Description
The Michigan Department of Environment, Great Lakes and Energy is seeking information to better understand best practices around financial products and lending practices for energy efficiency projects. The department has received funding from the federal Department of Energy to capitalize residential and commercial loans and grants for energy efficiency measures. The purpose of this Request for Information (RFI) is to collect market information and understand the attractiveness of a co-lending model to lenders. The RFI includes three term sheets that describe possible outlays of responsibilities for program lenders and the state of Michigan. The department is seeking feedback on the program's attractiveness to lenders, potential barriers or drawbacks, and suggestions for changes.
Some key points to consider include:
• The program's objectives, such as maximizing loan volume and leveraging private capital
• The types of borrowers and loan products that could be used for energy efficiency improvements
• The typical borrower loan underwriting criteria and mechanisms for underwriting medium- or high-risk borrowers
• The potential benefits and drawbacks of a loan loss reserve (LLR) or subordination model
• The proposed reporting requirements and any concerns with regard to federal compliance
• The potential for collaborative partnerships and the impact on risk minimization