1. Green Jobs/Green New York: Increasing Opportunities for Home Energy Efficiency Upgrades Anthony Ng Green & Equitable Economies Strategist Center for Working Families October 1, 2013 NYS CDFI Conference

2. Workshop Goals Learn about Green Jobs/Green New York Learn how Craft3, an Oregon and Washington based CDFI is offering energy efficiency loans Get your feedback on a proposal for an energy efficiency loan pilot program, that would involve a partnership between credit unions/CDFIs and the NYS Energy Research & Development Authority (NYSERDA)

3. Green Jobs/Green New York (GJGNY) PRIMARY GOALS Conserve on energy use Save money for low-to- moderate income homeowners Create good jobs Reduce carbon emissions

4. Governor Paterson Signs GJGNY into Law

5. GJGNY: Removing Barriers to Retrofits Free/low-cost energy assessments Low-interest financing and incentives On-bill recovery (OBR) 18 community-based organizations (CBO) conduct program outreach, assist homeowners with financing and retrofit process; several also do workforce recruitment. Building Performance Institute (BPI) accredited contractors NYSERDA must approve project work scopes Quality control: 10 to 15 percent of projects are inspected afterwards

6. Green Jobs/Green NY CBOs

7. Positive Community Impact Households completing a retrofit through GJGNY like the program Most important reasons for completing a retrofit: save money and improve the home Free/low cost audit, incentives, and low-interest loans very important in decision to do a retrofit Nearly 46% of contractors surveyed have hired workers since GJGNY began Creating community benefits – leveraging CBO community outreach to generate better paying jobs and price discounts for customers

8. Green Jobs/Green New York Progress to Date For 1-4 family homes (as of 8/31/2013) 40,280 energy assessments completed (87.5% of goal) 10,730 projects completed (71.5% of goal) $37.3 million issued in energy efficiency loans Signs of market transformation Developing future statewide energy efficiency policy Tracy & Wendy Persons. Binghamton, NY homeowners

9. Energy Expenses and Savings Average annual energy expenses per household in NYS Average annual energy savings for a retrofitted home $1724 Capital Region/Saratoga: $755 Central New York: $571 Finger Lakes: $533 Long Island: $870 Mid-Hudson/Westchester: $802 New York City: $885 Southern Tier: $924 Western New York: $588

10. Many Buildings Can Still Become Energy Efficient Carbon War Room: Market potential of energy efficiency is $87 billion per year Ceres: $280 billion investment opportunity that can save building owners $1 trillion over a decade NYC: 75% of carbon emissions comes from its buildings. 80 % of our buildings will still exist in 2050. This is a lot economic activity that can create and support businesses and jobs

11. How Do I Pay for It? GJGNY Financing Options Smart Energy Loan (3.99%; 3.49% for borrowers that repay with automatic payment) On-Bill Recovery (OBR) Loan (3.49%) For each loan, two sets of underwriting standards: Tier 1 – Standard approval process Tier 2 – Alternate approval process that incorporates utility bill repayment history Loan amount: up to $13,000; goes up to $25,000 if the payback period is under 15 years 5, 10, or 15 year loan terms; term can’t exceed expected useful life of energy efficiency measures Subsidies also available for homeowners above and below 80% of area median income.

12. Current GJGNY Underwriting Criteria CriteriaTier 1Tier 2 Minimum credit score or alternative 640. 680 if self-employed for 2 years+; 720 if self-employed <2 years. None, but must be current on energy and mortgage bills: Energy bills: at least 2 straight months for each of last 2 years. (if less than 2 years of history, current on 9 of last 12 months). Mortgage bills: current for past year (minimum of 12 months of payment history). For properties with tenant-paid energy bills, owner must be current for past 2 years, but isn’t subject to energy bill payment history requirements. No energy/mortgage payments more than 60 days late for the lesser of last 2 years or time of ownership.

