Developing Local Energy Efficiency
Lending Programs
Presented to the EARN Conference 2011
Localizing Finance Panel
Milwaukee, Wisconsin
September 14, 2011
Keith Welks
Deputy Treasurer
Pennsylvania Treasury Department
Public/Private Partnership Leveraging Public $$ and Private Delivery
• Keystone HELP I 2006 - 2008• Unsecured loans to $10K for ES improvements• Fixed interest rate for maximum 10-year term
(2006: 7.99%; 2007-08: 8.99%)• Consumer oriented, contractor-centric program design• Housing Finance Agency introduces complementary
program for secured loans to $35,000
• Keystone HELP II 2009 - 2010• Unsecured loans to $15K for ES improvements
(6.99% for maximum 10-year term) • Unsecured loans to $15K for advanced ES improvements
(5.99% for maximum 10-year term)• Unsecured loans to $15K for improvements recommended
by whole-house audit (4.99% for 10-year term)
• Housing Finance Agency enhances complementary program for secured loans to $35,000
Production To Date (through August 2011)
• Loans made: 8509 (with secured: 9300) • Dollars lent: $57.2M (with secured: $74.2M)• Loss Reserve: approximately 8% of unpaid
balance)• Original Average term approximately 7 years, with
actual expected loan life closer to 5 years • Loan charge-offs to date of 1.48%, with late
accounts totaling less than 1%
Key to Success: Harmonizing Interests
Effective loan programs integrate, and maximize consonance between, critical participants
• Borrower (necessary)• Simple – fast – cheap (if lucky: cost-effective)
• Lender (Originator/underwriter/servicer) (necessary)• Easy to market to consumers – ability to control underwriting
decisions – take out strategy
• Contractor (highly desirable) • Easy to learn, easy to explain – competitive advantage – minimal
additional paperwork, obligations
• Program Sponsor (Supporting funds) (very likely)• Acceptable leveraging – relevant and effective projects – robust
data/metrics
• Capital Supplier (Aggregator) (very likely)• Alignment of economic interests – security – return – take out
strategy
Top Related