Selling a house with a solar loan?
Plan the payoff before you list.

A solar loan is not a lease

This guide is for homeowners who financed a system they own. If a solar company owns the panels and you pay a lease or PPA, the process is different. See selling a house with a solar lease or PPA.

The CFPB describes two usual paths when a home is sold before a solar loan is repaid. The buyer can legally assume the loan, if the lender allows it, or the seller pays off the remaining balance. The CFPB also notes that it is not typical to move panels to a new home, because of the risk of damage to the panels or the house.

Florida’s Chief Financial Officer has warned the same thing in plain terms: if panels are financed, you may owe the full balance when you sell. Plan for it from the start.

Before you list: gather four things

1. Your loan agreement and latest statement. The statement names the company servicing the loan now, which may not be the original lender. If you are unsure, use our account contact finder.
2. A current payoff figure. This tells you whether the sale price covers the mortgage, the solar loan, and closing costs.
3. The filing on your property record. Search your county land records for a UCC or fixture filing in the lender’s name. Our post on solar UCC filings shows how.
4. System records. Warranties, permits, the utility’s permission to operate, and production history. Buyers and appraisers will ask. Our document checklist lists the rest.

Tell your agent and title company about the solar loan at the listing stage, not after the title search finds it.

Paying off the loan at closing

Paying from the sale proceeds is the most common route. GoodLeap says most of its borrowers pay off the remaining balance through the proceeds of the sale.

• Order a payoff statement. GoodLeap borrowers can tap Payoff Quote in the GoodLeap Home app to get a PDF with the total and a breakdown. For other lenders, ask how to request one in writing.
• Authorize the title company. Some lenders need your written permission to talk to escrow. Dividend Finance, for example, requires a signed third-party authorization before it shares loan information with a title company, and lets the payoff be paid through escrow as a closing cost.
• Watch the good-through date. If closing slips, ask for an updated figure.
• Check for prepayment charges. GoodLeap says it never charges a prepayment fee or penalty, and Dividend says it has no prepayment penalties. Check your own loan disclosure.

Paying off before you list. If you have the cash, or can refinance, paying the loan off before the home goes on the market can let the lender’s termination be recorded before a buyer’s title search. Ask the lender how long its release takes before you choose this route.

If you are behind. A payoff figure usually includes past-due amounts and fees, which reduce what you take home. Call the lender before you list and ask what it will take to bring the account current.

Can the buyer take over the loan?

Sometimes. It depends on the lender, and the buyer must qualify.

• GoodLeap. The buyer must apply and qualify under GoodLeap’s underwriting guidelines, and the assumption is subject to GoodLeap’s approval. If it is not approved, the balance must be paid off as part of the sale. GoodLeap lists 1-800-345-9372 for home sale questions.
• Dividend Finance. Its assumption guide says the buyer applies alone, must meet its lending and credit requirements, and supplies proof of income, a recent bank statement, and proof of the home purchase. Dividend says it decides in up to 5 to 7 business days, keeps the original loan terms, and transfers the loan only after closing.

Two details catch sellers. Dividend requires the full Incentive Payment to be paid in full before transfer. And it says the seller is responsible for payments during the transfer and for 15 days after closing.

Not every lender allows assumption. Ask yours directly, and get the answer in writing. Even when it is allowed, a buyer may prefer a lower price over taking on your loan.

What to ask your lender, in writing

Call first if you like, but follow up by email or through the lender’s portal so you have the answers on record. A short message can cover everything:

“I am selling the home at [address], with an expected closing date of [date]. My account number is [number]. Please tell me: the payoff amount and the date it is good through; whether there is any prepayment charge; whether a buyer may apply to assume the loan, and how; what authorization you need to speak with my title company; and how and when you will terminate the UCC or fixture filing after payoff.”

