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Solar Financing by Fannie Mae means that Fannie Mae is giving additional home value for solar pv installations. A Solar Energy System can be added to either a new construction or an existing home’s mortgage at standard rates, which are lower than other solar financing options. The cost of energy savings is much greater than the cost of the additional mortgage payment making solar energy system a simple solution for energy savings and home investment. 

Fannie Mae HomeStyle Energy Mortgage

Image Credit: Rocky Mountain Institute

The HomeStyle® Energy mortgage loan by Fannie Mae helps lenders offer affordable financing to borrowers seeking to improve the energy efficiency in their homes that reduce utility costs. Improvements include a wide variety of projects – such as adding insulation, energy-efficient windows, water saving devices, and solar panels. Borrowers can finance upgrades when purchasing or refinancing a home. HomeStyle Energy is open to all Fannie Mae lenders and no special approval is needed.

How does it work with Solar?

The Homestyle Energy Mortgage from Fannie Mae allows a homebuyer or mortgage refinancer to add a solar energy system after the mortgage loan has closed. Currently, it is a mid-three percent range fixed rate, which is the lowest cost of capital for solar to date. Up to 15% of the “as completed” home value is used to pay for the cost of a solar system with funds escrowed by the lender. The homeowner then has 180 days after the closing date to have the solar system installed. Requirements include: a home energy report to determine cost-effectiveness of the solar improvement that shows the value of the energy savings is greater than the cost to install, and an “as-completed appraisal” that includes value for the not-yet-completed solar energy system. To estimate the market value of solar, appraisers, realtors homeowners, and lenders may use the free online PV Value tool.

How does the Homestyle Energy Mortgage help homeowners who are thinking about solar?

  •  Instead of leasing solar, homeowners can own solar enabling:
    • 1) monthly savings on utility bills
    • 2) Increased Property Value
  • Homeowners can choose from local solar installation companies that offer competitive installation costs but may not have been able to offer competitive low interest-rate financing arrangements.
  • Homeowners can have the cost of the solar installation included with their mortgage and eliminate the need for financing from the solar installer  – allowing for the decision process of which solar installer to be less about financing options and more about product and installation quality.

For more information on financing options available for both homebuilders and homebuyers who want a solar system on their new home please contact us at info@goodenergysolutions.com

Sources:

http://blog.rmi.org/blog_2016_06_01_fannie_maes_financing_for_solar

https://www.fanniemae.com/singlefamily/homestyle-energy

http://www.fanniemae.com/portal/funding-the-market/hif/2016/energy-efficient-041416.html