Pennsylvania Special Energy Efficiency Loan and Rebate

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					                       y
                 Pennsylvania's
                 Special
                 Energy Efficiency
                         d   b
                 Loan and Rebate
                 Program
                 Contractor Overview
                 04/15/09




(888) 232-3477       keystonehelp.com
What is Keystone HELP® ?


            • Keystone HELP®, Pennsylvania's special program for
              Energy Efficient Home Improvements now has lower rates
                 d       b t            lt f th Alt     ti E
              and new rebates as a result of the Alternative Energy
              Investment Fund Act (Act 1).
            • Principally supported by the Department of
              Environmental Protection, P
              E i           t l P t ti            l   i T
                                           Pennsylvania Treasury
              Department and the Pennsylvania Housing Finance
              Agency
            • Pennsylvania homeowners can improve the energy
              efficiency of their homes with special financing and rebates
              for high efficiency heating, air conditioning, insulation,
                                   g
              windows, doors, geothermal and “whole house”
              improvements using Home Performance with Energy Star.
History of Keystone HELP ®

            • Lehigh Valley-based energy efficiency lender, AFC First
              started Keystone HELP® with the West Penn Power
              Sustainable Energy Fund in 2005 as an enhanced version
              of AFC First’s EnergyLoan program for higher efficiency
              improvements.
                          y                y    p            p
            • The Pennsylvania Treasury Department helped expand     p
              Keystone HELP statewide in 2006 with a commitment of
              $20 million in lower cost funding, which resulted in lower
              rates to consumers on unsecured loans of up to $10,000.
            • A great success with 3,500 loans and over $19 million
              funded
            • Complete statewide reach with loans made in 65 counties
              and a network of 1,000 AFC First/Keystone HELP Approved
              Contractors.
History of Keystone HELP ®

            • Expanded in late 2007 in cooperation with the
              Pennsylvania Housing Finance Agency with the creation
                                     R&R
              of the Keystone HELP “R&R” Energy Loan for larger
              amounts, up to $35,000.
            • As a result of the Alternative Energy Investment Fund Act,
                      p
              the Department of Environmental Protection has
              committed funds to expand the loan program, reduce
              interest rates and create a new rebate program for high
              efficiency and whole house improvements.
            • Pennsylvania Treasury Department and Pennsylvania
              Housing Finance Agency continue to provide the core loan
              capital.
            • AFC First administers the program providing contractor
              management and training and all loan and rebate
              processing and servicing.
Who is AFC First?

            • Lehigh Valley, PA - based energy efficiency lender founded
              in 1947, processed over 50,000 energy efficiency loan
              applications
            • One of three FannieMae Energy Lenders in the nation, only
              one based in the eastern United States.
                               gy      program in fifteen states from
            • Provides its EnergyLoan p g
              Maine to the Carolinas with over 2,000 Approved HVAC and
              energy efficiency contractors.
            • Administers Connecticut state solar leasing program, CT
              Solar Lease.
            • Focus is on simple, contractor-driven residential and
              commercial energy efficiency programs including training,
              marketing support, education and web integration.
            • In process of creating Great Bear banking platform for
              geographic and programmatic expansion.
How Do Americans Pay to Improve
 Their Homes’ Energy Efficiency?
Two Types of Energy Efficiency Customers


                 REACTIVE         PROACTIVE
Monthly Payment Affordability is often the KEY for
both REACTIVE and PROACTIVE Consumers

           •   Customers may have an interest in more efficient systems
               or improvements but may be put off by higher price.
           •   Average American current available cash is $3,000 to
               $7,000…..What is your average installation cost?
           •        contractor’s                  40%, what s
               If a contractor s closing ratio is 40% what’s happening to
               the other 60% - why aren’t they buying?
           •   Is it the Contractor’s reputation?
           •   Is it the Price?
           •   In today’s economy are they scared of “gimmick” financing?
           •   Or – is it simply that they are not being given an
               affordable monthly payment option that comfortably fits
               their budget and can be offset by energy savings?
The Facts


            •65 to 70% of all Home
            Improvements up to $15,000 are
            financed on monthly payment
            plans
            •90% of improvements greater
            than $15,000 are financed on
                 $ ,
            monthly payment plans
            •Are you giving a monthly
             Are
            payment option to all your
            customers?
REACTIVE Consumer - Welcome to the “Twilight Zone”

             •   Typical “urgent” HVAC or home repair installations
                 ($3,000 to $15,000) are the consumer’s financing
                       g                 g
                 “twilight zone” - too big for a credit card, too small for a
                 home equity loan.