• Keep the replies together. Save the payoff letter, any assumption approval or denial, and the name of each person you spoke with.
• Share them with your title company. Title and escrow need the payoff instructions and the lender’s contact for the release.
• Ask about timing. Ask how long the lender takes to issue payoff letters and to process an assumption, so you can build that into the sale contract.

If a lender will not answer, or gives conflicting figures, note the dates and file a complaint with the CFPB. Our complaint letter builder can help.

Releasing the UCC fixture filing

Most solar lenders record a UCC-1 financing statement, often as a county fixture filing. GoodLeap says its filing is a lien on the solar system only, not on your home. A title company may still want it resolved before closing, and the CFPB has noted that in some places such a filing can muddy the title and may need to be released or subordinated.

After payoff, the lender should file a termination. Under the Uniform Commercial Code, for consumer goods, the secured party must file a termination statement within one month after the debt is paid, or within 20 days after it receives your authenticated demand, whichever is earlier. Whether your equipment counts as consumer goods can depend on your state and documents.

• Ask the lender, in writing, to file the termination and send you a copy.
• Check the county index a few weeks later to confirm it was recorded.
• GoodLeap directs filing questions to filings@goodleapsupport.com.

Appraisal and buyer questions

Owned panels can add value, but financing affects how an appraiser treats them. Fannie Mae’s appraisal guidance says:

• Owned panels with no debt secured by them, or with that debt paid off, may be included in the appraised value.
• Panels that are personal property and serve as collateral for another debt may not add value.
• If ownership is unclear, no value may be given unless a UCC search shows no non-mortgage lender claims the panels.

Give your agent the loan documents and the payoff plan early so the appraiser and the buyer’s lender see how the loan will be cleared. How that is treated is up to them.

Expect buyers to ask:

• Is the system owned, and will the loan be paid at closing?
• What warranties remain, and who honors them?
• What has it produced, and what are typical electric bills?
• Were permits and the utility’s approval completed?
• Is there a filing on the property record, and when will it be released?

Answer in writing, and attach documents rather than summaries. If you were told at signing that the panels would raise your home’s value, compare that with what the appraisal and buyers actually show. Your state’s seller disclosure rules may also require you to describe the system and the loan, so ask your agent or a real estate attorney.

If the sale price will not cover what you owe

If the mortgage, solar loan, and closing costs add up to more than the sale price, do not ignore the gap. Talk to the lenders before you sign a purchase contract.

• Ask the solar lender for options. Ask whether it will accept less than the full balance, release its filing, or set up a payment plan for any remaining amount. Get any agreement in writing before closing.
• Understand a short sale. The CFPB describes a short sale as a sale for less than you owe on your mortgage, with the lender’s agreement. It suggests asking the lender to waive the remaining deficiency and getting any waiver in writing. Apply the same caution to a solar loan.
• Plan for taxes. The IRS says canceled debt is generally taxable, and a lender may send Form 1099-C. Exclusions can apply, such as insolvency or bankruptcy. Ask a tax professional.
• Get free help. A HUD-approved housing counselor can help you plan. The CFPB lists the HOPE Hotline at (888) 995-4673.

Any balance you still owe after the sale remains a debt. Missing payments can lead to collections and credit damage. If the loan was sold on false promises, ask a consumer attorney whether you have claims before you agree to anything. See misled by a solar salesperson.

Where closings go wrong

• Starting late. Payoffs, assumptions, and filing releases each take time.
• The wrong company. Loans are often sold or moved to new servicers. Pay off the company named on your latest statement.
• An expired payoff figure. A short payoff leaves a balance and keeps the filing in place.
• No termination. The loan is paid, but the filing stays on the record and surfaces in the buyer’s next refinance.
• Assuming the buyer was approved. Until the lender signs off in writing, plan to pay off the loan.

When it is done, keep the payoff letter, the settlement statement, and the recorded termination together.

Related guides

• Selling a house with a solar lease or PPA
• Solar UCC filings when you sell
• How to get out of a solar loan
• GoodLeap loan guide
• Who services my solar loan?