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Holland Energy Fund
On-Bill Loan Program
Implementation Guide
March 2017
Version 1.7
CONTENTS
DOCUMENT HISTORY ...................................................................................................................1
INTRODUCTION .............................................................................................................................2
Purpose .................................................................................................................................................................................... 2
About the Holland Energy Fund ....................................................................................................................................... 2
Using this Program Implementation Guide ................................................................................................................. 3
SUMMARY OF THE ON-BILL LOAN PROGRAM ..........................................................................3
LENDING REQUIREMENTS ...........................................................................................................6
Overview .................................................................................................................................................................................. 6
Program Scale ........................................................................................................................................................................ 6
Customer Eligibility .............................................................................................................................................................. 7
Loan Application Process .............................................................................................................................................. 7
Credit Enhancement ....................................................................................................................................................... 8
Loan Origination .............................................................................................................................................................. 8
Loan Closing and Servicing ........................................................................................................................................... 9
Fees ....................................................................................................................................................................................... 9
ELIGIBLE IMPROVEMENTS ......................................................................................................... 10
Comprehensive Energy Assessment ............................................................................................................................. 10
Eligible Measures List ........................................................................................................................................................ 10
Renewable Energy Measures .......................................................................................................................................... 11
Non-Energy Building Performance Improvements .................................................................................................. 11
AUTHORIZED CONTRACTORS .................................................................................................... 12
Contractor Training ............................................................................................................................................................ 12
Michigan Saves Fees Assessed to Contractors .......................................................................................................... 12
BILLING AND PAYMENT ............................................................................................................. 13
Contractor Payment........................................................................................................................................................... 13
Customer Loan Closing and Payment .......................................................................................................................... 13
Customer Rebates .............................................................................................................................................................. 13
CUSTOMER INQUIRES ................................................................................................................. 13
MICHIGAN SAVES ONLINE PORTAL .......................................................................................... 14
QUALITY ASSURANCE ................................................................................................................. 14
EVALUATION, MEASUREMENT AND VERIFICATION .............................................................. 14
MARKETING .................................................................................................................................. 15
City of Holland Home Energy Retrofit Program Marketing Efforts .................................................................... 15
Michigan Saves Marketing Efforts ................................................................................................................................. 15
PROCESS TO AMEND ON-BILL LOAN PROGRAM .................................................................... 15
APPENDIX A: GLOSSARY ............................................................................................................. 17
APPENDIX B: ELIGIBLE MEASURES LIST ................................................................................... 18
APPENDIX C: ALTERNATIVE PROGRAMS FOR FREE OR LOW-COST HOME
WEATHERIZATION ....................................................................................................................... 19
APPENDIX D: REBATE PROGRAMS ............................................................................................ 21
Holland Board of Public Works (HBPW) ....................................................................................................................... 21
City of Holland...................................................................................................................................................................... 21
SEMCO ENERGY Gas Company ........................................................................................................................................ 21
APPENDIX E: HEF CREDIT APPLICATION .................................................................................. 22
APPENDIX F: HEF LOAN AGREEMENT ...................................................................................... 23
APPENDIX G: MEMORANDUM OF ON-BILL FINANCING ....................................................... 24
APPENDIX H: DISCHARGE OF MEMORANDUM AND NOTICE OF ON-BILL PAYMENT
AGREEMENT ................................................................................................................................. 25
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
1
DOCUMENT HISTORY
Version Date Nature of Revisions
1.0
December 31, 2015
Initial Implementation Guide
1.1
1.2
January 5, 2016
May 6, 2016
Updated to reflect the proper language for the unsecured loan offered
by the program and addition of Process to Amend.
Interest rates added
1.3
November 18, 2016
Updated Appendix B: Eligible Measures List
Added Loan Application
Updated Loan Agreement
Added Memorandum of On-Bill Financing
Added Discharge of Memorandum and Notice of On-Bill Payment
Agreement
1.4
December 19, 2016
Updated Memorandum of On-Bill Financing
1.5
February 17, 2017
Updated Memorandum of On-Bill Financing
1.6 February 28, 2017 Updated Discharge of Memorandum
1.7
March 31, 2017
Clarified interest rate and loan term relationship table. Clarified billing
due date. Revision to Michigan Saves role.
This report is available on the City of Holland’s website (www.cityofholland.com/hef) and for review at the
office of the clerk at 270 S. River Avenue, Holland, MI. Tim Vagle, President of the Holland Energy Fund,
is the city official authorized to enter contracts on behalf of the Holland Energy Fund under the 2014
Michigan Municipal Utility Residential Clean Energy Program Act (PA 408).
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
2
INTRODUCTION
Purpose
This implementation guide outlines the details and requirements of the Holland Energy Fund (HEF) On-
Bill Loan Program, which provides easy, affordable loans from the HEF to City of Holland homeowners for
qualifying energy efficiency and renewable energy improvements. Customers pay back the loan through a
per-meter charge on their Holland Board of Public Works (BPW) bill for electric services. The loan
payment is considered part of the charges for electric services to the property.
The guide serves as a reference for anyone that wants to learn more about the On-Bill Loan Program,
including customers and contractors. This guide fulfills the report requirements under the 2014 Michigan
Municipal Utility Residential Clean Energy Program Act (PA 408).
About the Holland Energy Fund
Holland Energy Fund, Inc. was incorporated as a nonprofit corporation to facilitate and finance aspects of
the City of Holland’s comprehensive, long-range Community Energy Plan to become a world-class leader
in energy security, affordability, sustainability, and efficiency.
The plan includes several large-scale projects. One such project is to substantially increase the energy
efficiency of Holland’s 7,400 single-family homes. Energy efficiency investments are a cost-effective
means to decrease energy consumption, enhance building comfort, and reduce utility bills.
Despite the benefits of energy efficiency investments, high up-front costs can be a significant barrier to
investing in home energy improvements. A program that allows customers to repay financing for these
improvements (by adding incremental payments to their utility bills) is one way to overcome this cost
barrier.
On-Bill financing generally refers to a financial product that is serviced by, or in partnership with, a utility.
The energy efficiency improvements are repaid by the homeowner on his or her monthly utility bill.
During a meeting of 28 stakeholders on June 11, 2015, the following goals were developed and agreed
upon for the Holland Energy Fund’s On-Bill Loan Program:
Strengthen Community and Neighborhood by
1. encouraging deep energy savings (environment);
2. increasing access (equity); and
3. administratively operating in a cost-effective manner (economic).
Objectives to achieving goals include:
• Encouraging deep energy savings: The program provides a mechanism to attract home-
owning participants that need multiple energy savings measures. To achieve deep energy
savings (30 to 50 percent), the project size will be relatively large and expensive, relatively time-
consuming (audit, multiple measures installed, etc.), and will require a contractor that specializes
in home performance. Financing with affordable rates and long terms offered by this program
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
3
ease the high-cost burden. The program also offers well-trained home performance contractors
that make the process easy and streamlined.
• Increasing access: People with tarnished credit rarely pass credit checks required by most
lenders. Renters and homeowners who don’t plan to stay for a long time currently have no
incentive to invest in energy upgrades (obligation is tied to them, and they will be long gone
before debt is paid). Landlords who don’t pay the utility bills may not want to invest in energy
efficiency improvements because the tenant pays the utility bill, and the landlord sees little to no
financial benefit. To overcome these barriers, the On-Bill Loan Program offers expansive, non-
traditional underwriting criteria. Utility bill payment history is used for underwriting (which is
proven to increase approval rates) and the obligation is tied to the property to allow for transfer to
subsequent occupants.
• Administratively operating in a cost-effective manner: Administering financing programs can
be burdensome, time-consuming, and costly. To address this barrier, the program simplifies and
leverages existing programs and systems where possible (e.g. using bill payment history for
underwriting, utilizing the Michigan Saves contractor network, working with an entity experienced
in originating and servicing on-bill financing). Interest rates will be set to ensure the sustainability
of the On-Bill Loan Program. Other rebates, incentives, and grants may be available through the
Holland Energy Fund, utility rebates, and other City of Holland programs; these would reduce the
interest rate and/or the amount to be financed.
There are currently other residential financing mechanisms for customers that want to make energy
efficiency improvements; these include the Michigan Saves program, home equity loans, credit cards,
and personal loans. There are also options available from the Michigan State Housing Development
Authority for homeowners with equity in their home, an annual household income of up to $105,700, and
a credit score of at least 620.