13. Current GJGNY Loan Underwriting Criteria CriteriaTier 1Tier 2 Maximum debt-to-income ratio Up to 50%-- Up to 55%. -- Up to 70% if credit score is 680+ -- Up to 100% for applicants who qualify for Assisted Home Performance subsidy BankruptcyNone within last 7 yearsNone within last 5 years JudgmentsNo outstanding collections, judgments, or tax liens > $2,500 No outstanding collections, judgments, or tax liens > $2,500

14. Administration of Current Green Jobs/Green New York RLF RLF capitalized with $51M in Regional Greenhouse Gas Initiative (RGGI) funds. $26M for 1-4 family homes. Energy Finance Solutions (EFS) originates the loans on behalf on NYSERDA For on-bill recovery, the utilities collect the on-bill payments and remit to NYSERDA, which replenishes the RLF $24.3M bond issuance just completed to also replenish RLF

15. Benefits of On-Bill Recovery Re-pay retrofit costs on utility bill – one bill to pay, not two. Charge is placed on utility bill Use energy savings to repay energy improvement costs – cash flow neutrality is the goal Customers pay their utility bills. Amount of uncollected bills are low. New York State has strong consumer protections to avoid utility shut-off. These protections provide security for repayment. Increase in on-bill recovery loan applications: August 2013 -- 37%August 2012 – 24%

16. On-Bill Recovery Loan Performance (as of 8/31/13) 3,737 outstanding total loans at $33.35M (Smart Energy & OBR) 1,029 are on-bill recovery (OBR) loans at $10.67 million Average loan size is about $10,500 97% of on-bill customers pay on time or within 30 days of the due date. 944 loans (91.7%) are current ($9.8 million) 57 loans (5.5%) are 1-30 days late ($565,531) 16 loans (1.6%) are 31-60 days late ($185,379) 12 loans (1.1%) are 61-120 days late ($124,950) 6 loans are 120+ days late and have been charged off ($47,079). This represents 0.57% of all issued OBR loans.

17. Craft3 Presentation

18. Goals of On-Bill Recovery (OBR) Pilot Loan Program Fulfill original vision of GJGNY’s proposal for how on-bill recovery would work Unlock the full potential of utility bill repayment history as a measure of creditworthiness Leverage the full potential of energy savings to re-pay retrofit costs Help more homeowners pay for and complete retrofits, especially low-to-moderate income families Simplify the qualification process, leading to greater access of on-bill recovery loans Create a $5 million pilot program

19. Administration of OBR Pilot Loan Program Take advantage of existing loan origination infrastructure and servicing structure Invest capital in NYSERDA’s revolving loan fund (RLF) for residential loans Energy Finance Solutions (EFS) originates the loans on behalf on NYSERDA The utilities remit the on-bill payments to NYSERDA, allowing it to replenish its RLF. For this pilot program, it would repay all investors directly NYSERDA might have loan loss reserve and other credit enhancement to mitigate risk

20. Proposed Underwriting Criteria for OBR Pilot Loan Program CriteriaTier 2Pilot Program Minimum credit score or alternative None, but must be current on energy and mortgage bills: Energy bills: at least 2 straight months for each of last 2 years. (if less than 2 years of history, current on 9 of last 12 months). Mortgage bills: current for past year (minimum of 12 months of payment history). For properties with tenant-paid energy bills, owner must be current for past 2 years, but isn’t subject to energy bill payment history requirements. No energy/mortgage payments more than 60 days late for the lesser of last 2 years or time of ownership. None, but must be current on energy bill: Energy bills: at least 2 straight months for each of last 2 years. (if less than 2 years of history, current on 9 of last 12 months). No energy payments more than 60 days late for the lesser of last 2 years or time of ownership.

21. Proposed Underwriting Criteria for OBR Pilot Loan Program CriteriaTier 2Pilot Program Maximum debt-to-income ratio-- Up to 55%. -- Up to 70% if credit score is 680+ -- Waived for applicants who qualify for AHPwES subsidy Not required BankruptcyNone within last 5 yearsNot required JudgmentsNo outstanding collections, judgments, or tax liens > $2,500 Not required

22. Feedback Questions Are our proposed underwriting standards too risky? Would you require credit enhancement such as loan loss reserve, to manage the risk? How do you feel about not originating the loans? Is it essential to lend to LMI homeowners in your community; or is anywhere in the state okay? Are there other factors that must be addressed, in order for your institution to invest in this pilot program? Are there other ways you would like to offer energy efficiency loan products (e.g. participation loan), that we haven’t already discussed?

23. For more information, contact: Anthony Ng Green & Equitable Economies Strategist anthony@cwfny.org 212-206-9168, x12