Solar Options
| Description | Borrower does not own the solar panels and pays monthly lease payments to have access solar |
| Ownership of Solar Panels | Solar Company |
| Agreement Type | Solar Lease Agreement |
| Documentation Requirements (Prior to Doc) |
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| Prelim Title/Commitment | UCC Filing should be reflected on Title Report – Review all sections If original UCC filing statement reflects solar panel equipment only – No UCC Terminaton Required! |
| Appraisal | No value given on appraisal |
| Credit Report | Not on Credit Report |
| Debt-to-Icome (DTI) Ratio | Refer to Detailed Checklist (click here) and/or Agency Guidelines |
| Combined Loan-to-Value (CLTV) Ratio | N/A |
| Fee Disclosure | N/A |
| Description | Borrower purchases power produced by the solar panels, and has no ownership of panels |
| Ownership of Solar Panels | Solar Company |
| Agreement Type | Power Purchase Agreement |
| Documentation Requirements (Prior to Doc) |
|
| Prelim Title/Commitment | UCC Filing should be reflected on Title Report – Review all sections If original UCC filing statement reflects solar panel equipment only – No UCC Terminaton Required! |
| Appraisal | No value given on appraisal |
| Credit Report | Not on Credit Report |
| Debt-to-Icome (DTI) Ratio | Refer to Detailed Checklist (click here) and/or Agency Guidelines |
| Combined Loan-to-Value (CLTV) Ratio | N/A |
| Fee Disclosure | N/A |
| Description | Borrower owns the solar panels financed with a note/security agreement |
| Ownership of Solar Panels | Existing Homeowner |
| Agreement Type | Note and Deed of Trust |
| Documentation Requirements (Prior to Doc) |
|
| Prelim Title/Commitment | UCC Filing should be reflected on Title Report – Review all sections UCC Termination or Subordination will be required! |
| Appraisal | Refer to Detailed Checklist (click here) and/or Agency Guidelines |
| Credit Report | Refinance Loans – check credit report for solar financing/debt |
| Debt-to-Income (DTI) Ratio | If subordinating, must include in DTI; If paid off or terminated, do not include in DTI |
| Combined Loan-to-Value (CLTV) Ratio | If subordinating, must include in CLTV; If paid off or terminated, do not include in CLTV |
| Fee Disclosure | Refinance and Subordinating – Confirm with title if there are subordination agreement and/or recording fees |
View the Financed Solar Panels (As a Fixture to Real Estate) Checklist
| Description | Borrower owns the solar panels financed with a loan not secured to real estate |
| Ownership of Solar Panels | Existing Homeowner |
| Agreement Type | Installment and/or UCC Financing Statement |
| Documentation Requirements (Prior to Doc) |
|
| Prelim Title/Commitment | May or may not be Title Report |
| Appraisal | No value given on appraisal |
| Credit Report | May or may not be on Credit Report |
| Debt-to-Income (DTI) Ratio | Must include in DTI |
| Combined Loan-to-Value (CLTV) Ratio | N/A |
| Fee Disclosure | N/A |
| Description | Owns the solar panels outright and has no related debt; if purchase, it’s transferred as a fixture to the property |
| Ownership of Solar Panels | Existing Homeowner |
| Agreement Type | N/A |
| Documentation Requirements (Prior to Doc) |
N/A |
| Prelim Title/Commitment | Not on Title Report |
| Appraisal | May be included in appraiser’s opinion of the market value of the property based on standard appraisal requirements |
| Credit Report | Not on Credit Report |
| Debt-to-Income (DTI) Ratio | N/A |
| Combined Loan-to-Value (CLTV) Ratio | N/A |
| Fee Disclosure | N/A |
Detailed Checklists
Solar Panels Leased or Covered by a Solar Power Purchase (PPA)
- Title may reflect a Pre-Cautionary UCC Filing. When the only property described in the UCC Filing as collateral is the solar equipment covered by the lease or PPA, then this is considered only a minor title impediment and nothing further is needed.
