The $40 million Enterprise California Green Communities Fund will help finance 500 affordable energy-efficient homes in Los Angeles, Oakland, and San Francisco through the syndication of federal low-income housing tax credit (LIHTC) equity, according to fund creator Enterprise Community Investment.

“The Enterprise California Green Communities Fund is … financing with a nod to sustainability,” said Rich Gross, vice president of California Initiatives, Enterprise Community Partners, in a statement. “We anticipate launching more financing tools like this in the near future.”

To ensure sustainability and utility savings, each development will utilize the Enterprise Green Communities criteria, the only national standard for green affordable housing, according to Enterprise. The criteria requires building in such features as rooftop solar photovoltaic systems, hydronic space heating, Energy Star-rated appliances, and other environmentally responsible technologies to dramatically reduce utility costs for residents and the environmental impact of the development.

Since 2004, Enterprise has helped create more than 1,600 energy-efficient homes in California, and has invested more than $915 million in tax credit equity and loans to create nearly 10,000 affordable and market-rate single-family homes across the state.

The investors in the Enterprise Green Communities Fund are U.S. Bancorp Community Development Corp., Wells Fargo, Merrill Lynch Community Development Corp., and MetLife.