Multifamily Energy Retrofit Loan Program

1. Complete MERL Program Interest Form.
2. Complete One-on-One Meeting with DEQ Program Staff.
3. Complete Qualified Energy Audit.
4. Complete the MERL Program Application Form.
5. Program Staff Complete Technical Review of Application Documents.
6. Sign and Execute Contract Between Applicant and DEQ.
   • Draft Contract Language - Subject to Change
7. Financial Services Contractor Completes Financial Reviews.
8. Sign and Execute Final Loan Documents.
9. Borrower Submits Project Milestones and Cost Documentation for Reimbursement.
10. DEQ Reviews Reimbursement Requests and Releases Funds. Repeat as needed.
11. Site Visit: Program Staff may conduct site visit to verify project installation.

The MERL Interest Form and one-on-one meeting with DEQ program staff must be completed before moving forward with an energy audit and application.

• MERL Interest Form (.docx)
• MERL Application (.docx)
• MERL Checklist of Required Documents (.docx)

• MERL Audit and Retrofit Requirements (.docx)
• Draft Contract Language - Subject to Change

The current terms for the program are listed below. Please note that availability of loan funds, loan terms, and closing costs are subject to change without notice. Actual closing costs are set during the application review and will be disclosed to the applicant with a loan commitment statement.

• No application fee
• 2026 interest rate: 2 percent, fixed for the term of the loan, 2.055% APR*
• Minimum loan amount: $100,000
• Maximum loan amount: $1,000,000
• Maximum loan term: 15 years or the useful life of the measures, whichever comes first
  • The multifamily affordable housing facility must remain affordable during the loan term.
• $0 down payment; no early-payment penalty
• Closing costs include origination fee of $3,000; and other fees of approximately $200.

*APR based on a $800,000 loan, 2% interest rate, 15-year term, and $3,142 in closing costs.

• A business, public entity, non-profit, or individual that owns or operates an affordable multifamily housing facility.
  • Multifamily means a property with four or more units that are intended for residential use. The units may be attached, detached, semidetached, or row houses.
  • The facility must be designated as, or the occupants must be recipients of at least one of the following:
    • Housing Choice Voucher Program (Section 8)
    • Public Housing
    • Low-Income Housing Tax Credit (LIHTC)
    • HOME Investment Partnerships Program
    • National Housing Trust Fund
    • 50% or more occupants participate in the Low-Income Home Energy Assistance Program
    • 50% or more occupants participate in the Weatherization Assistance Program
    • 50% or more occupants receive SNAP, TANF, or SSI benefits
    • Other programs may qualify upon review

Measures financed through the MERL program must meet specific requirements and must be recommended via a qualifying energy audit. An energy audit must be completed before applying for the MERL program. Please note, if your application results in a loan for a project, audit costs may be rolled into the loan. The costs of an audit that does not result in a project funded by the MERL program are ineligible to be reimbursed by DEQ.

A qualifying energy audit must meet all the following requirements:

• Use the same evaluation criteria as the Home Performance Assessment used in the Energy Star program. This will include a statement certifying that the audit is informed by 1) cost-effectiveness of project energy conservation measures 2) overall cost benefit to the occupant 3) programmatic goals and 4) resolving health.
• Produce BuildingSync compatible reports and gather Audit Template compliant data points, ensuring an ASHRAE Level 2 audit. In Audit Template, use the "EE-RLF Template" and select "Multifamily" project type.
• Compare the energy consumption of the residential building to comparable residential buildings in the same geographic area using the comparison output of the Energy Star Portfolio Manager platform.
• Determine the overall consumption of energy of the facility.
• Identify and recommend lifecycle cost-effective opportunities to reduce the energy consumption of the facility.
  • Estiamte the total energy and cost savings potential for the facility if all recommenced upgrades and retrofits are implemented.
  • The lifecycle cost-effective calculation must include the energy savings over the useful life of the measure compared to the cost of the measure. To be eligible, the savings from the measure must exceed the cost of the measure over the useful life of the measure. The lifecycle cost-effectiveness calculation may include other non-energy related quantifiable factors such as health and indoor air quality, avoided costs from existing operation and maintenance, and savings from interest payments over the life of the loan.
• Identify the period and level of peak energy demand for each building within the facility and the sources of energy consumption that are contributing the most to the period of peak energy demand. 
• Recommend controls and management systems to reduce or redistribute peak energy consumption.
• Audit reports must be signed by a Montana licensed professional engineer or must be signed by a licensed professional engineer pre-approved by DEQ.

Eligible projects must meet all the following requirements:

• Each upgrade or retrofit is recommended in the qualifying energy audit completed for the building or facility.
• Are lifecycle cost-effective.
• Satisfy at least 1 of the criteria in the Home Performance Assessment used in the ENERGY STAR program. Criteria includes:
  • Resolving health and safety issues.
  • Overall cost-benefit to the customer.
• Improve, with respect to the building or facility of the eligible recipient, at least one of the following:
  • The physical comfort of the building or facility occupants.
  • The energy efficiency of the building or facility.
  • The quality of the air in the building or facility.
• Lead to at least one of the following outcomes:
  • Reduce the energy intensity of the building or facility of the eligible recipient.
  • Improve the control and management of energy usage of the building or facility to reduce demand during peak times.
• Appliances and HVAC systems eligible for EnergyStar certification must be EnergyStar certified.
• Each upgrade or retrofit must meet or exceed current Montana Energy Code.

• National Historic Preservation Act (NHPA)
• National Environmental Policy Act (NEPA)
• Build American, Buy American Act (BABA)
  • Projects that are publicly owned are subject to BABA requirements. More information regarding BABA can be found at DOE's Build America, Buy America Act Website.
• Davis-Bacon Act (DBA)
  • All MERL projects are subject to federal Davis-Bacon Act provisions. Loan recipients will be required to utilize LCPTracker to track and ensure compliance with prevailing wage laws, complete required training, and upload payroll into the tracking system. More information regarding DBA can be found at DOE's Davis-Bacon Act Website.
• Asbestos Inspection
  • All MERL projects are required to complete and submit an asbestos inspection by an accredited asbestos inspector. For more information regarding asbestos inspections, please visit DEQ's Asbestos Control Program website.
• Lead Renovation, Repair and Painting (RRP) Rule
  • All MERL projects must comply with EPA's RRP Rule. Anyone paid to perform work that disturbs painted surfaces in facilities built before 1978 must be certified and their employees be trained (either as a certified renovator or on-the-job by a verified renovator) in the use of lead-safe work practices that minimize occupants' exposure to lead hazards. To learn more about the RRP Rule please visit EPA's website.