- Appraiser does NOT include solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- Include the debt obligation in the DTI ratio unless the lease of PPA is structured to include a specific amount of energy as a fixed payment or when the PPA payment is calculated solely based on the energy produced by the equipment
- Property must maintain access to an alternate source of electrical power that meets community standards
- Damage that occurs as a result of installation, malfunction, manufacturing defect, or the removal of the equipment is the responsibility of the owner of the equipment and must repair or replace the damage to it’s prior condition
- In the event of a foreclosure, the lender of assignee has the discretion to terminate the lease/agreement and require removal of the equipment, become, without payment of any transfer or similar fee, the beneficiary of the borrower’s lease/agreement with the third party, or, enter into a new lease/agreement with the third party, under terms no less favorable than the prior owner.
- Title may reflect a Pre-Cautionary UCC Filing. When the only property described in the UCC Filing as collateral is the solar equipment covered by the lease or PPA, then this is considered only a minor title impediment and nothing further is needed.
- Appraiser does NOT include solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- No debt to include in the DTI ratio
- Property must maintain access to an alternate source of electrical power that meets community standards
- Damage that occurs as a result of installation, malfunction, manufacturing defect, or the removal of the equipment is the responsibility of the owner of the equipment and must repair or replace the damage to it’s prior condition
- In the event of a foreclosure, the lender of assignee has the discretion to terminate the lease/agreement and require removal of the equipment, become, without payment of any transfer or similar fee, the beneficiary of the borrower’s lease/agreement with the third party, or, enter into a new lease/agreement with the third party, under terms no less favorable than the prior owner.
Financed Solar Panels (As a Fixture to Real Estate)
- Title will reflect either a UCC-1 Filing, mortgage debt or PACE loan. If title reflects a UCC-1 Filing, the UCC should be reviewed to confirm that the filing includes both the solar panel equipment as well as the dwelling and land as its collateral.
- Obtaining financing statement to confirm that the debt is not a Lease or Power Purchase Agreement
- In the case of a UCC-1 Filing, it must be either terminated or subordinated
- Any other mortgage secured to the property used in
financing the solar panel equipment must be subordinated - Appraiser to include the solar panels in the opinion of market value unless financing agreement allows for repossession of the solar panel equipment for default of the financing terms
- Include the debt in the CLTV ratio
- Include the debt obligation in the DTI ratio
- Title will reflect either a UCC-1 Filing, mortgage debt or PACE loan. If title reflects a UCC-1 Filing, the UCC should be reviewed to confirm that the filing includes both the solar panel equipment as well as the dwelling and land as its collateral.
- Obtaining financing statement to confirm that the debt is not a Lease or Power Purchase Agreement
- In the case of a UCC-1 Filing, it must be either terminated or subordinated
- Any other mortgage secured to the property used in
financing the solar panel equipment must be subordinated - Appraiser to include the solar panels in the opinion of market value unless financing agreement allows for repossession of the solar panel equipment for default of the financing terms
- Do not include debt in the CLTV ratio
- Include the debt obligation in the DTI ratio
Financed Solar Panels (As Personal Property)
- Title may or may not reflect a UCC-1 Filing. Underwriter to review UCC-1 Financing Statement to confirm that the solar panel equipment is the only loan collateral and treat it as a personal property not affixed to the land or dwelling.
- Appraiser does NOT include solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- Include the debt obligation in the DTI ratio”
- Title may or may not reflect a UCC-1 Filing. Underwriter to review UCC-1 Financing Statement to confirm that the solar panel equipment is the only loan collateral and treat it as a personal property not affixed to the land or dwelling.
- Appraiser does NOT include the solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- Include the debt obligation in the DTI ratio
Owned Free & Clear
- Title reflects no UCC-1 Filing. In the event there is a UCC-1 Filing, it must be released.
- Appraiser to include solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- No debt to include in the DTI ratio
- Title reflects no UCC-1 Filing. In the event there is a UCC-1 Filing, it must be released.
