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This recorded webinar provides an overview of WPN 22-12 relating to the weatherization of multifamily buildings.
U.S. Department of Energy

>>Male: Welcome to our webinar. The focus of this webinar will be the Weatherization Assistance Program's Weatherization Program Notice 22-12, regarding multifamily weatherization. Let's get started.

The weatherization of multifamily buildings is not new to DOE WAP. It is always assisted to meet the purpose and scope of WAP by providing equitable services to persons who are particularly vulnerable. Additionally, it increases WAP production and helps us meet emission reduction goals. However, multifamily weatherization can be challenging due to difference in eligibility requirements, managing the average cost per unit, and properly accounting for leveraged resources. 

For this reason, DOE has provided Weatherization Program Notice 22-12 regarding multifamily weatherization. This was issued in September of 2022 and it supersedes and provides updates to WPN 16-5 and WAP Memo 35. Additional related guidance includes the expansion of client eligibility, WPN 22-5, as well as managing multiple funding streams, or braiding, currently WPN 22-9, and the weatherization of rental units, currently WPN 22-13. 

Before we continue, we should make clear the definition of "multifamily housing." A multifamily dwelling is any residential building containing two or more units. However, these are generally grouped into three primary categories. Residential buildings with 25 or more units or that are more than 3 stories in height are generally referred to as large multifamily buildings. Residential buildings with more than 5 but less than 25 units that are 3 stories or less are generally referred to as small multifamily or low-rise multifamily buildings. Multi-unit buildings with less than five units are called two-to-four-unit buildings. Many of these differences between building types are necessitated by the energy audit process and the intake procedures. It should be noted that all of these, including the two-to-four-unit buildings, are included in the multifamily buildings category when reporting these units to DOE as completions.

WPN 22-12 covers the following topics: prioritization of weatherization work based on the housing type, multifamily building eligibility, property listing available for use in the WAP program, the average cost per unit – or ACPU – in multifamily dwellings, buydowns and leveraging, as well as documentation requirements that relate to multifamily projects. 

The specific purpose and scope of WAP is outlined in 10 CFR 440.1, which makes it clear that the purpose of the Weatherization Assistance Program is to increase the energy efficiency of dwellings owned or occupied by low-income persons. So, this highlights that to meet the purpose of WAP grantees must ensure that weatherization services are provided to low-income persons that live in all types of housing, whether that be single-family, manufactured, or multifamily buildings. Multifamily buildings, including rental housing, offer opportunities for energy efficiency upgrades that are cost-effective and lower operating expenses, maintaining the affordability and creating healthier, more comfortable living environments for our low-income families.

Grantees and subgrantees are reminded that weatherization is designed to take place with a whole-building-as-a-system approach. This means that a single unit within a multi-unit building, while not categorically excluded from being individually weatherized, is certainly a rare instance. Any time a single unit within a multi-unit building is being considered for weatherization without weatherizing the entire building, you should seek additional guidance from your DOE project officer and prior approval before beginning work.

In order to be eligible for WAP funding, one of the following must be true of all multifamily buildings. In two-to-four-unit buildings, at least 50 percent of the residential units must be income-qualified. However, in residential buildings that contain 5 or more dwelling units, at least 66 percent of the residential units must income-qualify. There is a certain type of large multifamily building where only 50 percent of units are required to be income-qualified. This is discussed more in WPN 22-12. But to summarize, certain eligible types of large multifamily buildings are those buildings for which an investment of DOE funds would result in significant energy efficiency improvements because of the upgrades to equipment, energy systems, common space, or the business shell.

Grantees should exercise caution when using flexibility in this area. DOE's key interest is in seeing the investment of DOE funds coupled with leveraged resources, resulting in significant energy savings. If a grantee will take advantage of the flexibility to only qualify 50 percent of a multifamily building, they must include the definition of "significant energy savings" in their annual state plan and be able to articulate how certain large multifamily are designated. Any grantee who is considering using the 50 percent rule for large multifamily should consult with their DOE project officer prior to submitting this request.

Since 2010, DOE has implemented a new rule for the Weatherization Assistance Program. Under that rule, if a public housing, assisted multifamily, or low-income housing tax credit project is identified by the US Department of Housing and Urban Development or the US Department of Agriculture and is included in a list published by DOE, that building meets the income qualifications and may meet other WAP requirements without the need for further evaluation or verification.

