As part of our occasional series on solar financing products, we’re taking a look at Maryland’s “Be SMART” home loan program. The loan is offered by the Maryland Department of Housing and Community Development (MD DHCD). This loan is unsecured, meaning it is not backed by collateral. It is available for the replacement and upgrade of appliances, energy efficiency measures, and renewable energy upgrades.
- Maximum loan amount of $30,000
- 4.99% interest rate for 10 year term
- Credit score of 640 or greater
- Debt-to-income ratio of up to 50%
To apply for the Be SMART loan, DHCD requires the homeowner to have an energy audit before filling out the application form and providing supporting documentation. This includes a copy of valid identification, recent pay stubs, and mortgage statements, as well as other materials.
How do I figure out what loan financing is right for me?
Not all consumers are attracted to the same kinds of loan product characteristics and terms. Here are some questions to ask when looking at different financing products to help you compare and figure out what works for you:
- What is the term of the loan?
- What is the interest rate, and is it fixed for the entire term of the loan?
- Are there penalties for pre-payment? (If pre-payments are allowed you can use the additional savings from your energy costs, your federal tax credit and your SREC payments to pay down the loan more quickly.)
- Is the loan secured against my property or unsecured?
- Will the combination of my loan payments and my remaining utility bill be higher, the same or lower than what I pay right now for electricity before solar?
Do you know of other finance products for solar that you’d like us to highlight? Email us at [email protected].