1 | TAP Webinar eere.energy.gov The Parker Ranch installation in Hawaii DOE Technical Assistance...

1 | TAP Webinar eere.energy.gov

The Parker Ranch installation in Hawaii

DOE Technical Assistance Program

March 17, 2011CDFIs: Opportunities for Partnerships with Energy Efficiency Programs


What is TAP?

DOE’s Technical Assistance Program (TAP) supports the Energy Efficiency and Conservation Block Grant Program (EECBG) and the State Energy Program (SEP) by providing state, local, and tribal officials the tools and resources needed to implement successful and sustainable clean energy programs.


How Can TAP Help You?

TAP offers:

• One-on-one assistance • Extensive online resource

library, including: Webinars Events calendar TAP Blog Best practices and

project resources• Facilitation of peer

exchange

On topics including:

• Energy efficiency and renewable energy technologies

• Program design and implementation

• Financing• Performance contracting• State and local capacity

building


The TAP Blog

Provides a platform for state, local, and tribal government officials and DOE’s network of technical and programmatic experts to connect and share best practices on a variety of topics.

Access the TAP Blog!http://www.eereblogs.energy.gov/tap/


Accessing TAP Resources

3) Ask questions via our call center at 1-877-337-3827 or email us at

[email protected]

We encourage you to:

1) Explore our online resources via the Solution Center

2) Submit a request via the Technical Assistance Center

mailto:[email protected]

http://www1.eere.energy.gov/wip/solutioncenter/

https://tac.eecleanenergy.org/


Title: Developing Low-Interest Retrofit Loan Programs for the Multifamily Sector

Host: Sarah Busche and Karlynn Cory, NREL

Date: March 23, 2011

Time: 3:00 - 4:15 PM EDT

Title: Ask the Expert: Energy Savings Performance Contracting

Host: Meg Giuliano, ICF; Karl Berntson and David McGeown, SRA; and Doug Dahle (NREL)


Time: 1:30 - 3:00 PM EDT

Title: Qualified Energy Conservation Bonds (QECBs): Updates From the Field

Host: Elizabeth Stuart, LBL


Time: 2:00-3:30 PM EDT

Title: Developing an Evaluation, Measurement, and Verification Plan: Residential Retrofits

Host: Julie Michals, NEEP


Time: 2:00 - 3:00 PM EDT

Upcoming Webinars

For the most up-to-date information and registration links, please visit the Solution Center webcast page at www.wip.energy.gov/solutioncenter/webcasts

Please join us again:

http://www.wip.energy.gov/solutioncenter/webcasts



The Opportunity Finance Industry

March 17, 2011The Opportunity Finance IndustryCreated by: Opportunity Finance Network, Wanda Speight, EVP, Finance


Opportunity Finance Network

• Opportunity Finance Network (OFN) is the nation’s leading network of community development financial institutions (CDFIs), with 184 high-performing CDFI Members that serve low-income and low-wealth people and communities in all 50 states and mange more than $9 billion in capital.

• For more than 25 years, OFN has been the leading catalyst in the CDFI industry, focusing on and excelling at:

– Understanding and assessing CDFI performance; – Building deep and broad public support for opportunity

finance; – Convening practitioners and partners to share

knowledge about practice and strategy; and – Driving strategic innovation.


The Opportunity Finance Industry

• The opportunity finance industry is a leading source of innovative, market-based solutions for economically distressed communities and underserved people across the United States.

• CDFIs are leaders of this mission-driven industry, which over the past 30 years has grown to include revolving loan funds, venture funds, banks and credit unions managing over $30 billion in total assets.

• Serving all 50 states and a growing number of Native unions, CDFIs currently provide more than $5 billion annually in loans, investments, and financial services to urban, rural, and Native communities.


The CDFI Footprint & Impact

• The opportunity finance industry is diverse. Individual CDFIs focus on the unique market conditions of the communities where they operate.

• Many CDFIs are engaged in housing, while others focus on small business or community development. CDFIs my also provide retail financial services, financial education, and technical assistance to small businesses.

CDFIs in the US • 572 community development loan funds• 203 community development credit unions • 139 community development banks • 25 venture capital funds

Customer Profile • 70% low-income• 60% are minority • 52% are female

Assets & Financing

• $29.4 billion in assets & $20.5 billion in financing outstanding

Annual Net Charge-Offs

• 2009 CDFI: 1.78% 2009 FDIC-insured: 2.49% • 2008 CDFI: 0.93% 2009: FDIC-insured: 1.28%


The CDFI Footprint & Impact

• CDFIs by the Numbers

– 35,624: Job created or maintained via small business and microenterprise opportunity finance;

– 60,205: Affordable housing units constructed or renovated with CDFI investments;

– 16,405: Responsible mortgages financed to first-time and other homebuyers;

– $20.5 billion: Total CDFI direct opportunity finance outstanding.