Additionally, in 2022 the Department of Energy secretary exercised the option to expand client eligibility by creating a categorical eligibility for families that qualify under a HUD means-tested program. This further reduces the burden on both the families and the agencies providing intake services and allows WAP to qualify any HUD-assisted buildings included in the expansion of client eligibility in the Weatherization Assistance Program WPN 22-5. A list of categorically income-eligible USDA properties is coming soon. While these property listings are provided in DOE in collaboration with HUD and USDA, there are two fundamental elements that grantees should keep in mind. The rule expressly indicates that income-qualified housing may be eligible to receive WAP funds. However, the rule does not require grantees or local WAP service providers to set aside WAP funds for these properties. The grantee and local service provider still retain the authority to set priorities for the use of WAP funds in their service area.

Also, note: Just because a public housing, assisted housing, low-income tax credit, or USDA-subsidized building does not appear on the list, it does not mean they do not qualify. These may still qualify for the WAP, and WAP subgrantees can follow their normal income-eligibility requirements based on information supplied by the property owner. Please refer to WPN 22-5 for additional requirements to document income eligibility for these other buildings. Grantees are encouraged to periodically check the posting of identified buildings. Both HUD and USDA continue to identify additional eligible properties that meet the income eligibility criteria under WAP. As those properties are identified, DOE will update the list and expansion of client eligibility in WPN 22-5.  

Grantees should note that the average cost per unit, or ACPU, applies to multifamily dwellings just the same as it does to single family. In program year '22 the ACPU is $8,009.00 and it increases each program year based on the regulations. This is the average of all eligible units reported for the entire program year, including all housing types. This creates flexibility that allows you to adjust expenditures to the needs of the individual dwelling unit, as long as the average is maintained for the program year. This also allows the Weatherization Program to expend WAP funds on the units that are not necessarily income-qualified but exist in an income-qualified building as a whole. All completed units that receive energy efficiency measures, whether or not they are income-eligible, still should be reported to DOE in their respective multifamily category. 

In multifamily weatherization two terms are common: buydowns and leveraging. Buydowns, which are specific only to multifamily, are addressed in more detail further on. Leveraging, which extends beyond multifamily housing, contains detailed descriptions and approaches outlined in managing multiple funding streams within the Weatherization Assistance Program, currently WPN 22-9.

This WPN provides detailed examples regarding how to utilize building owner buydowns within the WAP program. We will not attempt to cover all of the possible scenarios here; however, it should be noted when owner buydown is applied to a measure whose SIR is less than 1.0, the cumulative SIR of the package as a whole must still meet an SIR of 1.0 or greater. As you can see from these two examples, in one case the cumulative SIR remains above 1.0 and in the other it drops below. Buydown would only be allowed in case one where the replacement windows, though having a measure SIR of less than 1.0, has a cumulative SIR of 1.0 or greater. In this case, owner buydown funds may be used to buy down the replacement windows and bring the measure SIR up to a level which can be funded with DOE money. Grantees should keep in mind that all associated health and safety costs incurred on a dwelling unit are treated outside the SIR when determining cost effectiveness. However, energy-related incidental repair measures, as defined in WPN 19-5, must be included in the cumulative SIR when determining cost effectiveness.

This WPN also clarifies the documentation requirements for multifamily projects. There is some variation depending on whether this project is contained on the list of buildings from HUD or the USDA. As you'll notice, most items are applicable in most cases. However, the income eligibility documentation has some variance, dependent upon whether it's listed or not. You will also note that accrual of benefits to tenants is applicable if the tenants are not billed directly for their energy costs by means of a utility bill but rather their utility costs are included in the price of rent. Additional details relating to each of these documentation items is supplied in WPN 22-12 and its related FAQ document. The FAQ document also contains answers to many common questions regarding multifamily energy audits, eligibility, and program administration. 

DOE recognizes the value and benefit of weatherizing multifamily buildings and commends the Weatherization Assistance Program network on the tremendous strides it has made in the last few years to address this housing stock on a national basis. And DOE aims to continue to support the WAP network in developing additional tools, supporting the diverse skill sets necessary, and assisting in managing the time considerations required from this type of weatherization work. 

Additional support to facilitate the further weatherization of multifamily building is provided by means of the website. If you have specific questions, please direct those to your DOE WAP technical project officer. 

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