1. Michigan Saves Home Energy Loan Program
Contractor Training

2. Part 1: What is Michigan Saves?2

3. What is Michigan Saves?
Our mission is to make energy improvements easy and affordable.
We provide financing for energy efficiency improvements.
Our financing is a better deal than you’ll find elsewhere, and it’s less of a burden to apply and get approved. Our goal is to give you and your customers the best financing option available in Michigan. 3

4. What can Michigan Saves do for you?
Our financing helps customers purchase improvements from you that they would otherwise couldn’t purchase.
Our financing helps customers purchase a larger scope of work from you than they otherwise could. 4

5. Home Energy Loan Program (HELP)
Easy, affordable loans for homeowners
Immediate loan decisions
Authorized contractors
Qualifying improvements
Easy, affordable loans
The rate is typically 7%. This is better than loans you’ll find elsewhere, which typically have rates of …
The loans have lenient criteria. That means more people will be able to qualify for them than for typical loans.
Loans are approved or denied with one quick phone call, which means you can often know whether or not a person is approved right after making a pitch or signing a contract.
Exclusive program – Customers can only access loan through a Michigan Saves authorized contractor.
We have guidelines for what improvements qualify or not. More on that later. 5 5

6. Nuts & Bolts: Customer Eligibility
Owner-occupied (buildings with up to 4 units)
No rentals or income properties at this time
Loan criteria
Credit Score 640 or higher
Monthly debt to gross income of 50% (post loan)
No bankruptcies, tax liens, outstanding collections 6 6

7. Nuts & Bolts: Loan Terms
Unsecured, up to $30,000
Rates as low as 4.25%
Loans $4,999 or less: Term is 1 year per $1,000
Loans $5,000 or more: Any term to 10 years
Make sure to mention what unsecured means for contractors practically—that more customers will qualify than for conventional loans. 7 7

8. Nuts & Bolts: What Qualifies as Efficient?
Anything with an Energy Star® label is eligible (See Eligible Measures list for information on efficiency requirements)
HVAC measures
Roofing
Windows/doors
Appliances
Solar thermal
Solar PV
Insulated vinyl siding
Solar pool heaters
Air Sealing & Insulation must be financed with Whole Home Energy Audit

9. Nuts & Bolts: Health, Safety & Pre-Existing Environmental Hazards
Michigan Saves will finance remediation of health, safety and pre-existing environmental hazards.
Remediation work must be coupled with an appropriate efficiency measure related to the remediation.
Asbestos remediation with new boiler installation
Knob-and-tube wiring removal with wall insulation
Roof repairs with attic insulation

10. Nuts & Bolts: Our Hope for Contractors
Long term relationship
Shared marketing
Mutual benefits
Info about building a long term relationship, where we highlight the excellent work you do to transform families’ experiences of their homes, and you highlight our role in the process.

11. Nuts & Bolts: Contractor Expectations
Provide high level of professionalism and customer service
Complete 1 loan per calendar year
Provide 1 year warranty on labor
All equipment must carry manufacturers warranty

12. Nuts & Bolts: Michigan Saves Contractor Fee
All authorized contractors charged fee of 1.99% of loan value
Fee supports Michigan Saves operations
For most lenders, fee automatically deducted from contractor payment – no invoicing

13. Nuts & Bolts: Current Lenders

14. Nuts & Bolts: Helpful Resources
Implementation Guide
Eligible Measures List
Program Forms
Marketing Tools
This is the guide you’ll want to get familiar with. It has everything you need to know. We’re going to go through some things together today, but if you ever have questions or need clarification, this can be a useful resource.
All can be found at:
michigansaves.org/resource/contractors-res 14 14

15. Program Results Loan results (through February 2015)
Total loans approved – 4,327 (62% approval rate)
Total loans closed – 4,318 (99% closure rate)
Total value of closed loans - $37,980,529
Average loan size - $8,799
Average FICO score of approved applicants - 739
Average FICO score of all applicants – 696

16. Program Results Contractor participation to date 567 applications
436 applications have been approved
313 Authorized Contractors
169 Mechanical contractors (51%)
94 Building contractors/remodelers (32%)
16 Energy auditors (5%)
12 Home performance contractors (5%)
21 Solar PV contractors (7%)
1 Electrical Contractor

17. Part 2: Loan Application Process17

18. Process Details: MSU Federal Credit Union
Uses a merchant lending model:
Contractor fills out paperwork, submits electronically to MSUFCU who provides instant decision
Upon project completion, contractor prints out loan documents for customer’s signature
Contractor – in effect – issues loan to customer, then resells loan to MSUFCU
MSUFCU pays contractor through direct deposit
Contact Stephanie Minott for details ( )

19. 4 Step Process
Explain role of the Loan Application Center here (not in great detail, as that will become clear in next two slides, but enough to understand them as an intermediary that helps in the process.)

