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Lending Opportunities in Colorado
        Energy Efficiency
               Stephen Ponce-Pore – Bank of Colorado




     ...
Colorado Retrofit Working Group

  Energy Efficiency
Finance Summit 2010
              Stephen Ponce-Pore, M.S.
          ...
Energy Concerns Are Diverse
    Community and Environment
•   International conflicts, geopolitical unrest, injustice.
•  ...
Those who want to lessen the impact of their
homes, reduce energy use, or improve efficiency
currently face….

           ...
What conventional financing options exist
 for a customer that needs to borrow for an
 Energy Efficient Retrofit???

1. Un...
Conventional Financing Methods
                           Credit       Second        First
                           Card...
We know…
48% of US energy consumption
is in buildings  US Energy Information Administration




38% is the average amount ...
How can home equity and existing
residential mortgage rates be
used to offer an energy
solution…?


     …offer a discount...
The Colorado
      ENERGY STAR® Mortgage
Use the ESM to:
  Purchase a new ENERGY STAR home

  Refinance and Retrofit for...
How ESM works…
• The payment on $200,000.00 mortgaged at 5.00% for 30 years, is $1,073.00.
  The ESM provides 1% ($2,000.0...
Advantages of ESM
Costs
     Nothing down
     Nothing a month
     Nothing in the long run


Availability
  “If you ca...
So– does the ESM address…

1. Upfront cost – NONE
2. Monthly payments – LOWER
3. Can’t qualify for financing –
If you can ...
Challenges ahead
• Continuity of Funding – currently
  ARRA/GEO funded
• Promotion and Public Outreach –
  best kept secre...
Ideas? Comments? Questions?


           Bank of Colorado or
     Colorado ENERGY STAR Mortgage


       Stephen Ponce-Por...
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Colorado Energy Finance Summit-Stephen Ponce Pore

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"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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Transcript of "Colorado Energy Finance Summit-Stephen Ponce Pore "

  1. 1. Lending Opportunities in Colorado Energy Efficiency Stephen Ponce-Pore – Bank of Colorado Slide 18
  2. 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. 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. 4. Those who want to lessen the impact of their homes, reduce energy use, or improve efficiency currently face…. Three Financial Challenges 1. Upfront cost – too high 2. Monthly payments – too high 3. Can’t qualify for financing $?$?$?$?$?$?$?
  5. 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. 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. 7. We know… 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. 8. How can home equity and existing residential mortgage rates be used to offer an energy solution…? …offer a discounted mortgage loan to homeowners that invest in energy efficiency and renewable energy for their homes.
  9. 9. The Colorado ENERGY STAR® Mortgage Use the ESM to:  Purchase a new ENERGY STAR home  Refinance and Retrofit for Energy Efficiency  Purchase and Retrofit for Energy Efficiency Loan Types: Conventional, FHA, VA, Bank, and Jumbo • Matching funds provided by the Governor’s Energy Office
  10. 10. How ESM works… • 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 homeowner’s monthly bills!
  11. 11. Advantages of ESM Costs  Nothing down  Nothing a month  Nothing in the long run Availability “If you can afford a mortgage, you can afford an ENERGY STAR Mortgage.”
  12. 12. So– does the ESM address… 1. Upfront cost – NONE 2. Monthly payments – LOWER 3. Can’t qualify for financing – If you can qualify for a mortgage you can qualify for an ESM. …YES!
  13. 13. Challenges ahead • Continuity of Funding – currently ARRA/GEO funded • Promotion and Public Outreach – best kept secret with little marketing budget • Speed to Market – current interest rates may not last • Lender Education and Participation - learning curve for lenders
  14. 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
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