Selling · Fannie Mae B2-3-04Selling a house with solar panels: owned, leased, PPA or financed

On a Fannie Mae loan, the solar panels' ownership and financing decide how the buyer's lender treats them, and the lender must find out – from the credit report, the title report and the documents the parties provide. Panels owned outright (a cash purchase, included in the home price, paid off, or secured by the existing first mortgage) follow the standard rules. Panels financed through a PACE loan make the home ineligible unless the PACE loan is paid in full at or before closing. Separately financed panels: the debt counts in the borrower's DTI; if a UCC fixture filing is recorded in the land records the panels can add value (if they cannot be repossessed), count in the CLTV, and a filing senior to the mortgage must be subordinated; if they are collateral for a loan that does not appear on title, they add no value. Leased panels or a power purchase agreement (PPA): the lender reviews the lease or PPA; the panels add nothing to the appraised value; the monthly lease payment counts in DTI unless it is a fixed payment for a set amount of energy with a production guarantee, and PPA payments based only on energy produced can be left out; a precautionary UCC filing covering only the equipment is acceptable. The home must keep access to another source of electricity, and the agreement must make the solar owner repair any damage from the panels, keep it off the homeowner's insurance as loss payee, and give the lender options at foreclosure. If ownership cannot be documented, the panels get no value without a UCC personal property search.