New York State Energy Research and Development Authority (NYSERDA) Loan Loss Reserve Program 

The Loan Loss Reserve Program under NYSERDA creates opportunities for qualified financing lenders to tap into the clean energy sector by covering a portion of losses on defaulted loans, effectively expanding the clean energy financing options available for building owners hoping to access loans for clean energy and energy efficiency improvements. 

  • Program Opportunity Notice 4378 – Loan Loss Reserve to Catalyze Clean Energy Financing in New York State Communities 

    • NYSERDA requests applications from financial institution entities for their annual program, “Loan Loss Reserve to Catalyze Clean Energy Financing in New York State Communities”, which provides accessible climate financing solutions to support the adoption of qualified energy efficiency improvements and renewable energy system installations in residential (1-4 dwelling units), small commercial (100 employees or less), not-for-profit, and multifamily (5+ unit) buildings located in New York State Communities. NYSERDA qualifies financing lenders that respond to this solicitation—including local and regional banks, community-based lenders, and other financial firms—that will develop financing products related to energy efficiency upgrades for residential, multifamily, small businesses and non-profit organizations are eligible to apply. $10 million is available for this program annually. The Loan Loss Reserve will provide up to 90 percent reimbursement for defined losses on individual transactions. 

  • Illustrative Guidelines for Eligible Technologies 

    • This program document provides a non-exhaustive list of eligible clean energy technologies and energy efficiency improvement measures to new and existing buildings that could be financed by participating lenders in the NYSERDA Loan Loss Reserve Program. In residential homes, which encompasses the manufactured homes in the state, eligible projects include primary heating and cooling system replacements, building envelope improvements, and projects using technologies eligible for financing through NYSERDA’s Assisted Home Performance with ENERGY STAR Program and Residential Financing Programs. 

Michigan Saves Residential Program 

Michigan Saves, the nation's first non-profit green bank, offers affordable, accessible financing for energy efficiency and clean energy improvements. Homeowners and landlords work through authorized contractors to apply for an unsecured loan offered by a network of credit unions around the state. Michigan Saves provides the credit union lenders a credit enhancement in the form of a loan loss reserve to help mitigate risks, which allows lenders to offer financing to those that otherwise may not qualify for traditional credit at affordable rates and longer terms. Customers may apply for up to $100,000 loans, with terms of up to 15 years or longer. Michigan Saves financing is available for owners of manufactured homes and trailers, even if the home sits on a rented lot. From 2010 through 2022, Michigan Saves has supported over $375 million in clean energy financing improvements for residential customers. Almost 60 percent of the loans have been originated in low-to-moderate income communities, and each dollar of public funding leverages $30 in private capital.

The loan loss reserve is funded through a grant from the Michigan Public Service Commission and an American Recovery and Reinvestment Act grant awarded to the Michigan Energy Office by U.S. Department of Energy.

  • This sample residential loan loss reserve fund agreement, developed by Michigan Saves, defines the structure of the loan loss reserve and contractually obligates the participating lender to adhere to program requirements on underwriting and compliance, loan administration, borrower consent to information sharing, and monthly reporting. 

  • This request for proposal issued by Michigan Saves calls for loan servicers and loan origination providers to support the implementation of an on-bill loan program. The outlined responsibilities of contracted loan origination providers include reviewing financing applications and communicating with applicants about approval status, obtaining tenant utility data access authorization, verifying applicant property ownership, ensuring adherence to federal and state lending regulations, and more. 

Connecticut Smart-E Loans - Inclusive Prosperity Capital 

Smart-E Loans are a unique, proven loan product that makes clean energy home improvements more accessible to homeowners, including low-income and credit-challenged borrowers in the state of Connecticut. The Smart-E Loan platform, administered by Inclusive Prosperity Capital, includes a standardized product offered through a network of local lenders and vetted contractors that is easy to adopt to new markets. The Smart-E Loan loan product can be used to finance over 40 eligible green energy home improvement projects, making it ideal for use in solar, strategic electrification, weatherization, and resilience campaigns. Contact the team at Inclusive Prosperity Capital at SmartE@Inclusiveteam.org to learn about how you can offer the Smart-E Loan anywhere in the country.

Additional Resources 

A report authored by the National Renewable Energy Laboratory (NREL) on increasing the access to capital markets for clean energy projects, with an overview on innovative credit enhancement mechanisms and loan products that mitigate risk and attract interest among non-traditional lenders.  

DOE has compiled sample program documents for administering a loan loss reserve program, including the sample Michigan SAVES loan loss reserve fund agreement linked above as well as a template agreement demonstrating how to address the deposit and use loan loss reserve money.

Guidance on helpful terminology to use while developing clean energy loan products with financial institution partners, including a sample loan term sheet and underwriting criteria document. 

A DOE-sponsored report for the State and Local Energy Efficiency Action Network on the data and administration needs, the stakeholders and actors, and the administrative challenges faced by energy efficiency financing programs. 

This NASEO-authored report from March 2024 offers program implementation guidance for designing a loan loss reserve fund that supports affordable financing of energy-efficient manufactured housing, based on the State Program examples highlighted below.