Solar Agreement Fnma

Solar Agreement and FNMA: What You Need to Know

If you`re a homeowner looking to install solar panels on your property, you may have heard of FNMA and wondered how it relates to your project. FNMA stands for the Federal National Mortgage Association, commonly known as Fannie Mae, which is a government-sponsored enterprise that provides liquidity to the mortgage market.

So, why should you care about FNMA when it comes to solar installations?

In short, your solar agreement may impact your ability to sell or refinance your home in the future. Fannie Mae sets guidelines for mortgages that it purchases from lenders, and these guidelines dictate what types of properties and structures are eligible. For example, Fannie Mae requires that a property have a permanent foundation in order to be eligible for a mortgage.

Similarly, Fannie Mae has specific requirements for solar installations. If you have a solar agreement that includes a lien on your property (meaning the solar company has a legal claim to your property in the event of default), this may affect your eligibility for a Fannie Mae-backed mortgage.

To be clear, having a solar installation itself does not preclude you from obtaining a Fannie Mae mortgage. However, if your solar agreement includes a lien on your property, you may need to take certain steps to ensure that the lien does not hinder a future sale or refinance.

One option is to pay off the solar lien before selling or refinancing. This can be a significant expense, so it`s important to factor it into your decision to install solar in the first place. Another option is to seek approval from Fannie Mae for your solar agreement. Fannie Mae has guidelines for solar agreements that include a lien, and if your agreement meets these guidelines, you may still be eligible for a Fannie Mae mortgage.

It`s worth noting that not all solar agreements include a lien. Some companies offer solar leases or power purchase agreements (PPAs), which do not involve a lien on your property. If you are considering installing solar, it`s important to understand the different types of agreements available and the potential impact on your ability to refinance or sell your home in the future.

In conclusion, while solar installations can provide numerous benefits, it`s important to be aware of the potential impact on your property`s eligibility for a Fannie Mae-backed mortgage. If your solar agreement includes a lien, consider paying it off or seeking approval from Fannie Mae to ensure a smooth sale or refinance process in the future. And if you`re in the process of shopping for solar companies, be sure to ask about the type of agreement they offer and whether it includes a lien on your property.