Using this Program Implementation Guide
This guide is written in a conversational way, reflecting the manner in which industry professionals refer to
efficiency measures or efficiency programs. As a result, there are instances where terms are used
interchangeably, such as the terms “audit” and “assessment.” A glossary of commonly used terms is
provided in Appendix A.
This guide represents the best and most accurate information on the On-Bill Loan Program as of the
date on the front cover. A summary of changes to each version of this guide is recorded after the table
of contents.
SUMMARY OF THE ON-BILL LOAN PROGRAM
Under the Holland Energy Fund On-Bill Loan Program, owners of residential buildings (four units or less)
within the City of Holland can finance any eligible energy efficiency improvement; the improvement must
be implemented by an Authorized Contractor following the completion of a comprehensive, whole-home
energy audit. Eligible energy efficiency improvements include any measure or piece of equipment that
has energy savings documented in the Michigan Energy Measures Database (MEMD)—such as air
conditioners, air sealing, air source heat pumps, appliances, boilers, doors, furnaces, geothermal
systems, insulation, roofs, skylights, water heaters, and windows. (See Appendix B for the full list of
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
4
eligible measures.) The loan program can also be used for renewable energy measures like solar PV
systems and solar thermal systems, provided that the property has achieved a Department of Energy
Home Energy Score of 8 or above. HEF will also finance the remediation of pre-existing environmental
hazards or the repair of physical and structural defects that create health and safety issues, so long as
the remediation or repairs necessary to allow for an appropriate efficiency measure and the cause(s) of
the environmental hazard or physical defect are addressed.
Loans under this program are secured loans for amounts of $5,000 to $30,000 at a fixed-rate interest with
terms of up to 180 months (15 years). Details are provided in Table 1.
Table 1. Loan Product Details
Structure/Minimum Standards
Eligible Properties
Single-family (1–4 unit) homes within the City of Holland
Loan Type
Unsecured loan that may be added to your tax bill and enforced against
the Property through the tax lien foreclosure process in the same
manner and with the same priority as the charges for your electric
service and real property taxes. Notice of the loan is recorded with the
register of deeds for the county in which the property is located, and the
obligation to pay the loan payment runs with the land and is binding for
future customers contracting for electric service to the property.
Multiple loans per customer are allowed if the total amount financed
does not exceed the maximum allowable loan amount (below). Multiple
loans will be consolidated into one loan at the interest rate(s) in the
effect at the time of issuing the additional loan.
Repayment Mechanism
Customers will pay back the loan through a per-meter charge on the
monthly BPW bill for electric services. The payment is considered part of
the charges for electric services to the property.
Eligible Improvements
Energy-saving home improvements list in the MEMD and installed by an
Authorized Contractor following the completion of a comprehensive
whole-home energy assessment.
Loan Amounts
$5,000 - $30,000
Loan Term
15 years or life of the measure, whichever is less.
Loan Rates
Not to exceed prime plus 4.0% or 6.99% APR, whichever is less. Fixed
rate with no prepayment penalty. Loan rate is set periodically by the HEF
Board of Directors and may be tiered as in the chart below. Final APR is
dependent on loan amount and length of loan.
Loan Rates
Term Interest Rate
4.99%
5.99%
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
5
Key Underwriting Criteria
Twelve consecutive months with no delinquencies on electric utility bill
payment history, no delinquent taxes, no bankruptcies, foreclosures or
repossessions greater than $1,000 within three years (from discharge),
and no unsatisfied money judgements.
Loan Agreement
Loans are made directly by the Holland Energy Fund to the customer.
Numerous organizations are involved in this program—from the program’s marketing to the installation
and financing of improvements and program monitoring. Roles of key entities, which are referenced in
this guide, are summarized in Table 2.
Table 2. Entities Involved in Implementing the On-Bill Loan Program
Entity
Roles
Customer/Homeowner
Select Authorized Contractor for improvements and apply for loan
City of Holland
Develop, market, and administer a Home Energy Retrofit Program
Coordinate marketing efforts of the Home Energy Retrofit Program
with stakeholders (including Michigan Saves and Holland BPW)
Holland BPW
Offer utility energy optimization programs with customer incentives
Promote loan program to customers and provide support (e.g.,
customer service, contractor outreach)
Bill customers
Collect loan payments
Holland Energy Fund (HEF)
Provide loan capital
Pay installation contractor upon completion of work
Hold loan agreements with customers
Record notice of loan with register of deeds with county where
property is located
Discharge loan from register of deeds upon notification of full
repayment
Michigan Saves
Register and oversee Authorized and Advanced Contractors that
promote financing under the program
Develop contractor training materials and conduct contractor
training
Develop and maintain systems for making contractor materials
available to contractors and databases for project data entry
Conduct customer satisfaction surveys and quality assurance
inspections
Monitor program results and impacts
Energy Auditor/Home Energy
Assessment Professional
Promote financing to customers
Conduct comprehensive whole-home energy assessments
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
6
Installation Contractor
Promote financing to customers (can be the same company as
energy auditor)
Install energy-saving or renewable energy improvements under
contract with the customer
Loan Originator
Maintain license per federal and state laws and follow legal
guidelines in the lending and decision-making processes
Accept loan applications from customers
Review underwriting criteria to determine loan eligibility
Create and distributes loan packet to customer
Provide signed loan packet to Holland Energy Fund
Send new loan information to servicer
Loan Servicer
Process loan payments
Keep track of principal and interest paid
Monitor delinquencies
Notify Holland BPW of monthly loan payment amounts to be
collected on utility bill
Notify customer, Holland BPW and HEF upon full repayment of
loan
LENDING REQUIREMENTS
Overview
The Holland Energy Fund (HEF) provides loans to customers whose residential property is located within
the City of Holland. The loans comply with all applicable consumer lending laws. Customers will pay back
the loan on a monthly basis through a per-meter charge on their BPW bill for electric services. The
payment is considered part of the charges for electric services to the property. Consequences for
nonpayment are the same as for other electric service charges; the balance owed would be enforced in
the same way that electric service payment delinquency is handled.
Program Scale
It is difficult to predict how many City of Holland residents will participate in an on-bill program. Based on
information collected from programs in other states, a large range (between 20 and 80 percent) of
residents who complete energy efficiency upgrades will finance those projects through the use of an on-
bill program. The following assumptions were used to capitalize the HEF.
Year
Number of
retrofits
completed
Number of customers expected
to participate in the on-bill
program
Value of loans expected to be
issued (assume $10,000
average)
2016 100 20-80 $200,000 - $800,000
2017
300
40-240
$400,000 - $2,400,000
2018
300
40-240
$400,000 - $2,400,000
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
7
Holland BPW will contribute up to $3 million from reserves to capitalize the HEF. When the initial capital is
exhausted, the HEF expects to recapitalize the fund by selling a portion of the portfolio.
Customer Eligibility
Eligibility requirements for a HEF On-Bill Loan include:
• Property must be located within the City of Holland.
• Holland BPW must be the electric service provider and customer must have at least twelve
consecutive months of on-time payment history with Holland BPW; the Holland BPW customer of
record must apply for the loan.
• Applicant must meet underwriting criteria (see Table 1 above for details).
• Applicant must complete a home energy audit. (See Comprehensive Energy Assessment below.)
• Rental properties are eligible (single family, 1-4 units); landlord must hold the account for electric
service and meet all other loan eligibility requirements.
Customers who qualify for free or lower-cost weatherization or retrofit programs are encouraged to take
advantage of those programs before seeking loans through the program. Examples of such programs
include: the Weatherization Assistance Program administered by the state and local community action
agencies; the Michigan State Housing Development Authority Property Improvement Program; utility
income-qualified weatherization programs; the U.S. Department of Agriculture loan and grant programs;
City of Holland Home Repair Program; City of Holland Central Neighborhood Enhancement Program; and
the City of Holland and Good Samaritan Ministries Landlord Energy Efficiency Upgrade Program. A
summary of the eligibility requirements for these programs is provided in Appendix C.
Customers are encouraged to contact individual programs for detailed eligibility requirements and current
program information.