             •   Time sensitive – consumer needs work done ASAP

             •   Contractor-Driven

             •   “Come-on” or “Teaser” (0% for 6 months type) Financing
                 is not the answer for a major capital purchase and can
                 hurt contactor credibility

             •   Borrower wants longer term or lower rate than he can
                 get from bank

             •   Solution: Unsecured point of purchase loan programs
                 with (lower rates based on simple product qualification –
                 ENERGY STAR)
PROACTIVE Consumer - The “Thinker”


            • Larger “whole house” improvements ($5,000 to $35,000)
            • More project driven, less time sensitive
            • Interest Tax Deductibility a bigger deal
            • More customer thought, engagement and foresight
            • Contractor is more a consultant, less a sales person
            • Consumer with home equity can get a good rate from own
              bank, unless state sponsored program is more attractive
            • Consumer with good credit but limited home equity has no
              viable market-based option
                         Home Performance
            • Solution: “Home Performance” model with Energy Audit,
              recommendations and “better than market” financing
Keystone HELP® Addresses Both Reactive and Proactive

             FOR THE REACTIVE ENERGY IMPROVEMENT
              • Low Rate Unsecured Loan - 6.99, 10 Year Term
                   $15 000
                to $15,000 or up to a $250 Rebate (10% of job to $250) for
                ENERGY STAR Improvements
              • Lower Rate Unsecured Loan – 5.99, 10 Year Term to $15,000
                or up to a $500 Rebate (10% of job to $500) for Advanced
                Performance Improvements
              • Secured Loan up to $35,000 – 1st, 2nd or 3rd lien, up to 120%
                                        6.375%
                Loan to Value as low as 6 375%
              FOR THE PROACTIVE ENERGY IMPROVEMENT
              • Lowest Rate Loans – 4.99% Unsecured, as low as 3.875
                Secured plus a $325 Energy Audit Credit for Whole House
                Improvements recommended by Certified Energy Audit that
                predicts a minimum 15% to 25% energy savings (depending
                   home s
                on home’s energy profile)
Keystone HELP® Special Loan Features

            Unsecured Keystone HELP Loans $1,000 - $15,000
            • Lower rates (from 4.99%) and longer terms (up to 10 years) than
              available from banks or credit unions
            • Fixed rate and fixed payment for term – not adjustable like most
              credit cards – no surprises!
                 pre payment
            • No pre-payment penalty – pay off whenever you like
            • Fast, simple, no fees or charges to consumer or contractor


            Secured Keystone HELP Loans                   $5,000 $35,000
                                                          $5 000 - $35 000
            • Lowest rates (from 3.875% for Whole House Improvements) –
              better than bank home equity rates
            • Up to 120% of home’s value – most banks stop at 75%
            • Fixed rate and fixed terms up to 20 years
            • First, Second or Third Lien
Keystone HELP’s Low Monthly Payment Drive Sales

           Compare Keystone HELPs monthly payments to a typical
           consumer’s options for unsecured financing (no mortgage
                            home).
           or lien filed on home)
What’s Better for the Customer – Rebate or Loan?

                 the   t           t    i      h the        t
              If th customer iis not paying cash, th llow rate lloan
              generates almost 20 times more benefit than the rebate
More Energy Savings = Lower Loan Rates and Best Rebate
Important Info

            • All qualifying equipment and material must be new and installed
              by an Approved Keystone HELP Contractor


            • Rebates are available only for projects completed after the
              program’s effective date of Feb 23, 2009, Loans are available
                                                    program s
              only for projects initiated after the program’s effective date of
              Feb 23, 2009.


