Simply Solar Purchase Program

Make Homeownership More Affordable with Solar-Powered Savings

Program Highlights

• Earn 3.5% of the home’s sales price (up to $13,000) for homeownership costs.
• This money can be used toward the down payment, closing costs, or to replenish savings.
• FHA Solar and Wind Technologies Loan: Homeowners can finance up to 20% of their home’s value for energy-efficient upgrades, such as solar panels, battery storage, a new roof, and more.
• Education and Mentorship: Participants are required to complete pre-closing homebuyer education and post-closing financial mentorship to ensure long-term success.
• 30% Federal Solar Tax Credit: Homeowners are eligible to receive a tax credit for 30% of the cost of the solar system from their federal taxes, reducing their overall tax burden.(currently expires at the end of 2025)

Simply Solar is designed to provide a more sustainable path to homeownership, combining educational support, financial incentives, and energy-efficient upgrades. It helps bridge the gap for homeowners by offering financial support and reducing long-term energy expenses. The program incorporates the FHA Solar and Wind Technologies Loan, which allows homeowners to finance solar panel installation directly into their FHA mortgage. This approach eliminates the need for additional solar financing and provides an incentive for homeownership while contributing to long term savings on utility costs.

Program Benefits for the Homeowner

Lower Utility Bills

One of the biggest advantages of Simply Solar is the immediate reduction in monthly utility bills. With the solar panel installation financed directly through the loan, the homeowner enjoys solar energy at no upfront cost. Over time, as utility prices rise, the homeowner’s savings will increase.

Homeowners Earn Compensation for Participating in the study program

Homeowners can earn up to 3.5% of the home’s sales price (capped at $13,000) by completing the educational and mentorship components of the program. This compensation can be used towards:

  • Down Payment or

  • Closing Costs or

  • Debt Payoff or

  • Savings Replenishment

30% Federal Solar Tax Credit

• Homeowners are eligible for a 30% Federal Solar Tax Credit, which essentially reduces the cost of the solar system.
• For example, if a solar system costs $40,000, the homeowner will receive a federal tax credit that can be 100% used in year one or will carry over for up to five years until the credit is exhausted.
• This helps reduce the overall cost and makes the investment in solar even more worthwhile.

The rule that allows homeowners to claim a 30% federal solar tax credit falls under the Investment Tax Credit (ITC), which is part of the Energy Policy Act of 2005. This credit has been extended and modified over the years, with the most recent update coming from the Inflation Reduction Act (IRA) of 2022. Under the IRS, homeowners who install solar energy systems between 2022 and 2032 (currently expiring at the end of 2025 due to the Bug Beautiful Bill) are eligible for a 30% tax credit on the cost of installation, including equipment and labor. This credit applies to both primary and secondary residences, as well as some new homes that are not yet complete. The IRS provides guidance on this credit in Form 5695, "Residential Energy Credits," which taxpayers use to claim the solar tax credit on their federal income tax return.

Increased Home Value

When the panels are owned, installing solar panels increases a home's value. Many homebuyers are attracted to homes with energy-efficient upgrades, as it lowers their long-term utility expenses. This makes homes financed through Simply Solar more appealing on the market if the homeowner decides to sell in the future.

No Additional Financing for Solar

Since the cost of the solar system is rolled into the FHA loan, the homeowner does not need to worry about obtaining separate financing for solar. This simplifies the process and ensures that energy savings are available without requiring another loan or line of credit.

Responsibilities of the Homeowner

To participate in the Simply Solar, homeowners are required to fulfill the following responsibilities:

1. Complete the Homebuyer Education Course

The homeowner must complete a 6–8-hour online course that covers the basics of homeownership, financial literacy, and the specifics of Simply Solar. This course helps ensure that homeowners are prepared for the financial responsibilities of owning a home and benefiting from energy-efficient upgrades.

2. Complete Post-Closing Financial Mentorship

After closing, the homeowner must enroll in a post-closing financial mentorship program. This course helps guide homeowners through managing their finances effectively after purchasing a home. It focuses on long-term financial planning, saving money, and managing mortgage payments.

3. Install Solar Within 90 Days of Closing

Homeowners are responsible for ensuring that the solar installation is completed within 90 days of closing. If this condition is not met, the homeowner risks forfeiting their compensation and may be required to repay any funds already received from the program.

4. Participate in Periodic Surveys

Throughout the life of the loan, homeowners will be asked to complete periodic surveys (no more than three per year). These surveys are designed to gather research data on the program’s effectiveness and help Hoper understand how well the homeowners are managing their finances, home, and solar system.

Loan Guidelines

Simply Solar Guide Effective 03/03/2025

Simply Solar Loan Guidelines

• Min Fico Score: 580 Min Fico however we can accommodate a scenario where there is no fico score on the credit report
• Financing Limits: The solar system cost cannot exceed 20% of the home’s appraised value. For example, if the home is valued at $500,000, the maximum allowed for solar financing is $100,000.
• Base Loan Amount: The loan amount is calculated at 96.5% of the lesser of the appraised value or the purchase price.
• For calculating the based loan amount, the property appraised value must not include value for the new energy system. (Cost of solar is not financed into the based loan amount; the solar system is an add-on to the base loan amount)

• The Upfront MIP is calculated on the total of the base loan amount plus the amount of the solar system
• Borrower must qualify on the total loan (with solar system cost)

Solar System Requirements

• The solar system must be owned by the homeowner, not leased, and must be new (it cannot be used to pay off an existing system).
• The system must be installed by an approved provider within 90 days of closing.

FHA Total Scorecard

• The mortgage, including the solar system cost, must pass through FHA’s TOTAL Scorecard for approval.
• DU Approve / Ineligible or LPA Accept
• Manual underwriting is not allowed on this program.
• This ensures that the homeowner can afford the total loan amount, including the solar costs.

Eligibility and Property Requirements

Simply Solar Guide Effective 03/03/2025

• Homeownership Status: The home being purchased must not already have solar and must qualify for installation, as determined by the site inspection.
• Loan Type: Mortgage must be an FHA loan that utilizes the Solar and Wind Technology Program.
• DTI: Buyers' DTI must allow solar to be financed in the mortgage while still receiving an Approve/ Ineligible AUS finding.
• Manual underwriting is not allowed on this program
• Income Caps: No income caps or restrictions.
• First-Time Homebuyer: Buyer does not have to be a first-time homebuyer.
• Eligible Property Type(s): 1-4 Unit and SFR
• Eligible Transaction(s): Purchase only

Terms & Conditions | Privacy Policy

© Copyright 2025. Covenant Realty. All Rights Reserved.