The Mass Solar Loan program is nearing full utilization of the program funding (tracked here). This communication announces a programmatic transition that steps down loan support for moderate income qualified customers, while providing $5 million in additional funding to continue offering loan support for low income qualified customers. Details on the timeline of this transition and new program structure are provided below.
The new program structure will take effect for all loans closed on or after September 13, 2019.
Loan support under the current program structure is available for all projects that close on a program loan through September 12, 2019.
Note: Technical application approval alone does not reserve funding. If your customer would like to receive funding under the current structure, please take the appropriate steps with your customers to ensure they apply for the loan and schedule a closing prior to the transition.
The previous Moderate Income Category (between 80% – 120% of State Median Income) will now be considered Non-Income Qualified. Therefore, two income categories are available, as detailed below:
Non-Income Qualified Customers (greater than 80% of State Median Income) – will not be eligible for any loan support incentives (IRBD, IBLS, and Loan Loss Reserve), however they will still be able to take advantage of technical project approval and program structure to seek market rate loans from a participating lender. Standard loan requirements and program oversight such as the interest rate and closing cost caps will still be applicable for non-income qualified customers.
Low Income Customers (80% or below of State Median Income) – for customers in this category, the incentives will remain unchanged from the current program structure. Low income customers will be eligible for Income Based Loan Support corresponding to 30% of the loan amount, capped at $10,500, and will be able to qualify for Loan Loss Reserve if eligible. Low income customers will be eligible for a 1.5% Interest Rate Buy Down (the current IRBD rate).
Please ensure that customers are aware of this upcoming transition and are able to take the appropriate steps to close a loan under the current structure if desired. Keep in mind the time required to receive technical application approval and income verification if applicable, which is required prior to closing a program loan and reserving funding.
Please also ensure that websites, marketing materials, and brochures are updated to reflect these program changes and that sales staff can accurately explain this transition.
This new structure will be reflected formally in an updated Program Manual and other documents.
The maximum gross interest rate under the program is tied to the Wall Street Journal Prime + 2.75%. On August 1, 2019 the Fed decreased the Prime rate to 5.25%, therefore the maximum gross rate (market rate) under the program is now 8.0%. For low-income qualified customers (80% or below of State Median Income), this will mean a maximum customer rate of 6.5% with the Interest Rate Buy Down. Many participating lenders have competitive/lower rates, but please be sure all materials are updated to reflect the new cap.
We appreciate your continued support and participation in the Mass Solar Loan program. Should you have any questions about these changes or if you have any further feedback on the Mass Solar Loan program, please feel free to contact the Mass Solar Loan team at [email protected].