Loan Application Process
We expect that many homeowners will learn about the On-Bill Loan Program from contractors, and from
the City of Holland and Holland BPW’s outreach efforts. In some cases, customers will seek Authorized
Contractors via the Michigan Saves online searchable database. In other cases, contractors will promote
their affiliation with the program through marketing materials. Regardless of the flow of contact between a
customer and an Authorized Contractor, the enrollment process remains the same.
Step 1: Customer identifies an Authorized Contractor (to search for an Authorized Contractor, visit
https://www.michigansaves.org/.)
Step 2: Contractor performs an energy assessment and identifies the qualifying energy improvements
(see the Eligible Improvements section below for details). As part of the energy assessment, the
contractor should perform "test-in" diagnostics, unless asbestos or other hazardous materials are present
in the home.
Step 3: Contractor provides information on the loan program to the customer. Contractor initiates the loan
application process for the customer by accessing the loan application center online. Contractors will be
asked to provide their unique six-digit contractor identification number at the initiation of the application.
Then, the customer completes the loan qualification application online or sends paper copy by mail
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
8
(including consent to authorize release of utility bill payment history to loan application center) and
receives a decision within minutes. The customer will be notified in writing if not approved or if approved
with conditions. The customer should not sign a binding contract with a Contractor until they receive
notice that the request has been approved. If approved, the customer completes the necessary
paperwork, including any documentation required by the lender (Holland Energy Fund). The borrower is
notified of the requirement to provide consent for the lender, contractor, and utility company to disclose
relevant, customer-specific information about the improvements made, financing provided (including
consent to release loan information to Holland BPW), and pre- and post-installation energy savings. (This
authorization is signed by the customer as part of the Certificate of Completion.)
Step 4: Contractor(s) works with approved customer to finalize the work plan based on the customer’s
needs and approved loan amount.
Step 5: The contractor(s) installs the equipment according to the work plan and the contract with the
customer. A “test out” procedure, such as a blower door test, may also be conducted, as applicable, to
ensure that the improvements were installed properly. As necessary, the work plan could be modified to
address any health and safety issues identified during the installation process or the test-out procedure.
Step 6: After installation and the test-out procedure (as applicable), the contractor obtains the customer’s
signature on the Certificate of Completion (COC) and sends the COC to the loan center. This triggers
payment to the contractor (see Loan Closing and Servicing section below for more detail). Payments are
made directly to the contractors and normally arrive within 7–10 days.
Step 7: Contractor logs into their account through the Michigan Saves website (https://www2.
michigansaves.org/users/sign_in) and creates a new Specification Sheet (also called Spec Sheet or
Project Record). Contactor attaches a copy of the signed Certificate of Completion to this Spec Sheet.
Once the Spec Sheet is complete, contractor submits it to Michigan Saves.
Step 8: The customer repays the loan via direct billing by the utility on their monthly Holland BPW utility
bill. The billing due date for the entire utility bill will change to the 22
nd
of the month.
Credit Enhancement
The City of Holland will fund an initial debt service reserve of $50,000 to cover potential delayed or
defaulted payments on the loans issued by the HEF.
Loan Origination
The loan originator, Energy Finance Solutions, performs the following functions:
• Verifying that the contractor initiating the loan application and performing the work is authorized
by Michigan Saves
• Obtaining consent to pull credit history (according to underwriting criteria) and to determine
eligibility for loan
• Obtaining consent from borrowers for lender, contractor, and utility company to disclose to
Michigan Saves relevant, customer-specific information about the improvements made, financing
provided, and pre- and post-installation energy savings
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
9
• Confirming compliance with program requirements
• Communicating loan approval immediately (within minutes or even seconds) upon receiving the
loan application submission via web or phone
• Facilitating the fulfillment of the loan requirements of the HEF, including customer enrollment and
generating loan agreements (see Appendix E for sample loan agreement)
Note: Some of the sales that will be financed through the program will have been initiated by a contractor
and, therefore, will be subject to the Michigan Home Solicitation Act. For these sales, the customer has a
right to cancel any time prior to midnight of the third business day after the date of the sale. The loans are
also subject to the Michigan Home Improvement Finance Act which gives the customer the right to
rescind the loan agreement no later than 5 p.m. on the business day following the date thereof.
Loan Closing and Servicing
The authorized lender is the Holland Energy Fund. The Holland Energy Fund will comply with all
consumer lending laws.
Once loan origination is complete, the customer will sign the loan documents in-person at City Hall, 270
South River Avenue. Payment to the contractor will not occur until the work is completed and the
borrower has signed a Michigan Saves Certificate of Completion. This certificate will contain information
about the improvements that were made in the home, and will certify that the borrower is satisfied with the
completed work and consents to share certain information with Michigan Saves. The contractor will
submit the signed form to the loan originator, who will then submit the signed form along with the signed
loan packet to the HEF, thereby initiating payment to the contractor.
Holland BPW will begin billing the customer on the customer’s utility bill after the loan is closed in
accordance with their established billing practices. Customers are permitted to pay off the loan early, and
without penalty, if they choose. Consequence for nonpayment will be the same as for other electric
service charges: service can be shutoff for nonpayment, according to the terms of the Holland BPW Shut-
off Policy described in the Holland Board of Public Works Electric Rate Book General Terms and
Conditions and
the balance owed may be added to your tax bill and enforced against the Property
through the tax lien foreclosure process in the same manner and with the same priority as the charges for
your electric service and real property taxes.
Notice of the loan will be recorded with the register of deeds for the county in which the property is
located, and the obligation to pay the loan payment will run with the land and be binding on future
customers contracting for electric service to the property. When the property is sold (or rented), the
property owner must disclose the loan to the prospective buyer or renter.
Fees
To maintain and monitor the network of contractors promoting the financing, Michigan Saves assesses
Authorized Contractors a fee of 1.99 percent of the loan value upon loan closing. Lenders withhold the
1.99 percent fee from the checks sent to contractors. Lenders send the fees withheld to Michigan Saves
on a monthly basis with a monthly report.
The Certificate of Completion and the Contractor Agreement contain language to which the contractor
agrees; this grants the lender permission to withhold the 1.99 percent fee for Michigan Saves.
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
10
ELIGIBLE IMPROVEMENTS
Financing may only be used for qualifying efficiency improvements installed by Authorized Contractors.
Measures installed by the homeowner—or by any other individual or company not authorized (or not
acting as a sub-contractor for an Authorized Contractor)—are not eligible for financing. Additionally,
improvements must save energy (no cosmetic improvements), unless the improvements are non-energy
building performance improvements related to energy efficiency or eligible renewable energy installations.
A comprehensive energy audit is required on every project. Due to this requirement, emergency
equipment replacements are not eligible.
Comprehensive Energy Assessment
A comprehensive home energy audit (or assessment) by a certified home energy auditor must be
completed before the customer applies for financing. A home energy audit is an evaluation of the energy
performance of a residential structure—conducted by a qualified person using building performance
diagnostic equipment, and complying with American National Standards Institute (ANSI) approved home
energy audit standards. The audit must meet both of the following requirements:
(i) Determines how best to optimize energy performance while maintaining or improving human
comfort, health, and safety, as well as the durability of the structure.
(ii) Includes a baseline energy model and cost-benefit analysis for recommending energy efficiency
improvements.
With a comprehensive home energy assessment, homeowners are encouraged to implement multiple
measures that achieve cumulative energy savings of 20 percent or more. Whenever recommended by the
assessment, health and safety measures must be implemented for the project to be eligible for
financing. Contractors must follow Section 802 of the RESNET standard for blower door test procedures
when suspected asbestos or other hazardous materials are present.
Energy assessments must be conducted no more than twelve months prior to the loan application.
Customers can pay for the energy assessment up front or roll the cost into their loan. If a homeowner
does not implement any improvement identified by the energy assessment or is not approved for
financing, the homeowner must pay the full cost of the energy assessment.
Rebates for energy audits may be available through some utilities. Customers should check with their
electric and natural gas utility for the availability of assessment rebates. See Appendix D for more
information.
