"The Status, Options & Opportunities in Lending for Energy Efficiency in Colorado"
Stephen Ponce-Pore is the Energy Programs Manager for the Bank of Colorado
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Colorado Energy Finance Summit-Stephen Ponce Pore
1. Lending Opportunities in Colorado
Energy Efficiency
Stephen Ponce-Pore â Bank of Colorado
Slide 18
2. Colorado Retrofit Working Group
Energy Efficiency
Finance Summit 2010
Stephen Ponce-Pore, M.S.
Energy Programs Manager
Bank of Colorado
(970) 231-4024
www.ColoradoEnergyStarMortgage.com
3. Energy Concerns Are Diverse
Community and Environment
⢠International conflicts, geopolitical unrest, injustice.
⢠Environmental Impacts / Global Climate Change
⢠Homeland security
⢠Cost to import oil- $350,000,000,000.00 a year!
http://www.eia.doe.gov/energyexplained/index.cfm
Personal Finances Comfort and Health
⢠Affordability ⢠Too Hot/Cold
⢠Opportunity Cost ⢠Air Quality
⢠Return on Investment ⢠Property Value
4. Those who want to lessen the impact of their
homes, reduce energy use, or improve efficiency
currently faceâŚ.
Three Financial Challenges
1. Upfront cost â too high
2. Monthly payments â too high
3. Canât qualify for financing
$?$?$?$?$?$?$?
5. What conventional financing options exist
for a customer that needs to borrow for an
Energy Efficient Retrofit???
1. Unsecured Funds (Credit Cards)
2. Second Mortgage/HELOC
3. First Mortgage Refinance
6. Conventional Financing Methods
Credit Second First
Card Mortgage Mortgage
Amount $10,000.00 $10,000.00 $10,000.00
Rate 14.00 % 7.00 % 4.50 %
Max Loan ? 80% LTV 100+
Term 72 360 360
Payment $206.06 $66.53 $50.67
Utility Bill Start $150.00 $150.00 $150.00
Utility Bill % Savings 30% 30% 30%
Utility Bill $ Savings $ 45.00 $ 45.00 $ 45.00
Net Savings $ (161.06) $ (21.53) $ (5.67)
7. We knowâŚ
48% of US energy consumption
is in buildings US Energy Information Administration
38% is the average amount of equity in an
American home. http://pragcap.com/home-equity-stunner
The average interest rate of homes in the
U.S. is over 6.00%. www.Efammiemae.com
Mortgage Rates are at 40 year lows.
www.Mortgage-x.com/history
8. How can home equity and existing
residential mortgage rates be
used to offer an energy
solution�
âŚoffer a discounted mortgage loan
to homeowners that invest in energy
efficiency and renewable energy for
their homes.
9. The Colorado
ENERGY STARÂŽ Mortgage
Use the ESM to:
ď Purchase a new ENERGY STAR home
ď Refinance and Retrofit for Energy Efficiency
ď Purchase and Retrofit for Energy Efficiency
Loan Types:
Conventional, FHA, VA, Bank, and Jumbo
⢠Matching funds provided by the Governorâs Energy Office
10. How ESM worksâŚ
⢠The payment on $200,000.00 mortgaged at 5.00% for 30 years, is $1,073.00.
The ESM provides 1% ($2,000.00) to buy down the rate to 4.75%, for a
mortgage payment of just $1,043.00. Saving $30.00/ month.
⢠If the utility bill on the residence was $130.00 per month and the energy
improvements reduced the bill by 30% it saves $39.00 per month.
⢠The combined savings of 69.00 per month at 4.75% for 30 years can
finance improvements to the residence of:
$13,294.00
6.6% increase in purchase capacity!
Without increasing the homeownerâs
monthly bills!
11. Advantages of ESM
Costs
ďŽ Nothing down
ďŽ Nothing a month
ďŽ Nothing in the long run
Availability
âIf you can afford a mortgage, you can afford an
ENERGY STAR Mortgage.â
12. Soâ does the ESM addressâŚ
1. Upfront cost â NONE
2. Monthly payments â LOWER
3. Canât qualify for financing â
If you can qualify for a mortgage you can qualify
for an ESM.
âŚYES!
13. Challenges ahead
⢠Continuity of Funding â currently
ARRA/GEO funded
⢠Promotion and Public Outreach â
best kept secret with little marketing budget
⢠Speed to Market â
current interest rates may not last
⢠Lender Education and Participation -
learning curve for lenders
14. Ideas? Comments? Questions?
Bank of Colorado or
Colorado ENERGY STAR Mortgage
Stephen Ponce-Pore
(970) 231-4024
Stephen.poncepore@bankofcolorado.com
www.ColoradoEnergyStarMortgage.com