1 | TAP Webinar eere.energy.gov The Parker Ranch installation in Hawaii DOE Technical Assistance Program March 17, 2011 CDFIs: Opportunities for Partnerships with Energy Efficiency Programs
Dec 20, 2015
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
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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.
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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
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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/
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Accessing TAP Resources
3) Ask questions via our call center at 1-877-337-3827 or email us at
We encourage you to:
1) Explore our online resources via the Solution Center
2) Submit a request via the Technical Assistance Center
6 | TAP Webinar eere.energy.gov
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)
Date: March 24, 2011
Time: 1:30 - 3:00 PM EDT
Title: Qualified Energy Conservation Bonds (QECBs): Updates From the Field
Host: Elizabeth Stuart, LBL
Date: March 28, 2011
Time: 2:00-3:30 PM EDT
Title: Developing an Evaluation, Measurement, and Verification Plan: Residential Retrofits
Host: Julie Michals, NEEP
Date: March 29, 2011
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:
7 | TAP Webinar eere.energy.gov
The Parker Ranch installation in Hawaii
The Opportunity Finance Industry
March 17, 2011The Opportunity Finance IndustryCreated by: Opportunity Finance Network, Wanda Speight, EVP, Finance
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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.
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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.
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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%
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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
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For more information please visit:
• www.opportunityfinance.net
• www.cdfifund.gov
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The Parker Ranch installation in Hawaii
CDFI Approach to Energy Efficiency
March 17, 2011Enterprise CascadiaJohn Berdes, PresidentAdam Zimmerman- Sr. Vice President
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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
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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
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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
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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
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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
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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
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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
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The Parker Ranch installation in Hawaii
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
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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
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DOE BetterBuildings Grant
Funding Background:– 2009 Recovery Act– $482M allocated to BB Program– 34 Grant Recipients Total– City of Indianapolis awarded $10M
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
38 | TAP Webinar eere.energy.gov
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)
Date: March 24, 2011
Time: 1:30 - 3:00 PM EDT
Title: Qualified Energy Conservation Bonds (QECBs): Updates From the Field
Host: Elizabeth Stuart, LBL
Date: March 28, 2011
Time: 2:00-3:30 PM EDT
Title: Developing an Evaluation, Measurement, and Verification Plan: Residential Retrofits
Host: Julie Michals, NEEP
Date: March 29, 2011
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: