality testing as components of a broader capital needs assessment (CNA), and allow for cost-projection benefits.

Currently, most retrofit analyses fall short of underwriting requirements because they rely on audits conducted using inconsistent metrics and incomplete energy-conservation and cost-saving models, according to a press release.

“If we want to make progress toward greener, healthier multifamily housing, we have to retrofit properties, incrementally, over time,” said David Smith, CEO of CAS Financial Advisory Services, the Boston-based financial services company that helped to develop the protocol. “But owners and lenders are reluctant to make retrofit decisions without consistent, well-grounded financial underwriting. Now, they have it.”

In addition to financial considerations, the protocol requires examination of the health implications to residents and building maintenance workers, as well as a determination of the property’s impact on the environment. The system’s methodology can be applied nationally, resulting in more consistent comparisons.

During the next several months, Enterprise will be collecting feedback on the protocol with the expectation of publishing a review in late 2010.

Click here for more information regarding the Audit Protocol.