This document discusses launching a residential energy upgrade program in Salt Lake County using a combination of Qualified Energy Conservation Bonds (QECBs) and the PowerSaver financing product. QECBs offer below-market interest rates subsidized by the IRS, while PowerSaver provides mortgage insurance through HUD. The proposed program would issue QECBs through a conduit to fund low-cost loans originated by an approved PowerSaver lender. This structure could create a sustainable financing model to scale the energy upgrade market in Salt Lake County while offering homeowners energy improvements at affordable rates.

1. CLEAN ENERGY FINANCING: QECBs WITH POWERSAVER
Presentation to Debt Review Committee
Matthew Brown, Principal
March 29, 2012

2. OVERVIEW
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3. VISION FOR SALT LAKE COUNTY
Launch residential energy upgrade market with affordable interest rates and scalable design
The Salt Lake County
QECB/PowerSaver model can spark
consumer demand for residential
energy upgrades, including solar and
cost-saving energy efficiency.
Demand can be met with local
equipment vendors and
contractors, creating not just local jobs
but a market as the offering scales.
Creation of the market will attract
subsequent investors, thereby allowing
the Salt Lake region to become a hub
of energy upgrade activity
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4. WHAT ENERGY EFFICIENCY LOOKS LIKE
Low cost, high return upgrades with immediate savings and increased value and comfort
Before upgrade After upgrade
• Wasted heating and cooling • Balanced, efficient HVAC
• High utility costs • Reduced utility costs
• Hot/cold zones and low comfort • Liveable space and high comfort
• Average resale value • Marketing advantage on resale
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5. ELIGIBLE UPGRADES
Most measures will be available locally and can be installed by local contractors
 Insulation  Water Heater
 Duct sealing (gas, propane, electric, tankless)
 Energy Star Roofs
 Storm Doors
 Ground Source Heat Pump
 Window Replacement
 Water Heater (Solar)
 Storm Windows  Fuel Cells
 Heating System  Micro-turbines
 Gas/Propane/Oil Boiler / Furnace  Solar Panels
 Air Conditioner  Small Wind Turbines
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6. ENGAGING THE LOCAL COMMUNITY
St. Louis County and others have seen tremendous contractor support
• Over 60 contractors were approved within the
St. Louis program.
• Many contractors paid for independent
marketing, including one that spent over $30k
promoting the program.
• These projects are primarily initiated by
contractors.
 Rollout strategy for integrating contractors with PowerSaver lender will be
critical.
 Contractors need to understand financing and be enabled to originate
projects.
 Fannie Mae lenders have used this “dealer loan” model successfully for
years.
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7. COMBINING QECBs WITH POWERSAVER
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8. BENEFITS OF QUALIFIED ENERGY CONSERVATION BONDS (QECBS)
• Well below-market interest rates
• Up to 70% interest subsidy from IRS
• Consumers benefit directly from low rates
• Boulder County – 1.1 to 2.9% for
commercial loans
• St. Louis County – 3.5% for
residential loans
• Available for qualified energy conservation
purposes
• Renewable energy
• Energy efficiency
• Certain transportation projects
• “Green community programs”
• Exempt from the 30% private activity
cap
• Salt Lake County has approximately $4.49MM
of available QECB allocations
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9. POWERSAVER SUMMARY
• FHA-based private mortgage insurance product
designed to result in low-cost lending for
residential energy upgrades
• HUD has approved 17 PowerSaver lenders to
date
• The mortgage insurance guarantees up to 90%
of each qualifying loan and up to 10% of the
lender’s Title 1 portfolio
• The maximum loan amount is $25,000
• Loan must be secured if over $7,500
• Credit requirements include:
• FICO ≥ 660; Debt-to-income ≤ 45%; Loan-
to-value ≤ 100%
• Employment and income verification
requirement (2 years)
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10. POWERSAVER APPROVED LENDERS
At least 7 PowerSaver lenders would be available to partner with the County
HUD Approved and Utah Licensed:
AFC First Financial - Allentown, PA
Bank of Colorado - Ft. Collins, CO
City of Boise - Boise, ID
Neighbors Financial Corp. - Sacramento, CA
Paramount Equity - Roseville, CA
Sun West Mortgage Co. - Cerritos, CA
WJ Bradley - South Jordan, UT
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11. ADVANTAGES OF COMBINING QECBS WITH POWERSAVER
• QECB interest rate subsidy combined with HUD PowerSaver’s mortgage
insurance could allow Salt Lake County to launch a below-market rate
financing program for residential energy upgrades
• PowerSaver mortgage insurance may allow pure conduit structure without
credit support from Salt Lake County for the bond issuance
• Establishing a relationship with a PowerSaver lender could allow the program
to scale as QECB proceeds are expended, resulting in a sustainable, low cost
model
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12. STRUCTURE OVERVIEW
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13. CONDUIT ISSUANCE QECB WITH SALT LAKE COUNTY SUPPORT AGREEMENT
Bond Purchasers
DSR for benefit
of bond Principal
purchasers and interest Bond proceeds
paid to
investor
IRS: Interest Conduit Issuer Created
Rate Subsidy Up to 70% by Salt Lake County
Capital supplied
P&I passthrough to fund loans
FHA: 90%/10%
Mortgage PowerSaver Lender
(with optional Administrator)
Insurance
P&I payments
Loans are originated with
made to the
funding to contractor
Lender
5% Borrower Residential Property
Funded DSR Capitalized Owners
Fee
= Capital Inflow
= Capital Outflow
= Credit Enhancement 13

14. QUESTIONS
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