- Appraiser to include solar panels in the opinion of market value
- No debt to include in the CLTV ratio
- No debt to include in the DTI ratio”
Solar FAQ
Follow Agency and Government guidelines. I’ve gotten mixed messages on VA loans. Technically solar is considered a utility bill and VA & FHA both indicate that utility bills shouldn’t be calculated in the DTI.
- The contract will have a TIL disclosure
- The contract will say “you don’t have the option of purchasing the system”. This means it’s not financed
- If it’s on the credit report, more than likely it’s financed, but double check with the contract. Also, if there’s a second lien on the home and being reported on title and credit, it could mean that the client pulled financing from a lender, i.e. Credit Union, in order to purchase SOLAR.
Once we find out that the property has solar, the immediate next step is to get the solar contract. This will tell us if the solar is financed or if it’s being leased (not owned by client).
If it’s being leased, and not owned by the client, then it’s an easy temporary removal of the UCC. Can’t subordinate something that’s not owned.
- Tesla has a website where we can request the contract, UCC Termination and Fannie Mae addendum form that I find extremely helpful and therefore don’t use Title as a middle man.
- Other companies have processes in place where we can request the contract directly from them. It only takes a call to the solar company to find out
- Request from the client or pull from the previous file
- Request from title
- Directly from the client (rare)
- They are recurring clients and I have a good memory
- On the credit report. Many times when the solar is financed, it will show on the credit. For example Mosaic Solar. Huge red flag that property has solar
- Many times the solar shows up as a mortgage. If the lien isn’t attached to the property, we order a credit supplement to correct the type of liability to installment
- From the title report. The UCC/lien will show most of the times on Schedule B. It’s a hit and miss whether the title company actually points it out and therefore imperative that Operation staff review pre-lims.
- From the appraisal report. Does appraiser note if it’s outright owned, leased, or financed?
Solar Companies Contact Information
You can email the UCC filing and borrower authorization to get the release to [email protected] and you will get the termination
The customer has to log into their account on a refi and pay the fee to get the UCC termination, but the link below shows if you are selling, refinancing or have other real estate questions. https://www.tesla.com/support/energy/solar-panels/after-installation/transferring-ownership
Please complete this Online Form for any recorded document termination requests, if you have not done so already.
https://script.google.com/a/macros/sunrun.com/s/AKfycbyM1s7MhD9WOV4KGW9kroTNw0_smr3ALtZJd0FsdI8MXfD9lqJfI8afrrxWITD5VLoK/exec
Please note, you will need the original UCC/California PUC document on hand to complete this form. If you are requesting both a UCC and California PUC removal OR more than one UCC or California PUC, you will need to complete a form request for each document.
If your request is related to a home-sale, please reach out to your Service Transfer Coordinator or the Service Transfer Team at [email protected] as they can process your request.
There are no fees associated with requesting/obtaining a termination document or letter. Again, submit a request form for each document you asking to be terminated. We will record new documents approximately 6 months after the termination has been provided to you.
If you have a removal request for a UCC or a California PUC, please complete this ONLINE FORM. There are no fees associated with requesting/obtaining a termination document.
If your request is related to a home sale, please reach out to your Service Transfer Coordinator or the Service Transfer Team at [email protected].
Mosaic will first require a signed borrower authorization form to be submitted before we’re able to disclose the details of the account. In addition, we will require one of two documents depending on which option above is chosen.
If the loan will be paid off at time of refinance, Mosaic will require a copy of the borrower’s settlement statement (or equivalent) that names Mosaic as a payee indicating that the loan’s outstanding balance will be paid in full at the close of escrow.
If you require a payoff balance, please provide a borrower authorization from the link below and request a payoff statement in a reply to this email.
If a temporary lift/refile is being requested, Mosaic will require documentation of the refinance from the title company or our borrower. Acceptable documentation may include a copy of the executed Uniform Residential Loan Application (form 1003) or other documentation approved through Mosaic Customer Support.
Please do not email documents. Instead, please submit through the following secure upload link: https://joinmosaic.secure.force.com/SecureUpload/?hashCode=NTAwMlQwMDAwMUpOWU01UUFQ