CDFI Data Project FY 2008


For more information please visit:

• www.opportunityfinance.net

• www.cdfifund.gov

http://www.cdfifund.gov/



CDFI Approach to Energy Efficiency

March 17, 2011Enterprise CascadiaJohn Berdes, PresidentAdam Zimmerman- Sr. Vice President


Product: Standardizing a Customized Need

• CO2 Matters: Energy usage screen– Prioritize the greatest CO2 impact

• Low Touch Underwriting– Non-Traditional: Utility payment history, FICO >590– IT Platform: Linked to utilities and loan management

• Product Specifications– Rate: 5.99% (3.99% for <250% Federal Poverty)– Term: 20 years– Security: subordinated lien on property – Servicing: on bill of utility providing energy for heat– Risk: Cash funded loan loss reserve: 10%– Affordable: Goal is net zero impact on the family budget

• Delivery financed by fees not interest margin


Outputs

2010 Actual 2011 Projected (Portland/Oregon + Seattle)

Homes Retro-fitted

367Homes Retro-fitted

1,500

Loans Dollars Outstanding

$4,658,464Loans Dollars Outstanding

$20,000,000

Simple ROI

5.17%Simple ROI

5.5%

Participating Contractors

21Participating Contractors

50


Why?

• CDFI Brand: If we don’t the carbon economy will be just about carbon, not opportunity

• Positioned: Seizing the opportunity at the earliest stages of an emerging industry

• Policy: Removing the obstacles to policy innovation and unleashing huge demand– In turn creating markets that deliver outcomes

• Regional: CO2 demands regional response and aggregated resources

• Resource: Substantial and sustained to bottom line


Outcomes (12/31/10)

Access to Credit (Inclusion) Access to Opportunity (Jobs)

% Borrowers < Median HH Income

58%% of Loan $ Paid as Wages

65%% Borrowers Non-White

13.8%Average Wage

$25.02% Borrowers in CDFI Tracts

29%% of Employees Women/Minority

51%% Subordinated Debt

98%% of Employees with Health Care

65%

Metric Tons CO2/Year 350


Market-Maker

Goal: Shift the residential energy efficiency market to an environment where action to improve the efficiency of homes is as easy as buying a car with better gas mileage.

• Standardized product offering with options• Standardized & auditable performance rating• Widely branded “outlets” for sales• Affordable, easy to access financing terms• Warranty and peace of mind (value proposition)

Ultimately, the product must remove obstacles to policy decisions that drive markets to “value”

efficiency


Cross Selling: Aligned Products

Efficiency Contractor FinanceGoal: Support business productivity and growth to meet demand • Provide access to working

capital • Blanket loan agreements for

individual contract advances• Incent quality assurance • Build credit management

capacity• Enhance relationships with

suppliers and subs• Lay groundwork for supply

chain management

Start Up for New Entrants

Goal: Create access to the market for emerging firms historically under-represented in this space.• Program preference for

underserved and rural firms• Dedicated technical

assistance, training, and certification support

• CDFI capital enhanced by community partners

• Partnerships with existing firms


Liquidity Drives the Bus

• Mandate: Setting the pace on the product and TBL tactics demands setting the pace on liquidity

• Now: $10M pilot, Q2-11: Replicable, marketable– Tiered PRI/SRI/Market with 20-30% guarantee– Yield below market in the 5.5% range– Right regional players at the table

• Challenges: price point; portfolio performance; underwrite; maturities; market place

• Bottom Line: Liquidity must value the outcomes and the pace of achieving them



City of Indianapolis- Office of Sustainability and INHP Partnership

March 17, 2011John Hazlett- City of Indianapolis, Office of SustainabilityBecca Murphy- INHP, EcoHouse Project ManagerJoe Huntzinger- INHP, VP of Lending, Corporate & Capital Development


Office of Sustainability

• Created in October 2008• City-wide effort across City departments• Public-Private Partnership Approach• Focus on long-term cost savings, building our economy,

improving the local environment and enhancing our quality of life

www.sustainindy.org


DOE BetterBuildings Grant

Funding Background:– 2009 Recovery Act– $482M allocated to BB Program– 34 Grant Recipients Total– City of Indianapolis awarded $10M

http://links.govdelivery.com/track?type=click&enid=bWFpbGluZ2lkPTEyMjY4MDImbWVzc2FnZWlkPVBSRC1CVUwtMTIyNjgwMiZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTEyNzY1NzU1NzAmZW1haWxpZD1qaGF6bGV0dEBpbmR5LmdvdiZ1c2VyaWQ9amhhemxldHRAaW5keS5nb3YmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&101&&&http://www.energy.gov/

http://links.govdelivery.com/track?type=click&enid=bWFpbGluZ2lkPTEyMjY4MDImbWVzc2FnZWlkPVBSRC1CVUwtMTIyNjgwMiZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTEyNzY1NzU1NzAmZW1haWxpZD1qaGF6bGV0dEBpbmR5LmdvdiZ1c2VyaWQ9amhhemxldHRAaW5keS5nb3YmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&100&&&http://www.eere.energy.gov/betterbuildings/


