Explore Innovative Mortgage Solar Financing Solutions

Key FHA Solar Guidelines

  • Ownership: The solar photovoltaic (PV) system must be owned, not leased, to contribute to the property’s value.
  • Financing Limit: The cost of the new system cannot exceed 20% of the property's appraised value.
  • Installation Deadline: For new installations, the system must be installed within 120 days of the mortgage closing.
  • Appraisal Impact: Owned panels are treated as part of the real estate and add value. Leased panels do not.
  • Property Type: Eligible properties include owner-occupied 1–4 unit homes and manufactured housing, but usually exclude condos.
  • Installation Deadline: Systems must be new (not used) and typically must be installed within 120 days of loan closing.

FHA Power Saver

  • PowerSaver Home Energy Upgrade (Up to $7,500): This is a completely unsecured personal loan. No home equity is required, and there is no home appraisal needed. It is typically used for smaller projects like solar hot water heaters, insulation, or upgrading HVAC systems.
  • PowerSaver Second Mortgage (Up to $25,000): This is the sweet spot for solar PV panel and battery storage installations. It acts as a second mortgage (similar to a home equity loan) with fixed low rates and terms up to 15 or 20 years.
  • PowerSaver Energy Rehab (First Mortgage): This rolls the energy upgrades into a primary FHA 203(k) rehabilitation loan when you are buying a home or doing a major refinance.
Group of smiling business people collaborating on a sustainable home project, examining a model house with a solar panel during a meeting in a modern office

Fannie Mae's HomeStyle Energy Product

  • The 15% Cap: You can generally borrow up to 15% of the home’s "as-completed" appraised value to pay for the energy improvements. For example, if a home will be worth $400,000 after solar panels are installed, you can allocate up to $60,000 of the mortgage strictly toward the solar project.
  • Escrow Account: The funds for the upgrades don't go into your pocket. The money is held in a secured escrow account by the lender. As the solar installer or contractor completes the work, the lender pays them directly.
  • Completion Timeline: All financed energy improvements must be completed within 180 days (6 months) of the loan’s closing date.