Finance OptionsFinance Options

• Residential

• Commercial

• Gov’t and NonProfit

Control where yourcustomers get financing

and maintain control over your sale

ResidentialResidential

Option One: Refinance

Only available if there is equity in the home.

Advantages:

• Tax Benefits

• Long Term (30 Years)

• Paid Off On Sale

• Lower Interest Rate

Disadvantages:

• Takes Longer

• Possible No Equity

• Pay More Over Time

• Cost Of Loan

ResidentialResidential

Option Two: Equity Line (2nd Loan)

Only available if there is equity in the home.

Advantages:

• Tax Benefits

• Variable Term

• Paid Off On Sale

Disadvantages:

• Possible No Equity

• Pay More Over Time

• Cost Of Loan

ResidentialResidential

Option Three: Unsecured Loans

Designed to delay full payment until rebates and tax credits are applied

Advantages:

• No Equity Required

• Variable Terms

• “Same as Cash”

• Get Rebates & Pay off

Disadvantages:

• No Tax Advantage

• Short Time Frames

• Cost Of Loan

Fannie MaeFannie Mae

(a) Conventional Mortgages up to $240,000; Secured; 1 to 30 years (adjustable, fixed, or balloon); Market rates for energy efficient mortgages

(b) Residential Energy Efficiency Improvement Loans up to $15,000 unsecured; up to10 years; usually below market rates; for efficiency upgrades; solar water & space heating systems; photovoltaic systems

Freddie MacFreddie Mac

Conventional Mortgages up to $240,000; Secured; First mortgage to 95% loan-to-value; 15, 20, & 30 years (including balloons); Fixed at market rates; variable at prime + 2%

FHAFHA

The FHA allows lenders to add up to 100% of energy efficient improvements to an existing mortgage loan by insuring a loan of up to 5% of a home’s appraised value or $4,000, whichever is greater, not to exceed $8,000.

The mortgage is eligible for an increase of up to 20 percent in the maximum insurable mortgage amount if such an increase is necessary for the installation of solar energy equipment.

FHA Title OneFHA Title One

Up to $25,000 home improvement loan for single-family, $12,000/unit for multi-family.

Five, Ten or Twenty Year terms. No equity required, but must qualify for FHA financing. Loan may be eligible for tax deduction.

AB 811 (CA)AB 811 (CA)

With the 2008 passage of the California AB811 bill, California cities and municipalities can help their citizens finance renewable and energy efficiency projects by issuing a bond to pay for initial installation costs. Repayment is stretched out over the life of the energy generation or conservation addition to the building. And repayment is made through tax rolls.

Commercial FinanceCommercial Finance

• Purchase

• Lease

• PPA

Commercial PurchaseCommercial Purchase

Conventional loan or SBA 504 funding. Customer receives tax credits, rebates, depreciation.

Loan can be based on equity in property or on equipment only, depending on credit and down payment.

SBA 504SBA 504

Borrowers must occupy at least a simple majority (or no less than 51 percent) of the property within the next year to qualify.

Conventional mortgage for 50 percent of the total project costs, government-guaranteed bond for 40 percent, 10% owner equity.

LeaseLease

Generally, the 7 to 10 year terms make it difficult to justify this finance product.

Some leases allow lessee to keep incentives, but in most cases the lessee trades incentives and depreciation for lower lease payments. (Tax Lease)

PPAPPA

PPA Provider owns the system and all incentives and RECs. Customer receives energy based upon a pre-determined schedule.

Requires excellent credit and larger installations, at least 50kW and usually 100kW minimum.

Government/NonprofitsGovernment/Nonprofits

Since most gov’t and nonprofits can’t receive tax and depreciation credits, the PPA or tax lease approach gives the solar equipment owner the full benefit of the tax credits and depreciation allowances. This lowers the equipment owner's costs, and the savings can be passed on to the building owner in the form of lower energy payments.

ResourcesResources

• FHA

• FHA Loan Limits

• RESNET

• Energy Star

• Fannie Mae

• Freddie Mac

Finance PartnersFinance Partners

Finance PartnersFinance Partners

Finance PartnersFinance Partners

Finance PartnersFinance Partners