Eligible Measures List
Homeowners can finance any eligible energy efficiency improvement that is implemented by an
Authorized Contractor. Eligible energy efficiency improvements include any measure or piece of
equipment that has energy savings documented in the Michigan Energy Measures Database (MEMD) —
such as air conditioners, air sealing, air source heat pumps, appliances, boilers, doors, furnaces,
geothermal systems, insulation, roofs, skylights, water heaters, and windows. See Appendix B for the full
list of eligible measures. The measure life is determined by the MEMD in effect at the time the loan is
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
11
issued. The loan program can also be used for renewable energy measures like solar PV systems and
solar thermal systems, given the property has achieved a Department of Energy Home Energy Score of 8
or above (see Renewable Energy Measures, below). HEF will also finance the remediation of pre-existing
environmental hazards or the repair of physical/structural defects that create health and safety issues;
HEF will only finance these hazards if the remediation or repairs are coupled with an appropriate
efficiency measure, and if the cause(s) of the environmental hazard or physical defect are addressed.
All appliances and other replaced equipment must be disabled and taken out of service permanently, and
must be either recycled or disposed of in accordance with local, state, and federal laws, codes, and
ordinances. Appliances and other replaced equipment may not be re-used.
All work must be performed in accordance with all applicable federal, state, and local codes and
standards, and contractors must obtain all required permits from local authorities.
Renewable Energy Measures
Homeowners can also use the On-Bill Program for renewable energy measures like solar PV systems
and solar thermal systems if the home meets certain energy efficiency standards. The home must have
been evaluated by an authorized Department of Energy (DOE) Home Energy Score Assessor. The
process starts with a
Home Energy Score Assessor collecting energy information during a brief home
walk-through. Using the Home Energy Scoring Tool, developed by Lawrence Berkeley National
Laboratory, the Assessor scores the home on a scale of 1 to 10. A score of 10 indicates that the home
has excellent energy performance. A score of 1 indicates the home needs extensive energy
improvements. A score of at least 8 must be achieved to be eligible for renewable energy measures.
Solar photovoltaic systems must comply with Holland BPW net metering interconnect policies in the
Electric Service Net Metering Program.
For all solar PV system installations on residential structures, Authorized Contractors must also obtain
appropriate city or municipal building permits. All solar PV installations must include a solar generation
meter and meter enclosure. The solar PV system must comply with current Michigan Utility Generator
Interconnection Requirements. Contractors must provide a copy of the interconnection agreement or of
the authorization letter with the certificate of completion.
At this time, residential wind turbines are not eligible for financing.
Non-Energy Building Performance Improvements
The HEF will also finance the remediation of pre-existing environmental hazards or the repair of
physical/structural defects that create health and safety issues; the HEF will provide the remediation or
repairs as long as they are coupled with appropriate efficiency measures and the cause(s) of the
environmental hazard or physical defect are addressed. Examples of this type of work include but are not
limited to:
• Asbestos abatement with air sealing or when installing a new boiler system
• Electric service upgrade, necessary when installing a new heating/cooling unit
• Upgrade of knob and tube wiring in order to install insulation
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
12
• Radon and lead abatement work
• The cost of removing an oil tank when done in connection with a heating system replacement
• Repairs to the home due to water damage, molds or mildew, ice dams, or other symptoms of
poor building performance, as long as the cause(s) of building performance–related damage ar
e
addressed
In each of these examples, the remediation of the environmental hazard is necessary to allow for the
installation of an efficiency measure. The HEF will not finance remediation work alone. A customer must
also install a related efficiency measure.
Any remediation work must be performed by a contractor who is qualified, and in many cases, licensed
for the task. Contractors should not attempt to remediate environmental hazards or correct physical
defects that they are not trained or qualified to repair. Doing so will increase a contractor’s liability and
jeopardize their participation in the program. Authorized Contractors who are able to remediate
environmental hazards should consider obtaining pollution occurrence (also called pollution liability)
insurance to protect them from liability.
AUTHORIZED CONTRACTORS
All energy-saving or renewable energy improvements and related services that qualify for a loan must be
performed or installed by an Authorized Contractor (i.e., energy auditors and contractors installing
qualifying improvements to homes). Michigan Saves, as program administrator, authorizes and manages
contractors. To be authorized, the contractor must meet certain minimum requirements, including
appropriate insurance, licensure, and program training, as set forth in the Michigan Saves Implementation
Guide. These requirements are reflected in the contractor application that must be completed by the
contractor to register with Michigan Saves. Authorized Contractors can implement any energy efficiency
measure on the eligible measures list (See Appendix B). In all cases, a baseline home energy audit must
be conducted before an energy project is undertaken (see details about requirements for the audit in
‘Comprehensive Energy Assessment’ above).
Contractor Training
Authorized Contractors must participate in training before performing any work under the program. In
addition to the training articulated in the Michigan Saves Implementation Guide, in order to participate in
the HEF On-Bill Loan Program, contractors must participate in training about other programs available to
City of Holland residents through the Home Energy Retrofit Program and through Holland BPW, and must
familiarize themselves with the unique processes required for the HEF On-Bill Loan Program.
Michigan Saves Fees Assessed to Contractors
Authorized Contractors shall pay to Michigan Saves a fee of 1.99 percent of the loan amount for work
completed under the program. The proceeds from collected fees are used by Michigan Saves to sustain
the program’s operations. The fee will be deducted from the amount sent by the lender to the contractor.
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BILLING AND PAYMENT
Contractor Payment
After the work is satisfactorily completed, the customer and contractor will sign a Certificate of
Completion. The contractor is responsible for submitting this form and the Michigan Saves Specification
Sheet to both the HEF and Michigan Saves. Once the Certificate of Completion is received and the
customer has closed the loan, the lender will pay the contractor. The contractor will be paid within
seven days of receipt of the signed Certificate of Completion and signed loan closing documents.
Payment to contractors will be delayed if the customer does not promptly close the loan. Michigan Saves
strongly encourages contractors to maintain close communications with their customers to ensure that the
loan is closed promptly.
Customer Loan Closing and Payment
See Loan Closing and Servicing section on page 11.
Customer Rebates
The HEF On-Bill Loan Program is designed to complement utility rebates, state rebates, contractor
incentives, and federal tax credits. For rebates offered by the State of Michigan or individual utilities, the
customer must follow the redemption procedures outlined by those entities. While the contractor can help
the customer complete the redemption form, the customer is responsible for submitting the rebate form.
The customer is also responsible for claiming any applicable federal tax rebates. The contractor will
provide all the necessary product information and costs for customers to include in their tax filing.
Because rebate amounts and availability can change quickly and without notice, HEF and Michigan
Saves strongly suggest that contractors and customers review utility websites for up-to-date information
prior to installing any efficiency measure. HEF and Michigan Saves has no control or influence over any
third-party rebate program and makes no assurances or guarantees as to rebate amounts or availability.
Links to rebate programs are provided in Appendix D.
The program does not currently provide for a contractor buy-down of the interest rate on a loan. However,
contractors may apply other types of incentives before or after the loan is finalized (rebates, cash-back,
etc.). The contractor shall report any incentives accepted by the customer on the Specification Sheet.
CUSTOMER INQUIRES
Customer inquiries regarding direct loan-related questions, complaints regarding services, or questions
about installed equipment should be directed to the contractor. The HEF On-Bill Loan Program is
administered by Michigan Saves. In this role, Michigan Saves reviews certain credentials of the
contractors; Michigan Saves does not “certify,” “approve,” or “qualify” contractors, however. Michigan
Saves cannot endorse or make any warranties as to the work and business practices of a contractor.
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Michigan Saves encourages each customer to research the contractor’s work through word of mouth,
contractor ratings, customer networks (such as Angie’s List), and the Better Business Bureau.
If a customer files a complaint with Michigan Saves regarding a contractor’s performance, workmanship,
or professionalism, Michigan Saves will note the complaint in the contractor’s permanent file and take
appropriate action. Repeated customer complaints can result in a contractor’s suspension or termination
from the program. Please see the Quality Assurance section in the Michigan Saves Implementation
Guide for detailed information on contractor status.
Customers should direct any billing questions to Holland BPW.
MICHIGAN SAVES ONLINE PORTAL
The Michigan Saves Online Contractor Portal (OCP) allows contractors to view and revise all of their
account and project information in one convenient, central place. To apply to the Michigan Saves
program, contractors should submit an application via the OCP. Each project completed using the HEF
On-Bill Loan Program should be entered in to the OCP as an individual record. The record must indicate
that the project is an HEF On-Bill Loan. Certificates of Completion, signed by customers and contractors,
should also be uploaded to each project record. Contractors can log in to their account at
https://www2.michigansaves.org/users/sign_in.