20. 1 Secure the Job. Customer and contractor agree on a work scope.
Customer identifies Michigan Saves authorized contractor from website or contractor promotes program to customer
Contractor provides information on Michigan Saves loan and initiates loan application process
Customer provides information to loan application center and receives decision within minutes
Loan application center passes completed and approved loan application to lender, which may conduct income verification
Contractor uses own contracting process to secure job
Contractor initiates application process.
Customer calls loan application center.
Loan application center passes completed application to lender.

21. 2 Do the Work. 1 Secure the Job. Contractor begins work.
While work is in progress, customer completes membership application, if not already a member
Upon completion of the work, contractor obtains customer’s signature on certification of completion and sends to lender, which triggers loan closing
Customer becomes member of credit union.
Contractor completes work.
Contractor sends Certificate of Completion to Lender.

22. 3 Get paid. 1 Secure the Job. 2 Do the Work.
Lender prepares closing documents for customer.
Loan initiation.
Lender prepares final loan documents and arranges for closing; Customer signs loan closing documents
Upon receipt of signed loan documents, lender pays contractor directly while customer begins monthly payments on the loan
Customer signs loan closing documents.
Lender pays contractor directly.
Customer begins monthly payments.

23. 4 Submit Forms. 1 Secure the Job. 2 Do the Work. 3 Get paid.
Contractor completes project record.
Submit Michigan Saves Forms.
Contractor completes project record (aka “spec sheet”) through Michigan Saves Online Contractor Portal.
Contractor submits project record.

24. 1
Secure the Job. 2
Do the Work. 3
Get paid. 4
Submit Forms.

25. Process Details: Loan Application Center
Contractor accesses loan application center using Michigan Saves contractor identification #
Provide number via phone or through Web portal
Set of 10 cards and ID nos. sent upon completion of application & training

26. Process Details: Loan Application Website

27. Process Details: Loan Application Website

32. Process Details: Credit Insurance
Offered with every loan through loan application center
Protects customer’s credit score in the event that they cannot pay off the loan due to death and disability
Fee can be 10-30% of amortized loan amount
Only available to customers under the age of 71
Automatically ends the month of the customer’s 71st birthday
This is an optional insurance product that a customer can choose to accept or deny 32

33. Process Details: Loan Approval
CONGRATULATIONS! Your application has been approved. A loan representative will contact you by the next business day with closing information. We here at Central Macomb Community Credit Union value your membership and welcome this opportunity to serve you. Thank you for choosing Central Macomb Community Credit Union for your financial needs.
**If the loan amount is above $3,000 or if your credit score is below 720, verification of income will be required.
Note for Contractor:  Please mail the certificate of completion to:
Central Macomb Community Credit Union
34642 Van Dyke Ave.
Sterling Heights, MI 48312
NOTE: Copy of certificate of completion also sent to Michigan Saves

34. Process Details: Loan Denial/Pending
“Unable to honor request” messages always means that the customer does not qualify for Michigan Saves loan.
Example:
Thank you for applying with Central Macomb Community Credit Union. We have processed your application and are unable to honor your request at this time. A notice will be mailed to you indicating the reason for this decision.
“Application being processed” or “Someone will call you back” message may mean
Customer not approved, but not denied either
Customer has been victim of identity theft, flag on credit report
They are self-employed (lender doing income verification)
Example : Thank you for applying to Central Macomb Community Credit Union. Your application is being processed. A representative will be responding to you shortly. We appreciate the opportunity to serve you.

