Hero Program No Longer Accepting Subordinations

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
The popular solar program called "HERO" has recently changed their rules and if you have this program it's beneficial to understand how it has changed.

What is HERO?
Hero is a program in which you can finance solar through your home and an increase in property taxes is how you pay it back. The great part about this is that it is tax deductible and in most cases you get to eliminate your electric bill. We all know that pesky electric bill is a pain every month and it's wonderful to not have to worry about it. In my honest opinion there are more negatives rather than positives when it relates to the program.

Negatives about the HERO Program - in most cases the cost of the panels and installation are more expensive than if you were to pay cash. You are financing the cost of the solar which also adds interest to what you have to pay back. The interest rate for the program is significantly higher than a normal cash out refinance or Home Equity Loan.

What's the NEW news?: They NO LONGER allow Subordinations! What does that mean? That HERO loan will have to be paid off at the closing of the new loan. Basically that forces you into a cash out refinance that typically comes with a higher interest rate unless you're able to pay off the solar lien in full. It could also cause you to not be eligible depending on what your current loan to value is including the HERO lien.

This now can also cause issues with people that are selling their homes with a HERO assessment on it as well. It is no longer able to be transferred to the new buyer and will have to be paid off through the close of escrow.

Buyers beware of the HERO program and if you have any questions about this change or what options you have please don't hesitate to contact us directly at 800-779-4547.
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