            • An Eligible Applicant is permitted to receive only one rebate or
              one loan during each fiscal year, which is defined as the period
              from July 1 until the following June 30. Eligible Applicants may
                                                              years,
              apply for additional rebates or loans in future years as long as
              the additional projects comply with the published guidelines
              current at the time of application.
Who is Eligible?

              •Pennsylvania homeowners who:
              •Own and are making qualifying improvements to their primary
              residence located in Pennsylvania and;
              •Whose combined annual household income is $150,000 or less
              •The Keystone HELP R&R ENERGY STAR Loan (or other AFC
              First non Keystone HELP loans) may be available for
              homeowners whose income exceeds $150,000 – please
              contact us for details.
               Improvements                             owner-occupied
              •Improvements must be made to 1 to 2 unit owner occupied
              dwellings. Work under the secured “Whole House Improvement
              Loan” or Renovate and Repair ENERGY STAR Loan programs
              must be done on a 1-2 unit owner occupied, deeded property.
              If you are applying for financing under the Keystone HELP
              program, you must meet the credit eligibility standards of
              the program.
What Improvements Are Eligible?

           •ENERGY STAR rated Heating and Cooling (All Fuels)
           •ENERGY STAR Water Heaters, Fans, Thermostats
           •ENERGY STAR Closed Loop Geothermal
           Above must be listed on energystar.gov or ARI certified as ENERGY STAR

            Solid                      (Wood,     etc.)
           •Solid Fuel Indoor Furnaces (Wood Coal etc ) – 78% AFUE
           •Air Sealing (Whole House) and Insulation to Program Standards
           •ENERGY STAR Windows and Doors
                                       U-Factor < 35
           Must have a NFRC label with U Factor <= .35
           •Certain Non-Solar Alternative Energy Heating and Cooling
           •Recommendations of a Certified (BPI/RESNET) Energy Audit with
           sufficient predicted energy savings

               Entire job can be financed if at least 75% of the work is for eligible
             improvements. Improvements not qualifying for Keystone HELP may be
                 li ibl f     th financing programs at diff
                eligible for other fi  i                          t t       dt
                                                        t different rates and terms.
What Improvements Are Eligible?
Who Can Perform the Work?



           Three Levels of Contractors
           •Approved -
           •Trained
            Certified
           •Certified


           One Level of Auditor
           •Certified
Who Can Perform the Work?


            Approved Contractors have been reviewed for financial and ethical stability
            and are currently authorized to perform work under all rebate and loan
                                  Whole                      Loan
            programs except the “Whole House Improvement Loan” programs.
            Trained Contractors are Approved Contractors who have undergone
            additional training on building science and “Whole House” energy
              p             ,                y
            improvements, and are currently authorized to pperform work under all rebate
            and loan programs. If they are performing work under the “Whole House
            Improvement Loan” program, they must be working under a Certified Auditor
            who provides on-site oversight of their work.
            Certified Contractors are Approved Contractors who have achieved BPI
            (Building Performance Institute) certification or accreditation. BPI is the
            nationally recognized designation for building and energy professionals who
                                                    Whole House             improvements.
            have undergone rigorous training on “Whole House” energy improvements
            Certified Contractors are authorized to perform work under all rebate and loan
            programs.
Who Can Perform the Work?