35. Process Details: Submitting Forms
Project Record (a.k.a. Specification Sheet)
Exists in Online Contractor Portal (OCP)
Home & project specifications
Certificate of Completion (COC)
Signed by customer and contractor
Affirms that job has been satisfactorily completed and provides customer information release
Mailed to lender at the address provided during initial loan approval
Receipt by lender triggers loan closing and contractor payment
Scan and attach to project Record
Most lenders will hold off on loan closing documents until CoC is received. Expect payment within 14 days or less.
Approval will not be reversed unless customer has been fraudulent.
Consider one document with spec sheet 35

36. Review of Online Contractor Portal

37. Part 3: Quality Assurance37 37 37

38. Quality Assurance Objectives
Verify that there are no fraudulent or misleading actions
Confirm customer satisfaction
Verify that program requirements are met 38 38

39. QA Methods Review documentation Periodic site inspections
Customer surveys
Coordinated with other programs (utilities, BPI), where possible, to avoid overlap

40. Michigan Saves Role File Review
Review Project Record/Spec Sheet
All information included for installed and removed measures
All measures eligible under program
All diagnostics testing results included where appropriate
Review Certificate of Completion
Dated, signed by customer and signed by contractor
Flag projects that violate program requirements 40

41. Michigan Saves Site Inspection
Michigan Saves schedules site visit with homeowner
Site inspection
Installed measures match items on specification sheet
Measures are installed to manufacturer guidelines or best practices
Confirm customer satisfaction
Replicates ‘test-out’ procedures (assessment-based only)

42. Deficiencies
Michigan Saves sends Corrective Action Request (CAR) to contractor
Three types: Safety, Workmanship, Programmatic
If safety or workmanship CAR then contractor must document actions to fix the issue.
Contractor must respond to CAR within designated timeframe
Michigan Saves makes determination of contractors status
Enhanced Supervision, Suspended or Terminated

43. Safety CARs Must be resolved within 48 hours! Examples:
Electrical, fire, or structural hazards were part of the installation.
Failed combustion safety testing results.
Gas leaks located.

44. Workmanship CARs Examples: Poor workmanship
Test-out diagnostics incomplete or inaccurate.

45. Programmatic CARs Examples:
Failure to submit Certificate of Completion or Specification Sheet in a timely manner.
Financing of non-qualifying measures.

46. Part 4: Marketing Michigan Saves
When fully operational…available to all types of energy consumers
Michigan Saves finances qualifying energy improvements
Loan capital provided by network of lenders through a centralized loan application center
Loans serviced by lenders (utility on-bill programs in some cases)
Michigan Saves uses $6.5 million trust fund for credit enhancements to attract lender/investor capital at affordable rates and terms

47. Key Marketing Messages
EASY
Convenient
Fast
Seamless
AFFORDABLE
Save money and energy
Flexible repayment terms
Low interest rates
SMART
Save energy and environment
Make wise investment
Improve comfort
Help Michigan’s economy
EASY
• Convenient—Find an authorized contractor and they’ll do it all, or your contractor will suggest a Michigan Saves loan to you. The loan application can be completed in your home during the contractor visit.
• Fast—The loan application process is fast and we only collect a minimal amount of information. The application process is “Easy As 1-2-3” and you’ll have a decision in minutes.
• Seamless—The contractor will help make the loan process even easier by showing you how to apply and providing you with support.
AFFORDABLE
• Save Money and Energy—With the Michigan Saves Home Energy Loan Program, there is no upfront cost, and over time you’ll be saving energy in your home. You’ll have more money in your pocket faster by investing in energy improvements today.
• Flexible Repayment Terms—Your payments can be structured to match your available budget.
Low Interest Rates—For qualified homeowners, these are lower than market rates for unsecured loans. There are no property appraisals needs or home equity required.
SMART
• Save Energy—A Michigan Saves Home Energy Loan will help you quickly save energy in your home. You’ll be contributing to a healthier environment and investing in your biggest asset at the same time.
It’s A Wise Investment—Energy-saving investments improves your bottom line—and your energy bills.
You’ll Be More Comfortable—Making energy efficiency improvements means your home will be more comfortable.
Helping The Economy—You’ll be supporting job creation here in the State of Michigan.

48. Rack Card
Can be used as leave-behind or direct mailer 48

49. Case Studies

50. More than 400 authorized commercial and residential contractors

51. HELP Program Updates Lower Interest Rates
UP State Credit Union – %
Coming soon - Washtenaw Federal Credit Union
0% finance for 48 months will be available 4/1 in the overlapping Lansing Board of Water & Light electric service territory and Consumers Energy gas service territory 51 51

52. BEF Program Business Energy Financing Program
Leases from $2,000 to $250,000
0% for 24 months, up to $50k is currently available in DTE, Consumers Energy or Lansing Board of Water & Light Service Territory
Training is every 4th Thursday of the month 52 52

53. Questions and Comments
For all contractor questions, concerns, and feedback, contact Kait Wyckoff or Todd Parker
Kait – (517)
Todd – (517)
We welcome your suggestions!
Please follow us on Facebook & Twitter!
@MichiganSaves 53 53