QUALITY ASSURANCE
Contractors promoting financing must provide high-quality work and comply with the requirements
outlined in this Implementation Guide. The Michigan Saves Quality Assurance Coordinator (QAC) will
perform certain quality assurance (QA) functions to confirm that—on a consistent basis—the financed
measures qualify under program guidelines and were installed in accordance with applicable program
requirements and industry standards, ensuring that energy savings can reasonably be achieved. QAC
objectives and procedures are documented in the Michigan Saves Implementation Guide.
EVALUATION, MEASUREMENT AND VERIFICATION
As program administrator of the HEF On-Bill Loan Program, Michigan Saves will monitor the
effectiveness and impacts of the loan program. Key metrics include:
1. Number of loans
2. Loan value (average and total)
3. Energy savings (average and total)
Michigan Saves will have access to information on customer participation, measures installed, and utility
savings in accordance with authorizations signed by participating customers. Michigan Saves and its
officers, directors, and agents will take necessary precautions to protect the confidentiality of the
customer and contractor information, and will only use the information for evaluation and program
management purposes.
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MARKETING
The Holland Energy Fund will rely on two primary marketing efforts to promote the HEF On-Bill Loan
Program. These two efforts will be spearheaded by the City of Holland Home Energy Retrofit Program
and Michigan Saves respectively.
City of Holland Home Energy Retrofit Program Marketing Efforts
The City of Holland Home Energy Retrofit Program will be housed in the City’s Department of Community
and Neighborhood Services. In conjunction with the Holland Board of Public Works, the Program will
provide direct communication to property owners in the City of Holland with regard to the Home Energy
Retrofit Program and the HEF On-Bill Loan Program.
The City of Holland Home Energy Retrofit Program marketing materials will be available at a future date
on the City of Holland website and at City Hall, including rack cards and program flyers.
Michigan Saves Marketing Efforts
Michigan Saves Authorized Contractors will receive a contractor marketing tool kit that provides marketing
guidelines and resources to help Authorized Contractors promote the financing program to customers.
The tool kit includes information such as permitted and required uses of logos and other branding
requirements, contractor identification cards, and sample copies of marketing materials.
Michigan Saves marketing materials regarding the On-Bill Loan Program are available on the Michigan
Saves website. Printed rack cards and program flyers will also be available.
Contractors can also follow the Michigan Saves branding guidelines to develop their own customized
marketing materials with the Michigan Saves logo.
o
Michigan Saves reserves the right to request changes to, or the termination of, Michigan
Saves Brand Logo presentation that does not meet guidelines.
o
The contractor bears all changes and associated costs.
o
Contractors can request a review of draft materials, but this is not required. Send drafts to
registration@michigansaves.org. Expect response within three business days.
At no time will the contractor represent its business as an agent or representative of Michigan
Saves. Contractors may represent themselves as Michigan Saves Authorized Contractors. Michigan
Saves does not “certify,” “approve,” or “qualify” contractors. Any contracts between the contractor and its
customers or any third parties shall clearly and conspicuously express that no agency relationship exists
between the contractor and Michigan Saves.
PROCESS TO AMEND ON-BILL LOAN PROGRAM
The Holland Energy Fund seeks to continuously improve the On-Bill Loan Program. Suggestions may be
sent to Tim Vagle, President, Holland Energy Fund, at 270 S. River Avenue, Holland, MI 49423. They will
be reviewed by program staff and may be presented to the HEF Board of Directors for consideration.
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Proposed amendments to the Program must be approved by resolution of the Holland City
Council. Amendments requiring a public hearing include changes to the District boundaries, substantive
changes to the Loan Product Details as defined in Table 1 of the Implementation Guide, and substantive
changes to Customer Eligibility requirements. All other changes to the Program do not require a public
hearing.
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APPENDIX A: GLOSSARY
List of Acronyms and Terms
Advanced Contractor
A contractor with one or more of the third-party certifications or
accreditations related to building science or a specific skilled trade, who
may work within the whole-home energy assessment track and the à la
carte eligible measures track.
Authorized Contractor
A contractor meeting the minimum requirements—including appropriate
insurance, licensure, and Michigan Saves program training—who may only
work within the à la carte eligible measures track.
BPI
Building Performance Institute
Certifications
Formal documentation indicating an individual is qualified to perform a
specified function or practice a specified skill.
Department of Energy
Home Energy Score
Conducted by a Home Energy Score Assessor, the Department of Energy
Home Energy Score allows homeowners to compare the energy
performance of their homes to other homes nationwide.
Michigan Saves
Nonprofit organization that directs the activities of the Michigan Saves Loan
Center; registers and oversees Michigan Saves Authorized Contractors;
monitors program results and impacts.
Quality Assurance (QA)
The systematic monitoring and evaluation of the various aspects of a
project, service, or facility to ensure that applicable standards of quality are
met.
Quality Assurance
Inspector
Qualified professional assigned by QAC to visit site of Michigan Saves
financed projects to review the quality of the installation work on the project,
and to ensure the contractor has met Michigan Saves standards and
guidelines.
Quality Assurance
Coordinator (QAC)
Quality Assurance Coordinator. Body designated by Michigan Saves to
perform quality assurance functions to confirm that, on a consistent basis,
energy-saving measures financed through Michigan Saves program
guidelines were installed with applicable program requirements and industry
standards.
RESNET
Residential Energy Services Network. RESNET HERS rater certification,
with CAZ testing, qualifies a contractor to perform energy assessments
under the Home Energy Loan Program.
Site inspection
Visit by QA Inspector to the home where the project was completed in order
to review quality of installation work.
WAP
Weatherization Assistance Program. This federally-funded program is
managed by local Community Action Agencies. The program provides up to
$6,500 of weatherization services for homeowners who fall below 200% of
poverty.
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APPENDIX B: ELIGIBLE MEASURES LIST
The Michigan Energy Measures Database contains the most recent and ruling version of the list of eligible
measures. The following table has been inserted for reference, adapted from the 2016 proposed
measures as of 10/30/2015.
Measure Description
Useful Life
Appliances
Clothes Dryer
14
Clothes Washer 11
Dehumidifier
12
Dishwasher
11
Freezer (Chest)
21
Refrigerator/Freezer 16
Building Envelope
Air Seal Can Lights
15
Attic/Roof Insulation
25
Attic Hatch Insulation 20
Basement Wall Insulation 25
Cool Roofing
20
Crawlspace Wall Insulation
25
Door (Exterior)
20
Door Weatherstripping 5
Duct Insulation
20
Floor Insulation
25
Infiltration Reduction (Any %)
13
Kneewall Insulation 20
Pipe Wrap
15
Rim Joist Insulation
25
Wall Insulation
25
Window Insulation
25
HVAC Improvements
AC (Package System)
15
AC (Split System)
15
Air Source Heat Pump (ASHP)
15
Boiler 20
Duct Sealing 18
Electric Water Heater
15
Furnace with ECM
15
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Gas Tanked Water Heater 13
Ground Source Heat Pump (GSHP)
15
Heat Pump Water Heater
10
Instant Gas Water Heater
20
Room AC 15
Thermostat
9
Renewable Energy Improvements
Solar Domestic Hot Water
20
Solar Photovoltaic 20
Other Improvements
Ceiling Fans 15
CFL Bulbs 9
Faucet Aerators
10
LED Bulbs
15
Showerheads (Low Flow)
10
Whole House Fan 15
APPENDIX C: ALTERNATIVE PROGRAMS FOR FREE OR
LOW-COST HOME WEATHERIZATION
Program Title
Qualification
Services offered
Contact
Weatherization
Assistance Program
(WAP)
Through Michigan
Department of Human
Services
Homeowners making
up to 200 percent of the
federal poverty level
(about $44,000 a year
for a family of four)
Up to $6,500 per home
in energy efficiency
upgrades such as
insulation, air sealing,
and furnace safety
check
Local community action
agency, or the
Michigan Community
Action Agency
Association at 517-321-
7500
Property
Improvement
Program (PIP)
Through the Michigan
State Housing
Development
Authority
Homeowners with
annual household
incomes up to $65,000
($74,750 in certain
areas)
Loans from $7,500 to
$50,000 for
improvements that
increase the value or
safety of the home.
Terms are 4, 6, or 8%,
depending on income,
over 20 years.
Call 517.373.1974 or
visit
www.michigan.gov/msh
da, (click on Home
Improvement) for
details on how to
participate.
