How to Offer an On-Bill Recovery Loan
How do Lenders Participate?
Lenders must submit a Loan Originator Agreement to NYSERDA prior to issuing On-Bill Recovery Loans through the Program.
NYSERDA has retained a Master Loan Servicer, Concord Servicing, to provide oversight and monitor loan activity and payments. Once a lender receives notification from NYSERDA that the “Loan Originator” agreement has been executed, lenders must contact Concord to obtain a login and password to Concord’s Interlink FTP site. This is the site lenders use to transmit all pre-closing and post-closing loan documentation. An email with a subject line of “Login request – new NYSERDA lender – [Lender Name]” may be sent to (firstname.lastname@example.org and StephenSurat@concordservicing.com).
Before a borrower approaches their lender to seek financing through the program the borrower must have their energy efficiency project approved by NYSERDA. Only borrowers with NYSERDA-approved Request for Financing Packages are eligible to seek financing through the program. The loan amount and minimum loan term approved by NYSERDA in the Request for Financing Package will be the basis of the loan originated by the lender on behalf of NYSERDA.
How do Lenders Originate On-Bill Recovery Loans for their Customers?
Step 1: Determine Borrower Eligibility
- Follow NYSERDA’s underwriting criteria to determine if the borrower is eligible for an On-Bill Recovery Loan through the program. NYSERDA’s underwriting criteria include:
- Organization in existence at least two years.
- Credit score of principal(s) of Small Business of 650 or higher.
- No bankruptcies within the last 5 years.
- No current judgments or liens in excess of $5,000
- Debt service coverage ratio > 1.2
- Begin loan origination process if the borrower meets or exceeds NYSERDA’s underwriting criteria.
- Borrowers who do not meet NYSERDA’s On-Bill Recovery underwriting criteria will not qualify for On-Bill Recovery financing. If the borrow does not qualify, your lending institution will mail a denial letter to the borrower within 2 business days of denial. The letter will include the reason for the denial and list the name, address, and toll-free telephone number of the credit bureau accessed to make the loan decision. Your lending institution will also send NYSERDA a copy of the denial letter.
Step 2: Begin Loan Origination Process
- Establish the total loan amount to be issued. Loan amounts must be based on the eligible loan amount identified in the borrower’s NYSERDA-approved Request for Financing Package.
- NYSERDA requires lenders to obtain prior approval before closing on a loan in which the NYSERDA Participation amount varies by more than 10%.
- Establish loan term that is ≥ the minimum loan term identified on the NYSERDA-approved Request for Financing Package but ≤ 10 years.
- Contact Advantage Title at email@example.com to conduct a last owner search on the property identified on the Request for Financing Package.
Step 3: Master Loan Servicer Pre-Closing review
- Before closing on the loan, your lending institution will submit a copy of the pre-printed, unexecuted loan documents and a copy of the borrower’s NYSERDA-Approved Request for Financing Package to NYSERDA’s Master Loan Servicer, currently the Concord Servicing Corporation. Unexecuted loan documents must be sent to Concord via Concord's secure FTP site.
- Unexecuted loan documents will include:
- Concord will confirm that the unexecuted loan documents identify the eligible loan amount, and the loan terms comport with NYSERDA’s program requirements and the borrower’s NYSERDA-Approved Request for Financing Package. Concord will complete its review within 3 business days of receiving the unexecuted loan documents from your lending institution.
- Concord will notify the lender should any deficiencies be found.
- Concord will notify your lending institution and NYSERDA when pre-closing review is complete and it is ok to close on the loan with the borrower.
- Your lending institution cannot close on On-Bill Recovery loans prior to receiving confirmation from Concord that pre-closing review is complete and it is ok to close.
Step 4: Close on the Loan
- Mail the unexecuted loan documents directly to the borrower.
- Have the borrower sign and notarize the Note [PDF] and require all owners of the property to sign and notarize the On-Bill Recovery Program Declaration [PDF].
- After the Note and On-Bill Recovery Program Declaration have been executed and notarized, disburse the loan proceeds to the borrower.
Step 5: Master Loan Servicer Post-Closing Review
- Transmit executed loan documents electronically to Concord for verification, using Concord's secure FTP site. An Excel template entitled "NYSERDA SB SMComm OBR Template[XLS] " must also be completed with the loan information and submitted to Concord.
- Mail the executed Green Jobs/Green New York On-Bill Recovery Note with original signatures to Concord, attention Isaac Sirine 4150 N. Drinkwater Blvd., STE #200, Scottsdale, AZ 85251.
- Send the signed and notarized On-Bill Recovery Program Declaration to the Advantage Group at 201 Old Country Road, Suite 200, Melville, NY 11747
- Concord will complete its review within 2 business days of receiving the loan closing documents from your lending institution.
- Concord will confirm that the executed loan documents have not been modified since the pre-closing review and that the loan conforms to NYSERDA’s underwriting criteria.
- If the On-Bill Recovery loan conforms to NYSERDA’s underwriting criteria, Concord will submit invoicing information to NYSERDA to reimburse your lending institution for the loan amount and a loan origination payment.
- Concord will notify your lending institution and NYSERDA of any OBR Loans presented for reimbursement that do not meet NYSERDA’s underwriting criteria. Your lending institution will be responsible for any losses NYSERDA may incur on loans that do not meet NYSERDA’s underwriting criteria.
Step 6: NYSERDA Reimburses Lender and Pays Origination Fee
- NYSERDA will reimburse your lending institution for the amount of the loan you originate on behalf of NYSERDA and will pay your lending institution a loan origination fee for providing loan origination services. NYSERDA will transfer the reimbursement and fee to your lending institution within 7 business days of receiving loan closing confirmation from the Master Loan Servicer.
- NYSERDA will follow the payment instructions your lending institution provides in Exhibit B of the Loan Originator Agreement to transfer funds.
- Please note: NYSERDA processes electronic funds transfers once weekly (Tuesdays) for transfers to occur on Thursdays, unless otherwise noted. Lenders must submit the required loan closing documents to allow the Master Loan Servicer sufficient time to review and approve before the Tuesday processing deadline to ensure timely funds transfer.