Got Solar? Purchasing a Home with a Solar Loan or Lease

Solar leases and solar loans are becoming more prevalent, especially here in Southern California. Certain lending requirements are important to know if you require funding to purchase a home with a solar loan or lease.
Solar Loans
A solar loan is a lien against the property. It needs to be paid off or subordinated to the new mortgage loan before closing. If it is subordinated, the interest rate may be higher since it is included in the combined loan to value.
Solar Leases
A solar lease has two items:
  • A UCC Financing Statement
  • A Solar Contract
Both of these must be lifted (removed) or subordinated. We will need to know the home's solar company's specific requirements as they are all different. Escrow is in charge of requesting the documents needed.
A Power Purchase Agreement is also a Solar Lease
The payment under a Power Purchase Agreement that is solely calculated based on the amount of energy produced does not need to be considered a debt to the borrower on a FNMA loan. Like a solar lease, it has the same requirements. Its two items, the UCC Financing Statement and the Solar Contract, must be lifted (removed) or subordinated. We will need to know the home's solar company's specific requirements as they are all different. Escrow is in charge of requesting the documents needed.
 
It is important to note that solar companies have different documentation lists required to subordinate, charge fees to complete, and take as long as two to three weeks for approval.
 
San Diego Funding and Great Pacific Funding are here to keep you updated on the latest financing guidelines to ensure you are supported with everything you need for success!

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