New county loan program helps owners make properties more energy-efficient

Sonoma County?s new Energy Independence Program ? SCEIP ? got off to a big-money start last week, taking applications for more than $451,000 during the first three days of the program.

Five property owners filed applications for loans totaling $264,000 on the first day alone to fund improvements that will conserve or generate energy. By weeks end, 181 applications were submitted for $451,538 in projects. It?s the first countywide program of its kind in California, and local officials want to use all $100 million available in the loan program within a year.

First day loan applications ranged from $10,000 to $137,000, Sonoma County Controller Rod Dole said. Interest rate on the loans is set at 7 percent.

If tax-exempt bonds can be sold to support the loan program, the interest rate will be lowered by 1 percent to 2 percent for new and existing loans.

Interest on the county loans to homeowners should be deductible from federal taxes, he said. Rebates and tax credits are available to reduce the cost of many energy-related improvements.

The first step is to complete an online energy-efficiency evaluation ? available at the web site www.sonomacountyenergy.org ? to assess the cost of improvements versus the savings. Commercial property owners are required to obtain a free PG&E onsite energy audit as part of the loan process.

Here?s what you need to know to get started:

Q: How does SCEIP work?

A: Property owners apply for the program, describing the energy and/or water saving improvement

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they wish to make. If approved, the county and the property owner enter into an assessment contract, through which the county pays the up-front cost of the improvements. The county places an assessment lien on the property, and the property owner repays the loan as an assessment on his or her property tax bill over a 5-, 10- or 20-year period.

Q: Who can participate in SCEIP?

A: Any residential, commercial or industrial property owner in Sonoma County.

Q: What can be financed with SCEIP?

A: Improvements must be permanently affixed to the property. They include: high efficiency windows, solar or tankless water heaters, solar panels, upgraded wall and roof insulation and ?smart" irrigation systems. Owners may also propose improvements that are not on the list as custom applications, which will be reviewed on a case-by-case basis.

Q: How does a property owner apply for SCEIP?

A: Applications may be obtained at the SCEIP storefront at 404 Aviation Blvd. or online at www.sonomacountyenergy.org.

Q: How much financing is available? What are the terms?

A: The minimum advance is $2,500. Amounts from $2,500 to $5,000 will be set for repayment in 5 or 10 years. Projects over $5,000 may be repaid over a term of either 10 or 20 years. Projects of $60,000 up to $500,000 will require approval by the program aministrator, and projects valued at $500,000 and up will require approval by the Board of Supervisors.

Q: What if the improvements are a mixture of repairs and energy improvements?

A: Repairs and/or new construction outside the improvements do not qualify. If repairs need to be done as part of the project, the owner must pay for them.

Q: When does the county place the lien on the property?

A: The lien is placed at the time the assessment contract is signed.

Q: What happens if a borrower can?t make the payments?

A: Failure to pay the SCEIP assessment would be just like failing to pay property taxes. Penalties and interest charges would apply until the assessment is paid. The county would, ultimately, have the right to foreclose on the property.

Q: How does SCEIP financing differ from a regular home equity loan?

A: SCEIP qualification is easy and simple; financing is not restricted by a rigid formula related to value nor is it based on the owner?s annual income; assessments do not appear on the borrower?s credit report and they are paid semi-annually along with property taxes.