PORTLAND, Ore.–The non-profit CDFI Craft3 reported that Self-Help Credit Union in Durham, N.C. has purchased an additional $6.4 million On-Bill Repayment (OBR) single-family, energy-efficiency improvement loans.
The new deal reflects the strong performance of a $15.7-million OBR portfolio transaction between the two community development financial institutions in 2013, according to the two organizations.
“This second sale is more strong evidence that OBR loans perform extremely well while providing homeowners affordable, inclusive, energy-efficiency financing,” said Craft3 President John Berdes. “Our hope is to prove OBR loans as a model for expanding access to energy-efficiency and for these secondary market sales to increase liquidity for these loans.”
According to Craft3, the 2013 OBR portfolio’s performance, including a historic total loan loss of less than 1% and high repayment rates, enabled Self-Help to purchase more OBR loans, providing more capital to Craft3 to put even more money to work making loans. It also allowed Self-Help to expand its loan purchase criteria to include all credit scores, Craft3 said.
“After all the work on the first purchase balancing Craft3’s OBR innovations while creating a viable secondary market transaction for such products, this second deal is all the more gratifying,” said Self-Help’s Director of Commercial Lending, Brian Schneiderman. “The affordability of energy-efficiency improvements like high-efficiency furnaces has been a real barrier for many families. Helping prove OBR programs can expand energy efficiency to families of modest means is a huge leap forward.”
Since 2009, Craft3 has partnered with Enhabit (formerly Clean Energy Works) to provide consumer energy-efficiency loans to Oregonians. Craft3’s OBR allows homeowners to make loan payments through their monthly utility bill. OBR also allows Craft3 to review a homeowner’s utility bill payment history as a factor in loan qualification. Using a blend of traditional and non-traditional underwriting techniques, Craft3 has approved loans to over 87% of homeowners who apply.
Concurrently, the program helps build a network of contractors with increased green expertise and creates local jobs in this sector. To date, Craft3 said its partnership with Enhabit’s has helped 2,659 Oregon homeowners finance $35.7 million in energy-efficiency upgrades. “These homeowners avert more than 6,800 metric tons of greenhouse gasses annually. Overall the program has catalyzed more than $40.9 million of local economic activity, reduced carbon emissions, created jobs for local contractors and reduced home energy use,” Craft3 said.
Cumulatively, Self-Help has made $249 million in direct loans to sustainable businesses, nonprofits, and community facilities. Loans span a range of uses including energy efficient buildings ($137 million), utility-scale solar farms ($76 million), recycling businesses ($15 million) and healthy foods systems ($14.5 million).