Near Eastside Sweeps Grant Program

Near Eastside Sweeps

Grant Program– Retrofit 800 homes, 200 businesses and 20 non-profits (churches

and community centers)– $1,500 per home, $2,000 per business/non-profit will be available as

a grant – Eligible measures will include:

• Air Sealing and insulation• HVAC equipment upgrades• Duct repair and sealing• Water Heater upgrades• Lighting


Loan Program Partnership with INHP

Key points:• INHP’s track record and history with the City• Acknowledge and work through issues early in the

negotiation process• Respect the organization’s mission, organizational structure

and existing relationships with lenders• Value institutional knowledge


INHP

• 22-year-old, independent, housing nonprofit 501 (c)(3) CDFI

• Mission: To increase safe, decent, affordable housing opportunities that foster healthy, viable neighborhoods

• Our mission is both people and place basedPeople – ANYONE with a real or perceived

barrier to homeownership Place – targeted neighborhoods of Indianapolis


INHP Programs

Comprehensive education—prepares our clients for success• Homeownership preparedness• Post-purchase support• Credit, budgeting, financial planning, and more

Financing options—helping clients access a loan program that meets their needs• First mortgages• Emergency repairs• Accessibility loans• Down payment assistance


Lending Demographics (2010)


Service Area

As a nonprofit, INHP concentrates loan efforts to specific areas and families

Within the defined (tan) target areas: • Verified income up to 120% of the

Area Median Income (AMI) as defined by HUD, based on family size.

Within the remainder of Marion County, City of Indianapolis:• Verified income cannot exceed

80% of the AMI as defined by HUD, based on family size.


Targeted Income Metric

A family of 4 with an income of $54,950 is at 80% of AMI

A family of 2 with an income of $65,940 is at 120% of AMI


Public, Private, Philanthropic Partnerships

INHP’s partnership network•Board strength and composition•Area Community Development Corporations and nonprofits•City and state government•Local businesses and lenders

Since, just 2000:• Nearly 12,500 families have completed an INHP

homeownership program

• INHP, with its lender partners, has invested more than $200 million in mortgages for Indianapolis families


Loan Pool

Structuring a Loan Pool

• Previous pool leaders negotiate new pool terms

• Terms are set with signed dollar commitments

• Loan pool is closed with lead lenders

• Additional participants are approached to invest


Loan Pool

Key Terms

• Pool Borrower is INHP• Collateral is the mortgages we make• 90/10 - Lender & INHP split• 180 day default buy-back• Borrower 30 year $$ = perfect hedge• Quarterly draw with interest rate set on draw date


Loan Pool

Proven track record

More than 20 years and 6 loan pools

• Totaling nearly $120 million

• Never a loss to the lender

• Five prior pools paid in full


EcoHouse Loan Pool

New Loan Pool for the EcoHouse Project

Part A – Secured, secondary mortgagesPart B – Unsecured note loans

• Shorter loan terms = shorter loan pool

• Different rate index

• But, same borrower / underwriting profile as prior pools

• Collateral = $3 million loan loss reserve


EcoHouse Project

INHP will:

• Provide below-market rate, fixed-rate, fully amortizing loans for energy upgrades

• Bring together available resources• Project management

• Rebates - utility participation

• Additional programs when homeowner needs go beyond eligible measures


Basic Terms

SECURED by the home UNSECURED

LOAN AMOUNT $4,000 – 15,000. $1,000– 4,000.

LOAN TERM TO REPAY Up to 10 years Up to 4 years

LOAN POSITION 1, 2 or 3rd not applicable

FICO CREDIT SCORE 580 615

LOAN RATEdetermined by current rates, but below market

Determined by current rates, but below market

www.inhp.org l 317-610-HOME (4663)

Lending Terms


Title: Developing Low-Interest Retrofit Loan Programs for the Multifamily Sector

Host: Sarah Busche and Karlynn Cory, NREL


Time: 3:00 - 4:15 PM EDT

Title: Ask the Expert: Energy Savings Performance Contracting

Host: Meg Giuliano, ICF; Karl Berntson and David McGeown, SRA; and Doug Dahle (NREL)


Time: 1:30 - 3:00 PM EDT

Title: Qualified Energy Conservation Bonds (QECBs): Updates From the Field

Host: Elizabeth Stuart, LBL


Time: 2:00-3:30 PM EDT

Title: Developing an Evaluation, Measurement, and Verification Plan: Residential Retrofits

Host: Julie Michals, NEEP


Time: 2:00 - 3:00 PM EDT

Upcoming Webinars

For the most up-to-date information and registration links, please visit the Solution Center webcast page at www.wip.energy.gov/solutioncenter/webcasts

Please join us again:

http://www.wip.energy.gov/solutioncenter/webcasts

1 | TAP Webinar eere.energy.gov The Parker Ranch installation in Hawaii DOE Technical Assistance...

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