Last month a client came to me for a cash out loan to put a Solar Roof on his home. He told me that a percentage of the new tiles will actually be solar panels and that he will have no electricity bill and be able to sell money to a local utility. That was the first time I had ever done a loan for a solar roof.
Recently my wife and I drove to Los Angeles area and we took a route thru Central California and thru the high desert. We can on an area north of Palmdale that had a solar panel farm. We drove by these panels for more than 5 miles and maybe 10 miles. That was the largest solar farm we had ever seen; it was actually impressive.
Solar seems to be everywhere. We are representing a seller in Sacramento who has a Solar Lease. Because his solar panels are leased the buyer's lender needs to add $61 monthly to the debt ratio. I find this interesting because the banks never require utilities to be added to the debt ratio and in this case our seller lowered his monthly utility bill by more than $100 a month by having the solar panels. His lease payment is $61 and he pays approximately $25 additional to the utility company. Before solar panels his monthly bill was right at $200 a month. The buyers lender will count the $61 as a debt and the buyer also must qualify with the solar company to transfer the lease.
We actually have a lender that does not charge any payment to the debt ratio and I have read the Fannie Mae and FHA guidelines - interpretation can go either way in some situations. Besides the standard lease there is a Power Purchase Agreement - we also have a lender that will count the payment against the debt ratio when the lease is a standard lease but will not count the payment when the contract is a Power Purchase Agreement.
So, what is the advice? When you see that there is a lease on the Preliminary Report get a copy of the lease right away and find out if the payment is counted in the debt ratio..this can save the seller and the buyer from a major headache. Here is a video regarding Solar Panels - eventually these will be common in most states.
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