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GMAC Mortgage Offers Financing for Solar
Are you thinking about energy-efficient options you'd like to include with your new home? Trying to decide what to exclude in order to afford solar components? Considering putting some PVs on your roof? How do you plan to finance the modifications? Until recently, many consumers had to use their savings, credit Cards, or high interest home equity loans to finance energy-efficient improvements or solar electric systems. There is a better option. Through GMAC Mortgage Corporation, a Pennsylvania based full service mortgage lender, consumers can now finance solar installations or energy-efficient features with their first mortgage or home equity loan GMAC Mortgage is an indirect wholly-owned subsidiary of General Motors Acceptance Corporation. It is one of the nation's leading mortgage bankers. It services mortgage loans for more than 1.5 million customers and has more than 280 offices nationwide. GMAC Mortgage closed more than $777 million in energy-efficient residential loans last year. PV FinancingGMAC Mortgage now finances PV and other renewable energy systems, passive solar design, and other energy-efficient improvements that consumers may want to add to their homes. Systems are not financed alone, but as part of a home mortgage. Gale Prososki-Marsland of SolarBuilt in Tucson, Arizona is excited about the new programs. GMAC Mortgage has offered her company a builder's line of credit to construct solar homes in Civano, formerly the Tucson Solar Village. Civano is a model sustainable community on the southeast side of Tucson. It will incorporate passive and active solar, water conservation, pedestrian-friendly layout, waste reduction goals, and the use of "green" building materials. SolarBuilt has several clients who are financing PV systems with GMAC Mortgage in southeastern Arizona. "This is a big step forward for the solar industry" Gale said. "We need mainstream financing. I'd like to see it be like buying a car -- financing is easy and you can almost buy on impulse." Scott Sklar, Executive Director of the Solar Energy Industries Association (SEIA) is also very upbeat about the new program. "This is the first time a nationally recognized mortgage company has selected PV as a part of an energy-efficient mortgage program. This will accelerate lending for PV as no other lender has ever done. GMAC Mortgage is publicizing this new lending effort with literature, press releases, and advertising. They're saying, "we're here for you if you want to add a PV system to your home financing. This can be nothing but good for the industry." Sklar says that perhaps the most exciting project that GMAC Mortgage has been involved in is right downtown Philadelphia. Don Bradley, a local solar builder, is building eighteen townhouses using PV, passive solar design, and solar hot water systems. These are being built specifically for low to middle income families. The GMAC Mortgage financing is making solar affordable. "This project has generated lots of phone calls to SEIA," Sklar said. "People now think it's a real possibility for their own homes and communities." Lower Energy Bills - More Buying PowerSpecial underwriting consideration is given to borrowers with energy-efficient homes or homes undergoing energy related improvements. When energy efficiency is included in a home design, higher monthly housing expense and debt payment ratios can be justified because of the potential for lower monthly energy expenses. To show how lower energy bills mean more income for a mortgage, let's look at an example, Assume that a borrower qualifies for a mortgage of $90,000, We'll assume a mortgage rate of 7,5 percent for a term of 30 years. Under standard guidelines, based on our borrower's income of $2,500 per month, the maximum monthly payment accepted would be $700 per month. (The principle and interest payment would be $630, leaving $70 per month for real estate taxes and insurance.) An energy-efficient home can increase the borrower's maximum allowable payment to $750 per month, The borrower has the added buying power of $7,150, or 6,5 percent, for a mortgage of $96,500. As far as solar goes, let's assume the home is new construction, and solar components are added during construction. The home energy rating may boost the monthly savings figure even further. For example, if the energy savings were $100 per month, the maximum allowable payment would be $800. The borrower has added buying power of $14,353, or 13.75 percent, for a mortgage to $104,400. In many cases, this increase will be enough to add the solar system the buyer desires. What Qualifies as Energy-Efficient?GMAC. Mortgage offers new features to an industry-recognized program known as Energy-Efficient Mortgage (EEM). Designed for new homes, it includes solar energy improvements integrated into the construction of the home. The quantifiable savings due solar energy improvements can be deducted from the monthly principal, interest, taxes, and insurance when borrowers are considered for loan qualification. An EEM includes homes with passive or active solar design or energy-efficient upgrades. Typically, the home must contain one or more features from each of the following three categories to receive a "high" energy rating:
Helping a Nationwide InitiativeIn 1997, the White House announced a Million Solar Roofs Initiative, calling for installation of solar energy systems on one million roofs by the year 2010. At that time, GMAC Mortgage committed to be a major part of this partnership between the government and the solar industry. Since then, an agreement has been signed by GMAC Mortgage and the Solar Energy Industries Association (SEIA), a national industry organization for U.S. commercial enterprises involved in solar energy. GMAC Mortgage is committed to making mortgage loan products and related financial services available to eligible consumers who are working with builders and solar professionals on new or existing homes. Recently, relationships have been forged with other solar industry organizations in an effort to increase public awareness of available loan products and services. Throughout the country, GMAC Mortgage is looking to build partnerships with utility providers, manufacturers, distributors, builders, and communities that want to decrease their burden on the environment. AccessMary Ann Daly, GMAC Mortgage Corporation, 100 Witmar Road, Horsham, PA 19044 $ 215-682-4558 www.gmacmortgage.com Solar Energy Industries Association, Scott Sklar, Executive Director, 122 C Street NW', 4th floor, Washington, DC 20001 Phone: 202-383-2600; Fax: 202,383-2670 ebaker@seia.org; www.seia.org SolarBuilt, Gale Prososki-Marsland, 7101 W. Sweetwater Dr., Tucson, AZ 85754 Phone/Fax: 520-743-2002, prosun@azstarnet.com Bradley Builders & Developers, Inc., Don Bradley, PO Box 2!4, Temple, PA 19560 $ 215-454-4780 Fax: 215.464-4245 $ solarstr@bellatlantic.net |
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