Evaluation

All Clean Energy Fund loan applicants are subjected to a substantial programmatic and financial review.

Loan terms

Loan Amount
Clean Energy Fund loans range from $30,000 to $500,000. CDFA will consider Clean Energy Fund loans down to $15,000 for certain Municipal projects.

Loan Term
Up to 10 years with potentially longer amortization periods for renewable energy projects. Interest-only payments are allowed during the construction period, up to 6 months, followed by principal and interest payments.  There is no penalty for Pre-payment.

Interest Rate
On a quarterly basis, CDFA will set its base lending rate (“CDFA Base Rate”) by considering the prime rate (also known as the Wall Street Journal Prime Rate), cost of capital, and potential impact on borrowers. Applicants may qualify for one or more discounts with a minimum lending rate of 2.0%. CDFA reserves the right to adjust the offered rate based on project risk, term, community or economic development impact, or other factors. An interest rate calculator is available on the CDFA website. Available discounts are subject to change. See CDFA Interest Rate Calculator.

Loan to Value Ratio
CDFA allows for loans up to 80% of the value of the Clean Energy project (20% borrower equity required). See Collateral section below for information on collateral value.

Origination Fee – (If Federal loan funds are awarded, fees will be credited to borrower)
A sliding fee equal to 1% of the CDFA loan amount (see the fee table below) is charged to cover loan underwriting and full application review. This fee is due at the time of loan closing. If your application is denied due to underwriting or eligibility, this fee is refundable.

	Origination Fee	Minimum Fee	Cap
Municipality	1.0%	$325	$650
Non-profit	1.0%	$325	$1000
Business	1.0%	$500	$2,000

Closing Costs
CDFA charges pass-through fees for security recording/filing and for any attorney fees. In a typical loan, these fees total less than $250.

Collateral/Guaranty
CDFA requires repayment guarantee and security on all loans, except as noted in certain Application and Program Guides. CDFA will accept a mortgage on real property, a UCC filing on the other assets of the borrower or a combination where warranted. For a business loan, a personal guarantee will be required from any owner of 20% or more of the company or where the credit history of the borrower is deemed to be at risk.

Note: The terms listed above are subject to differences within various funding sources and are subject to change.

Loan Documentation

The following documents will be required for closing of an approved loan:

Loan Commitment Letter
This letter states the amount of the approved loan, loan terms, and any special conditions pertaining to the loan commitment.

Loan Agreement and Promissory Note
Borrowers must enter into a Loan Agreement and Promissory Note with CDFA using CDFA’s standard form. The Loan Agreement and Promissory Note includes the ‘maximum loan amount’ that CDFA might provide to the project along with all of the terms governing the loan.

Collateral Documentation
CDFA will determine the appropriate security for the loan (in communication with the Borrower). Energy Efficiency projects will typically require a Mortgage and Security Agreement be signed and filed with the County to place a lien on the land and/or building subject to the loan. For solar projects, a UCC Financing Statement will be filed with the County to place a lien on the equipment being installed. If the collateral value is not sufficient in relation to the amount of the loan, CDFA reserves the right to additionally require a Mortgage. For all projects, a mortgage may be placed in a subordinated position to other mortgages.

Personal Guaranty (Businesses only)
CDFA requires a personal guaranty to be signed by the business owner.  This personal guaranty is to provide for any shortfall in value should the business default on repayment of the loan and liquidation of the collateral does not satisfy the debt obligation outstanding.

Disclosure of Finance Charges (399-B)
Outlines the basic terms of the loan and any fees to be charged at loan closing.

Corporate Resolution or Municipal meeting minutes
The borrower will be asked to provide documentation expressing the authority for the borrowing organization to borrow up to the ‘maximum loan amount’, to grant guarantees or assignments (if required), and to designate an individual to sign the documents with CDFA on the borrowing organization’s behalf. A written resolution or meeting minutes documenting the corporation or municipality’s approval is required.

Attorney Opinion Letter (Municipalities only)
Verifies the review of the loan documents.

Additional Conditions to Closing
Borrower must agree to disclose all energy usage data for a period of 12 months following the project completion, and provide evidence of town approvals and permits, if applicable. Borrower must agree that if grant or rebate funds (i.e. USDA REAP grant or utility incentives) are received supporting costs covered by this loan, applicant will immediately pay down CDFA loan by that amount.  If Federal funds are used to finance the project (discussed during application process), certain federal requirements will apply including the Davis Bacon Act.