If you’ve been following our series on financing resources for solar energy systems in San Diego, we’re bringing you another potential financial source in the form of secured financing options.
Secured financing gives interested parties the option to get a loan for installation of a solar energy system in their homes or establishments. By applying and getting approved for a solar loan, a homeowner can use the loaned amount to install a solar energy system. In the case of secured loans or financing, collateral is required for loan approval, and in most cases, the house where the solar system is going to be installed will serve as the collateral.
If you are considering a secured loan to finance your solar system installation, here are some great selections:
Home Equity Lines of Credit (HELOC) or Home Equity Loans (HEL)
These two types of secured loan are available through banks. HELOCs are offered as revolving credit, in which the homeowner can withdraw money based on the purchase need and pays it back. Meanwhile, HELs involve a lump-sum amount of money to finance the installation of the solar system, and the loaned amount is paid over a course of a specified time.
FHA 203(k) Rehabilitation Loans
This type of loan is offered by the Federal Housing Administration (FHA) via lending institutions to finance single family mortgage insurance needs. The FHA-approved lender arranges for appraisal of the collateral (i.e. the home) and provides a credit line for the homeowner. This line of credit may be used for property modifications and upgrades, including installation of solar panels.
HUD Title 1 PowerSaver Loans
The U.S. Department of Housing and Urban Development (HUD) offers a special kind of housing loan for homeowners who want to upgrade their energy systems. This secured loan option was designed specifically for “single-unit, detached, owner-occupied/principal residence properties,” as declared in this FHA page. The borrower can loan as much as $25,000 to upgrade the home’s energy system to solar power.