Ways to Finance an Office Condo Purchase ?
Recent changes to the US Small Business Administration (SBA) 504 Loan Program now provide some special attention to pursue LEED certification to qualify for an SBA 504 loan.
SBA 504 Loan Program for Office condo purchases
SBA’s 504 program offers loans with low down payments and low, fixed long-term interest rates to borrowers that will benefit the public with job creation and community enhancements.
Can a borrower receive financing on an office condo purchase if they do not meet the job creation criteria set forth by the SBA? Not necessarily. A number of recent changes to the SBA criteria, effective as of January 1, a borrower may be able to navigate around the requirement for job creation by having a LEED certification in place. A simple a 3rd partyLEED assessment and commitment to LEED certificationnow offers all potential borrowers a way to receive an SBA 504 energy loan without having to meet the job creation requirements.
Summary: What is the Green Option? 
The Code of Regulations states that: “if any of the community development or public policy goals (…) is met, then the applicant is eligible even if it does not meet the job creation or job retention requirements provided the CDC meets its required job opportunity average”.
Hidden within the list of community development and public policy goals are three Green Public Policy Goals. A borrower has to stratify one of the two goals set forth by the SBA which are reducing the borrower’s energy consumption by 10%; or generating at least 10% renewable energy within the office condo that they purchase. This can unlock a borrower’s ability for an increased loan amount of up to $5.5 million. This can also reset the borrower’s lending limit for an office condo purchase. It is not as simple as it may seem because to have energy consumption savings, the borrower would have to invest in up front on equipment such as solar panels etc to accommodate the qualification to finance an office condo.
A borrower can also utilize this strategy by showing the “use” of green technologies that are in place that are cutting consumption or generating renewable energy as mentioned in the above paragraph. Several type of commercial real estate that could take advantage of this that have a high energy usage per square foot are a car wash, manufacturing facility or telecom.