"The Status, Options & Opportunities in Lending for Energy Efficiency in Colorado" Stephen Ponce-Pore is the Energy Programs Manager for the Bank of Colorado

1. Lending Opportunities in Colorado
Energy Efficiency
Stephen Ponce-Pore – 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 face….
Three Financial Challenges
1. Upfront cost – too high
2. Monthly payments – too high
3. Can’t 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 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. 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. 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. 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. 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. 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. 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. Ideas? Comments? Questions?
Bank of Colorado or
Colorado ENERGY STAR Mortgage
Stephen Ponce-Pore
(970) 231-4024
Stephen.poncepore@bankofcolorado.com
www.ColoradoEnergyStarMortgage.com