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Utility rebate
programs
Through local electric
or natural gas
provider
Must live within the
service area of the
utility offering the
rebate
Rebates on
weatherization
installations and
energy-efficient
appliances are
available from most
electric and gas service
providers in Michigan.
Your electric or gas
provider for details on
the specific incentives
offered.
Home Repair
Loan/Grant
Through Michigan
branch of USDA Rural
Development
For loans, homeowner
must earn below 50%
of the area median
income. Grants
available for those over
62.
Loans of up to $20,000
and grants of up to
$7,500 are available for
repairs to improve or
modernize a home, or
to remove health and
safety hazards. This
loan is a 1% loan that
may be repaid over a
20-year period.
Call 517-676-1808 x6
or visit
http://www.rurdev.usda.
gov/MI/sfh/sfcontact.ht
m
City of Holland Home
Repair Program
Single family, owner
occupied, low income
households
The City will pay ½ the
cost of needed repairs
up to $4,000.00.
Call 616-355-1338 or
visit
http://www.cityofholland
.com/housingandneigh
borhoods/home-repair-
program
City of Holland
Central Neighborhood
Enhancement
Program
Single family and two
family, owner occupied
homes in the Central
Neighborhood District,
city taxes and
mortgage up to date,
home must be insured,
willingness to have a
five-year lien on the
property in the amount
of City assistance
given.
The City will provide
50% of an
enhancement project
cost, up to $4,000.00,
to help homeowners
enhance their homes.
Call 616-355-1338 or
visit
http://www.cityofholland
.com/housingandneigh
borhoods/central-
neighborhood-
enhancement-program
City of Holland and
Good Samaritan
Ministries Landlord
Energy Efficiency
Upgrade Program
Single family and two
family low income
rental properties
located in the District
(bounded by 8
th
Street
on the north, 24
th
Street
on the south, Ottawa
Ave. on the west, and
Fairbanks Ave. on the
east).
The City and Good
Samaritan Ministries
will provide financing
for the installation of
energy efficiency
improvements as
defined in MCL
460.963.
Visit
http://www.cityofholland
.com/housingandneigh
borhoods/city-holland-
and-good-samaritan-
ministries-landlord-
energy-efficiency-
upgrad
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Lakeshore Habitat for
Humanity Home
Repair Program
Homeowner must have
reasonable credit
history, no bankruptcy
within two years of
application, and must
not be able to qualify
for a conventional
mortgage. Other
stipulations apply.
Habitat for Humanity
will grant an affordable
loan to help fund home
weatherization, energy
efficiency upgrades,
exterior painting, siding
repair and handicap
accessibility repairs.
Call 616-393-8001 or
visit
http://www.lakeshoreha
bitat.org/#!home-
repairs/c16ym
AP
PENDIX D: REBATE PROGRAMS
Holland Board of Public Works (HBPW)
Visit the Holland BPW website for latest rebates and other incentives available.
https://www.hollandbpw.com/homerebates
City of Holland
Visit the City of Holland website for housing assistance programs and other incentives available.
http://www.cityofholland.com/generalpage/community-neighborhood-services
SEMCO ENERGY Gas Company
Visit SEMCO ENERGY Gas Company website for latest rebates and other incentives available.
http://efficiencyunited.com/residential/semco-energy-gas-company
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APPENDIX E: HEF CREDIT APPLICATION
CREDIT APPLICATION
This is not a contract for a loan nor does it lock you into any commitment with a contractor. This is an application that will allow us to proceed with
your request for a loan to finance your improvement(s). This will include reviewing your utility bill repayment and credit history.
Please complete all fields. Incomplete applications will be returned to you for completion. Only residential work that has not been started is eligible
for financing. All owners must be applicants. If there are more than two property owners please complete additional application forms. Upon
completion of the application, please submit all requested items to:
Energy Finance Solutions, 431 Charmany Drive, Madison, WI 53719 or fax to 608.249.5788
SECTION A – INDIVIDUAL APPLICANT INFORMATION
Note: If the property is owned by a trust, the trust has to apply as a joint applicant in Section C.
Mr/Mrs/Ms
Last Name
First Name
MI
Jr/Sr/I/II
Birth Date
Home Phone
Social Security Number
Dwelling Type (Multi (3 units +) does not quality)
Single Family Duplex Other
Installation Address (where home improvements are to be made)
Unit #
City
State
Zip
How are you associated with the installation property?
Own Rent
Who resides at the installation property
Owner Tenant
If owner, how many years have you owned the installation property?
Current Address (if different than the above installation address)
City
State
Zip
Mailing Address (if different than the above current address)
City
State
Zip
SECTION B – JOINT APPLICANT
Complete only for joint credit (if Joint Applicant is a Co-Borrower/Spouse then they must own and occupy the home at the above installation address.)
Mr/Mrs/Ms
Last Name
First Name
MI
Jr/Sr/I/II
Birth Date
Home Phone
Social Security Number
Current Address (if different than the above installation address)
City
State
Zip
How are you associated with the installation property?
Own Rent
Who resides at the installation property
Owner Tenant
If owner, how many years have you owned the installation property?
SECTION C – TRUSTS
If the property is held in a trust, list the name of the trust, the name of each trust signatory and the associated title of the trust signatory
Name of the Trust
Signatory Name
Signatory Title
Signatory Name
Signatory Title
CREDIT APPLICATION
SECTION D – UTILITY INFORMATION
Electric Utility Co.
Gas Utility Co.
Have you paid your Electric Utility Bill on time in the last 12 months? Yes No
SECTION E – CONTRACTOR
Contractor (leave blank if not selected yet):
SECTION F – DESIRED LOAN TERM
The desired loan term will be applied unless the useful life of the measures installed is less than the desired loan term.
Select Desired Loan Term: 5 years 6 years 7years 8 years 9 years 10 years
11 years 12 years 13 years 14 years 15 years
SECTION G – ASSET AND DEBT INFORMATION
(If Section B has been completed, include information about both the Applicant and Joint Applicant.)
Are there any delinquent property taxes associated with the installation address? Yes No
Are there any unsatisfied judgments against you?
Yes No
If yes, to whom owed?
Total Amount Owed
$
Have you declared bankruptcy discharged in the last 3 years?
Yes No
If yes, what city/state?
Year
By completing and submitting an application, I/we certify that I/we am/are of legal contracting age and that I/we have read, understood and agree to all
of the terms stated here. By signing below, I/we certify that all information provided on this application is correct and complete to the best of my/our
knowledge. My/our signature(s) also authorizes Energy Finance Solutions (EFS), a service offered by Wisconsin Energy Conservation Corporation
(WECC), or a lender of choice, to obtain my/our utility bill repayment history, delinquent tax, and property owner information from the City of Holland.
My/our signature(s) further authorize EFS to obtain a credit report(s) in connection with my/our loan request. If necessary, I/we further agree to provide
additional information to WECC/EFS, or lender of choice, to underwrite my/our loan request. I/We further understand and authorize EFS and WECC to
retain this application whether or not it is approved. Additionally, if this application is approved and the loan I/we have requested is made, I/we also
authorize WECC/EFS to share such information concerning: my/our electric and/or gas utility billing account number; the charges payable by me/us
under the promissory note that I/we will sign; and other non-public information that I/we provided for the purpose of underwriting and servicing my/our
loan.
I/We understand and agree that EFS and WECC do not guarantee the security of any data submitted electronically and will not be held responsible or
liable for interception by third parties. I/We understand and agree that in no event will EFS or WECC be liable for any technical, hardware or software
failure of any kind, any interruption in the availability of this service, any delay in operation or transmission, any incomplete transmission, computer
virus, loss of data, or other similar loss.
The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applications on the basis of race, color, religion, national
origin, sex, marital status or age.
Applicant’s Signature
Date
Joint Applicant’s Signature
Date
Applicant’s Email Address
Joint Applicant’s Email Address
Apply online at www.energyfinancesolutions.com
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APPENDIX F: HEF LOAN AGREEMENT
Loan Agreement and
Disclosure Statement
A Michigan non-profit corporation (the “Lender”) On Bill Financing
Home Improvement Installment Contract
Borrower
Borrower
Name:
Address:
Name:
Address:
□ See Addendum for additional Borrowers and their signatures
Truth In Lending Disclosure
ANNUAL PERCENTAGE RATE
FINANCE CHARGE
Amount Financed
Total of Payments
__________%
$______________
$_____________
$______________
Itemization of Amount Financed
Amount To Be Paid to
Michigan Saves
Amount To Be Paid To Your
Energy Improvement
Contractor(s):
Total Amount to be Advanced
$___________
$__________
$____________
Borrowers’ Signatures
By signing as Borrower, you agree to the terms of the Loan Agreement.
CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE AGREEMENT
BEFORE YOU SIGN IT. DO NOT SIGN THIS AGREEMENT IF THERE ARE BLANKS.
This Agreement is not secured by a lien on any property but monthly payments that are
not paid on time may be added to your tax bill and enforced against the Property through
the tax lien foreclosure process in the same manner and with the same priority as the
charges for your electric service and real property taxes.
T
he Borrowers who signed this Loan Agreement are all of the owners of the Property.
Dated: __/___/_____
Dated: __/___/_____
X
X
Borrower:
Borrower:
Title:
Title:
Loan Date:
Loan Number:
Account Number:
Number of Payments
Amount of Payments
Payments Are Due:
_____ payments $_______ per month
See Note under Promise to Pay on
page 2
Payments are due on the 22
nd
day of
the month starting not sooner than 30
days after the Contractor Paid Date
Late Charge: If you do not pay a payment on
time, you will owe a late charge in the amount of
5% of your monthly payment, if your payment is 10
days or more delinquent.
Property: This Agreement is made to finance energy
improvements to the Borrowers’ property known as:
Address: __________________________________
Holland Energy Fund Loan Agreement Page | 2
Additional Terms
I
n this Loan Agreement ("Agreement") all references to "Holland Energy Fund," ''we," "our," or "us," mean
the Holland Energy Fund whose name appears above and anyone to whom the Holland Energy Fund
assigns or transfers this Agreement. All references to "you," or "your," mean each person who signs this
Agreement as a borrower.
1.
PROMISE TO PAY. You promise to pay $_________ to the Holland Energy Fund plus interest on the
unpaid balance until what you owe has been paid in full. The interest rate is ____% per year. You agr
ee
t
o pay ___ monthly payments in the amount of $______ per month. Note: the amount of the last
payment may be affected by early or late payments. The final payment of the entire unpaid balance of
principal and interest will be due at maturity. The maturity date is the date the final payment is due.
2.
USE OF LOAN. The loan proceeds will be used solely to pay for an energy audit of your Property an
d
ener
gy improvements by your Energy Improvement Contractor(s), to your Property known as
____________________________, Holland, Michigan 49423.
3. CONTRACTOR PAID DATE. This date is the future date in which loan funds are disbursed to your
Energy Improvement Contractor(s). This date occurs after all material and work has been satisfactorily
completed per your contract with your Contractor and a certificate of completion signed by you is
submitted.
4.
METHOD OF DISBURSEMENT. We will disburse the cost of the energy audit and the cost of energy
improvements to your Energy Improvement Contractor. We will notify you of the disbursement. The total
balance of the amounts advanced may not exceed the Amounts Financed set forth on page 1.
5.
BORROWERS’ REPRESENTATIONS. You represent to us that:
a. The Borrower(s) who signed this Agreement are all of the owners of the Property and own it
in the name of the Borrower(s).
b. You consent to the Holland Energy Fund or any third party originator or servicer sharin
g
i
nformation about this loan with the City of Holland and its Board of Public Works.
c. You have contracted directly with an energy audit firm to audit and the Contractor to
perform energy improvements to your property and agree that the Holland Energy
Fund and its third party originators and servicers are not responsible for the audi
t
firm’s or Contractor’s performance or the quality of their work or performance of any
w
arranty.
d. You agree that you may not withhold payment on this Agreement for any amounts claimed t
o
be o
wed to you for any claim against the energy audit firm or Energy Improvement Contractor
except to the extent required to be allowed by MCL 445.1207.
e. If you sell or transfer your Property, you will advise the buyer of this Agreement and
the on-bill payment obligations.
f. If the Property is or will be used for rental property, you or future owners shall keep
the utilities in your name and will not file an affidavit or notice of the Tenant’s
responsibility for payment of charges for electric services. The filing of such an affidavit
shall not affect the ability to add delinquent payments to future tax bills.
g. Borrower has determined that the execution of this Loan Agreement does not violate
the terms of any mortgage or land contract signed by Borrower.
6. P
AYMENTS BILLED ON ELECTRIC BILL. You agree to be billed your monthly payments on your
Holland Board of Public Works electric bill in the monthly amount set forth above. The payments shall be
a “per meter” charge and shall run with the property. The payments will be deemed part of the charges
for electric services to the Property. In other words, the monthly payment billed by the Holland Board of
Public Works must be paid in order for it to provide electric service to the Property.
P
ayments will commence with the next monthly Holland Board of Public Works bill after disbursement to
your Energy Improvement Contractor and arrangements are completed with the Holland Board of Public
Works. Payments will be due on the 22
nd
day of the month, the same as your electric bill.
Holland Energy Fund Loan Agreement Page | 3
Payments received by the Holland Board of Public Works will be first applied to utility charges for electric,
water and sewer, then to other utility charges and then to your loan payments described in paragraph 1.
7.
RECORDING OF MEMORANDUM AND NOTICE OF ON-BILL PAYMENT. You agree that we may
record a Memorandum and Notice of On-Bill Payment signed by you with respect to your Property. T
he
Mem
orandum will be discharged or terminated by the Holland Energy Fund recording a notice of
discharge.
8. PREPAYMENT: You may pre-pay the amount of principal, interest and other charges owed under this
Agreement, in full or in part, at any time without penalty.
9. D
EFAULT. You will be in default under this Agreement if you do not make a payment of the amount
required on or before the date it is due. You will be in default if you break any promise or representati
on
that you made in connection with this loan or if you made any false or misleading statements in your loan
app
lication. You will also be in default if something happens that we believe may seriously affect your
ability to repay what you own under this Agreement or if you are in default under any other lo
an
agr
eement you have with us.
10. AC
TIONS AFTER DEFAULT. When you are in default, we may demand immediate payment of t
he
entire unpaid balance under this Agreement. You waive any right you have to receive demand for
payment, notice of intent to demand immediate payment and notice of demand for immediate payment. If
we demand immediate payment, you will continue to pay interest at rate provided for in this Agreement,
until what you owe has been repaid. We may also exercise any other rights given by law when you are i
n
def
ault.
You also agree that the payments due under this Agreement may be enforced in the same manner as
charges for electric services which may include shut off of electric service to the Property and placing the
delinquent amounts on the real property tax bill for the Property. Once placed on the tax bill, the
amounts due will be a lien on the Property with the same priority and collected in the same
manner as real property taxes and all fees and charges applicable to delinquent taxes will apply.
11. E
ACH PERSON RESPONSIBLE. Each person who signs this Agreement will be individually an
d
j
ointly responsible for paying the entire amount owed under this Agreement. This means we can enforc
e
our
rights against any of you individually or against all of you together.
12. LATE CHARGE. If you are late in making a payment, you promise to pay the late charge shown in
t
he Truth in Lending Disclosure. If no late charge is shown, you will not be charged one.
13. D
ELAY IN ENFORCING RIGHTS. We can delay enforcing any of our rights under this Agreement
any number of times without losing the ability to exercise our rights later. We can enforce this Agreement
against your heirs or legal representatives.
14. C
ONTINUED EFFECTIVENESS. If any part of this Agreement is determined by a court to be
unenforceable, the rest will remain in effect.
15. NO
TICES. Notices will be sent to you at the most recent address you have given us in writing. Notice
to any one of you will be notice to all. In the event that you sell or transfer the Property, you agree
that we may send notices and provide information about this Agreement to anyone who acquires
an interest in the Property.
N
otice to the Holland Energy Fund shall be in writing and delivered or mailed by certified mail to the
offices of the Holland Energy Fund, Attn. Finance Department, at 270 S. River Ave., Holland, MI 49423.
16. COMPLETE AGREEMENT. This Agreement is the complete agreement between the parties and
s
upersedes any prior representation, negotiation or agreement between the parties.
17. A
MENDMENTS. This Agreement may only be amended or changed by an agreement in writin
g
s
igned by Holland Energy Fund, any other attempted or alleged amendments or changes shall be voi
d
and of no effect.