          Certified Auditors Certified Auditors are Approved Contractors certified by
          both BPI (Building Performance Institute) and RESNET (Residential Energy
          S i       Network) t     d t home energy audits and must have a HERS rater
          Services N t k) to conduct h                  dit    d      th              t
          number, be operating under a HERS provider, or be an approved audit provider
          under the PA Home Energy Home Performance with ENERGY STAR program.
          Ce t ed ud to s ay o          depe de t y o the contractor or they ay
          Certified Auditors may work independently from t e co t acto o t ey may be
          Certified Contractors who have also met the qualifications to perform as
          Certified Auditors.
How Does a Consumer Get a Loan for ENERGY STAR or
ADVANCED PERFORMANCE Equipment?
             •Customer applies online, by phone, by fax or completes the application and
              gives it to their Approved Contractor for submission. We’ll have a quick
              decision on their loan application, and will advise the contractor and consumer of
              their application status.
             •Customer gets an estimate for qualifying improvements from their Approved
              Contractor and signs the Keystone HELP Specification Sheet completed by an
              provided to them by the Contractor that details the qualifying
              improvements.                                                sheet.
              improvements The Contractor faxes or emails us us this spec sheet
             •For an Unsecured Loan for ENERGY STAR, the customers signs the Keystone
              HELP® Retail Installment Agreement, utility bill release form, and auto-payment
              authorization which we will provide to them.
             •For a Secured Renovate and Repair Loan for ENERGY STAR, we will send the
              customer disclosure information and a closing agent will schedule a mutually
              convenient time and location to close their loan.
             •When the work is completed the Contractor completes the equipment information
              (serial #, equipment being replaced etc) on the Completion Certificate and has the
              Customer sign it. The Contractor also signs and faxes back to us.
              We ll                                                                authorization.
             •We’ll call the Customer to confirm and pay the contractor upon their authorization
How Does a Consumer Get a Loan for WHOLE HOUSE
IMPROVEMENTS?

            Same loan process as shown plus these additional steps:
            •   Customer obtains energy audit from a Certified Auditor and
                select improvements from those recommended that predict a
                minimum 25% reduction for an initial HERS index greater than 100
                or a minimum 15% reduction for an initial HERS index of 100 or
                lower.
            •   Customer gets an estimate for selected qualifying improvements
                from a Certified Contractor or a Trained Contractor working under
                the supervision of a Certified Auditor and sign the Keystone HELP
                Specification Sheet h details h          lif i
                S ifi i Sh that d il the qualifying iimprovements.
            •   The Certified Auditor will conduct a post-construction audit
            •   The customer signs the Completion Certificate provided to them by
                the Contractor. We’ll call the customer to confirm and pay the
                contractor upon their authorization and send the customer a
                check for $325 toward the cost of the audit.
How Does a Consumer Get a REBATE for ENERGY STAR
or ADVANCED PERFOMANCE Equipment?

            •   Customer gets an estimate for selected qualifying improvements
                from an Approved Contractor.
            •   When the job is completed the Contractor submits all required
                forms including their signed proposal and customer signed
                completion certificate (completed withserial #, equipment being
                replaced etc)
            •   Customer applies online, by phone, by fax or completes the
                application and gives it to their Approved Contractor for submission
                along with the rest of rebate package
            •   The customer is sent the rebate check with 7 days of receipt of the
                completed rebate package.
What’s New for the Consumer?



           •At time of Application Consumer agrees to:
           •Provide data on your energy usage for completion of the
           ENERGY STAR Home Energy Yardstick or equivalent;
            Grant
           •Grant access to your utility and fuel consumption data to the
           Department of Environmental Protection or its designees for 12
           months from the date of your rebate or loan (not applicable for
           Renovate and Repair ENERGY STAR Loan); and
           •Complete a follow up survey in approximately 12 months from
           the date of your loan or rebate.
What’s New for the Contractor?


             •Assisting consumer in getting energy usage for completion
             of the ENERGY STAR Home Energy Yardstick or equivalent
             can help improve your perception as an energy efficiency
             professional and expedite the loan or rebate
             •You must submit the specification form with your contract
                     g
             outlining the q      y g p
                            qualifying improvements and subscribe to the
             installation standards
             •If you are not BPI certified you must attend one of the one
                 y                                          g
             day “Home Performance 101” courses being held around
             the state to achieve Trained Contractor status and be
             eligible to participate in the program in the future
             •Exposure to “Home Performance” may change your whole
             way of doing business!
Specification Sheet and Completion Certificate
keystonehelp.com
Marketing Materials – New Web Portal Coming Soon
(888) 232-3477 (888 - AFC FIRST)
       keystonehelp.com

				
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