Download Maryland: Taking Control Of Its Energy Future

EECBG and SEP Mid-Atlantic Regional Peer Exchange Meeting
Presentation of the
Maryland Home Energy Loan Program
Daniel Bresette
Program Manager
Maryland Energy Administration
March 17, 2011
Context and Background
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From the outset of ARRA, MEA recognized a need for an accessible and
affordable residential financing option for homeowners seeking to improve
the efficiency of their homes
Municipalities and counties in Maryland were in varied stages of
investigating, developing, and implementing property-assessed clean
energy (PACE) programs to leverage ARRA and provide financing to
property-owners
MEA partnered with the Maryland Clean Energy Center, a quasigovernmental organization with a mission focused on “green” growth and
economic development, to facilitate PACE programs across the State in
conjunction with ongoing municipal and county efforts
Unfortunately, following the decisions of the Federal housing regulators, MEA,
MCEC, and involved municipalities and counties abandoned PACE efforts in
mid-2010 and began searching for an alternative program model
Maryland Home Energy Loan Program
Development
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MEA and MCEC enlisted DOE technical assistance for programdevelopment and legal support to identify and analyze post-PACE
financing program model options
The goals for the new program remained the same:
1. Provide a sustainable financing option that will be viable post-ARRA
2. Attain some degree of leverage
3. Achieve efficiency first, but keep open to include renewable installations later
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After several months of deliberations, MEA and MCEC settled on an
unsecured efficiency finance program based on the successful Pennsylvania
Keystone Home Energy Loan Program (HELP) for several reasons
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A track record of lending and efficiency improvements in a neighboring state
At a minimum, the opportunity to structure loans to take advantage of the
emerging secondary market for efficiency loans
An existing Home Performance infrastructure to drive marketing and outreach
Maryland HELP Implementation
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MEA and MCEC decided to launch a “first phase” program by lending
$500,000 of ARRA funding to establish a process, identify issues to
resolve, and solve start-up problems
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Maryland homeowners who clear a creditworthiness review (e.g., a minimum
640 credit score, no bankruptcy in past seven years, 50% debt-to-income ratio)
are eligible to take loans to finance improvements in primary residences only
First-phase loans—from $2,500, up to a maximum of $20,000—cover
efficiency improvements identified in a Home Performance energy assessment
Fixed 6.99% interest rate for up to a 10-year term with no prepayment penalty
Loan repayments will revolve over time, extending the reach of the program
MCEC and its service provider, AFC First, coordinated with MEA and the
Home Performance network to provide two in-person training sessions and
post resources online
MEA launched its Home Performance Rebate program at the same time,
which helped increase exposure of Maryland HELP
Maryland HELP Outlook
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So far MCEC has provided 11 loans for an average of about $8,500 to
Maryland homeowners to improve the energy efficiency of their homes
MCEC is actively engaging, educating, and meeting with utilities, banks,
credit unions, and other potential private-sector partners
MCEC received positive replies from a February RFP to attract sources of
private capital to sustain the program beyond the first phase
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MCEC plans to set aside a portion of its remaining ARRA grant to establish a
loan-loss reserve to provide investors and private-sector partners protection
from defaults
The added security of a loan-loss reserve should justify a reduced cost-ofcapital and therefore lower the interest rate paid by borrowers and mitigate the
need for substantial rate buy-downs
MCEC is also coordinating with Energy Programs Consortium and the
Warehouse for Energy Efficiency Loans (WHEEL) to facilitate the
eventual inclusion of Maryland HELP loans in a secondary-market sale
Visit the Maryland Clean Energy Center online at:
www.mdcleanenergy.org or www.mcecloans.com
For more information, please contact:
Terry Daly
Maryland Clean Energy Center
Loan Program Manager
(301) 738-6285
Daniel Bresette
Maryland Energy Administration
Program Manager
(410) 260-7655
(410) 260-7655 or (800) 72-ENERGY
www.energy.maryland.gov