18. G
OVERNING LAW. This Agreement shall be governed by the laws of the State of Michigan and
applicable federal law.
Holland Energy Fund Loan Agreement Page | 4
Information Concerning Energy Improvements Financed under Agreement
Borrower’s Name(s): ________________________
Loan number: ________________________
Energy Audit Contractor: Name: ________________________
Address: ________________________
________________________
a. Cost of audit: $__________
Borrower’s Contractor 1: Name: ________________________
Address: ________________________
________________________
Borrower’s Contractor 2: Name: ________________________
Address: ________________________
________________________
Borrower’s Contractor 3: Name: ________________________
Address: ________________________
________________________
b. Cash Price for Energy Improvements: $___________
c. Insurance or Warranty charge, if any: $___________
d. Amount of official fees, if any: $___________
e. Direct Payment to Contractor by Borrower: $___________
Amount of Energy Improvements/Audit Financed: $___________
(total of a, b, c and d less e)
Description of Energy Improvements:
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Notice to Borrower:
(1) Do not sign this Loan Agreement before you read it.
(2) You are entitled to a completely filled-in copy of this Loan Agreement.
(3) Under the law, you have the right to pay off in advance the full amount due and, under certain
conditions, to obtain a partial refund of the finance charge.
(4) You may rescind or cancel this Loan Agreement, not later than midnight on the third business day
following the date you sign it by giving written notice of rescission to the Holland Energy Fund at its place
of business or by mailing a notice of cancellation of the Loan Agreement to the Holland Energy Fund c/o
EFS, 431 Charmany Dr., Madison, WI 53719 by depositing a properly addressed certified letter in a
United States post office mail box, but if you rescind after midnight on the third business day following,
you are still entitled to offer defenses in mitigation of damages and to pursue any rights of action or
defenses that arise out of the transaction.
(5) You should require that your Energy Improvement Contractor sign and provide you with a written
contract that contains all of the terms of your contract with the Contractor and you should receive a
completed copy of it. Do not sign a contract for Energy Improvements if it contains blanks,
I/We acknowledge reading the above Notice and receiving a complete copy of this Agreement by initialing
and inserting the date here:
________ ________ ________ ________ ___/___/______
Holland Energy Fund Loan Agreement Page | 5
Addendum to Holland Energy Fund Loan Agreement
{For when there are more than 2 Borrowers}
Loan number: ___________
The following additional persons or entities are additional Borrowers on the Holland Energy Fund Loan
Agreement, loan number __________. The undersigned acknowledge receiving a completed copy of the
Loan Agreement, pages 1-4 and agree to be bound by its terms as a Borrower.
Borrower #3: ________________________________________________________
Address: ________________________________________________________
Signature: X_______________________________________________________
Title: ________________________________________________________
Dated: ______________________
Borrower #4: ________________________________________________________
Address: ________________________________________________________
Signature: X_______________________________________________________
Title: ________________________________________________________
Dated: ______________________
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
24
APPENDIX G: MEMORANDUM OF ON-BILL FINANCING
MEMORANDUM AND NOTICE OF ON-BILL PAYMENT AGREEMENT
THIS MEMORANDUM AND NOTICE OF ON-BILL FINANCING AGREEMENT, is
made this ____ day of ______, ____ by and between ______________________,
____________, of _____________________ (the “Owner”) and the Holland Energy
Fund of 270 S. River Ave., Holland, MI 49423 (the “Fund”).
WITNESSETH:
WHEREAS, the Fund and the Owner have entered into a Loan Agreement (the
“Agreement”) of even date herewith to finance energy improvements to the Property
described below with payments billed as a per-meter charge on electric utility bills for
the property; and
WHEREAS, the parties desire to enter into this Memorandum to give record notice of
existence of the Agreement pursuant to MCL 460.969 (5).
NOW THEREFORE, for other good and valuable consideration, the Owner and the
Fund acknowledge and the parties give notice that:
1. They have entered into a Loan Agreement to finance energy improvements for
the property known as _______________________, Holland, MI 49423, legally
described as follows:
Full Legal Description on Page 2
____________________________________
Tax Parcel No.: _________________
(the “Property”)
2. The Agreement provides for the monthly payments due under the Agreement to
be billed on the electric utility bills for the Property in the amount of $_____ per
month with the last bill due on or before _____________.
Memorandum and Notice of
On-Bill Financing Agreement
Page 2
3. The on-bill payments are deemed part of the charges for electric services to the
property pursuant to MCL 460.969 and thus, are an obligation the runs with the
land and the meter for the Property requiring payment in order to obtain electric
service to the property.
4. Non-payment of the electric bill and the loan payments can be enforced in the
same manner as non-payment of charges for electric services to the property,
i.e., by shut off of electric service and/or adding the payments to the real property
tax bills for the Property and enforced through the tax foreclosure process in the
same manner and same priority as real property taxes.
5. The Agreement provides that the Owner and Owner’s successors must keep the
electric utility account in the owner’s name may not file an affidavit of tenant
responsibility for any unit of the Property while the Agreement has an outstanding
balance.
6. This Memorandum will be discharged only when the Agreement has been paid in
full. Information about the Agreement, its terms or the amount owed can be
obtained from the Holland Energy Fund at the address set forth above.
This instrument is exempt from transfer taxes since this Memorandum and Notice is not
an instrument of sale or transfer of the property but merely gives notice of the
Agreement.
Memorandum and Notice of
On-Bill Financing Agreement
Page 3
{Signatures on next page}
FULL LEGAL DESCRIPTION
Memorandum and Notice of
On-Bill Financing Agreement
Page 4
The parties hereto have executed this Memorandum and Notice on ___ day of ______, ____.
Owners:
___________________________________ ___________________________________
By: ________________, Owner By:________________, Owner
STATE OF MICHIGAN )
) ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me in ____________ County, State of
Michigan, this ___ of ______, ____, by _____________ and ______________, Owners.
________________________________________
Notary Public, ____________ County, Michigan
My commission expires: ____________________
Acting in ____________ County, Michigan
Holland Energy Fund
_______________________________________
By: Timothy Vagle, its President
STATE OF MICHIGAN )
) ss.
COUNTY OF OTTAWA )
The foregoing instrument was acknowledged before me in Ottawa County, State of Michigan,
this ___ of ______, ____, by Timothy Vagle as President of the Holland Energy Fund.
________________________________________
Notary Public, Ottawa County, Michigan
My commission expires: ____________________
Acting in Ottawa County, Michigan
This Instrument Prepared By:
Ronald J. Vander Veen
Cunningham Dalman, P.C.
321 Settlers Road
Holland, MI 49422
(616) 392-1821
Memorandum and Notice of
On-Bill Financing Agreement
Page 5
Addendum for Additional Owners
Additional Owners:
___________________________________
___________________________________
By: ________________, Owner By:________________, Owner
S
TATE OF MICHIGAN )
) ss.
COUNTY OF ____________ )
T
he foregoing instrument was acknowledged before me in ____________ County, State of
Michigan, this ___ of ______, ____, by _____________ and ______________, Owners.
________________________________________
N
otary Public, ____________ County, Michigan
My commission expires: ____________________
Acting in ____________ County, Michigan
Holland Energy Fund On-Bill Loan Program Implementation Guide
March, 2017
25
APPENDIX H: DISCHARGE OF MEMORANDUM AND NOTICE
OF ON-BILL PAYMENT AGREEMENT
DISCHARGE OF MEMORANDUM AND
NOTICE OF ON-BILL PAYMENT AGREEMENT
The Memorandum and Notice of On-Bill Payment Agreement dated ______ ___,
____, which was recorded in the Office of the Register of Deeds for _______ County,
Michigan, Document No. ________________ on ______ ___, ____, is, forever
discharged and released. This discharge hereunder covers and affects the described
real estate on the attached Exhibit A.
Dated this ___ day of ______, ____.
Holland Energy Fund
By:
____________________________________
Timothy Vagle
Its: President
STATE OF MICHIGAN )
) ss.
COUNTY OF OTTAWA )
This document was acknowledged before me on ______ ___, ____, by Timothy
Vagle, whom I know to be the President of the Holland Energy Fund.
____________________________________
______________________, Notary Public
__________________ County, Michigan
Acting in the County of ________, Michigan
My commission expires: _______________
Instrument Drafted by
and When Recorded Return To:
EXHIBIT A
Tax Description
Parcel Number: _________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
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