U.S. Department of Energy Energy Efficiency and Renewable Energy

Sample Lending Program in Washington State

The tables below present basic information about the Community Energy Challenge Loan program in Washington State. For information on other programs, see sample state and local lending programs.

BASIC PROGRAM INFORMATION 
Program Name, Location, and Geographic Scope:Community Energy Challenge Loan Program, State of Washington:
The City of Bellingham, Whatcom County, and the City of Ferndale(coordinating on behalf of all 6 smaller cities)
Sustainable Connections is responsible for program design/administration and commercial loans.
Opportunity Council is a one-stop-shop for residential loans.
Launch Date: 
Web Site URLs:Sustainable Connections
Opportunity Council
Target Market:Residential and Commercial
Particular Income or Credit Target:Financing is subject to meeting qualification standards of Banner Bank and the Community Energy Challenge loan program.
Actual interest rates vary depending on loan size and borrower’s credit. Loan program rates are subject to change.
Brief Description of Program:The City of Bellingham, Whatcom County, and the City of Ferndale (coordinating on behalf of all 6 smaller cities) are providing resources from federal Energy Efficiency and Conservation Block Grants (EECBGs) for residential loan loss reserves— making retrofit financing more attractive—as well as marketing support and communications. The City of Bellingham is providing resources from the State Energy Program for loan loss reserves. Bellingham and Whatcom County have active resource conservation management programs and are also coordinating with the Community Energy Challenge.
Financing Capital Source:Leverage Capital Source – Private, Banner Bank
LRF and IRB Capital Source – ARRA Funds
CREDIT ENHANCEMENTS>PARTNERS>SECURITY>REPAYMENT STRUCTURE>MAJOR LOAN FEATURES
Credit Enhancements (if applicable):Loan Loss Reserve Fund (LRF): $750,000
LRF Percentage: 10% decreasing to 7.5% based upon portfolio performance
IRB Fund: $500,000
Source of Capital for Credit Enhancement:EECBG Program and State Energy Program funding
Custodian of Credit Enhancement:Banner Bank
Interest Rate Buydown: 
Structure of Interest Rate Buydown (if Applicable): 
Method of Selecting Participating Lenders:Request for proposal (RFP) process used to procure the financial institution partner crucial to securing favorable loan and leverage terms
Security:Unsecured
Disconnection Threat for Nonpayment:None
Repayment:Banner Bank
 

See charts at the end

  1. Debt-To-Income – 45%
  2. Income Threshold – None
Origination/Servicing:Banner Bank
LOANS SALE BUILT IN TO PROGRAM 
Are Loans Held to Maturity? 
If Loans are Sold prior to Maturity, Please Describe: 
CONTRACTOR PROGRAM 
Are Energy Evaluations Required: 
Contractor Program:

The Community Energy Challenge (CEC) supports the growing workforce of energy efficiency contractors by providing educational resources and training opportunities through the Opportunity Council/Building Performance Center.

The program also eliminates the resources contractors spend on finding customers by coordinating projects and providing direct leads after a home energy assessment has been completed. (All projects receiving CEC incentives and loan opportunities must begin with a CEC home energy assessment.)

Notable: 
Challenges: 
Residential
Project CostsFeesInterest RatesAPRLoan TermMonthly Payments
$3-5,000$130-1504.25% to 5.25%5.47% for best credit on $5,000 loan60 months$95.43
$5,000-10,000$150-2004.25% to 5.25%4.68% for best credit on $10,000 loan at 120 months60-120 months$104.49
$10,001-20,000$200-3005.25% to 6.25%5.50% for best credit on $20,000 loan at 180 months120-180 months$176.69
Interest Rates include 2% IRB for 4.8% of loan buy-down fee and 0.5% discounts for auto-pay from Banner Bank account.
Commercial
Project CostLoan TermFixed Interest RateFeesMonthly Payment
$5,00060 months4.50% to 6.00%$150$96.01 to $99.56
$10,00060 months4.50% to 6.00%$200$190.16 to $197.19
$50,00060 months4.50% to 6.00%$600$943.34 to $978.24
Interest Rates include 2% IRB for 4.8% of loan buy-down fee and 0.5% discounts for auto-pay from Banner Bank account.