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Catalyst Term Loan

The Catalyst Term Loan supports energy improvement projects for low- and moderate- income multifamily properties and community based non-profit organizations. You use the energy cost savings to repay the loans over time.

If you own an apartment building or other multifamily property serving low and moderate-income Texans, then this financial vehicle is for you.

Nonprofit community organizations that own their office buildings are also perfect candidates.

With the catalyst loan, you can access low-cost financing for any upgrades to your building that provide proven energy savings. From installing more efficient lighting, windows or HVAC to adding insulation or solar panels, the Catalyst helps you kickstart your cost savings.

Who services the Catalyst loans?

Inclusive Prosperity Capital and the Clean Energy Fund of Texas entered into a

cooperative agreement in 2021 to introduce the Catalyst loans in the Houston market. Clean Energy Fund of Texas is engaging with property managers, owners, and developers, and contractors to spread the word about these loans. We are also helping identify eligible projects and preparing loan applications. Inclusive Prosperity Capital underwrites the loans and manages approvals, closing, and servicing.

What energy improvements are eligible for financing?

Any building improvement that have proven to reduce a building’s baseline energy use is eligible for Catalyst financing. Typical improvements include, lighting, insulation, windows, HVAC upgrades, and solar installations.

Who can use the Catalyst Term Loan?

The Catalyst Term Loan is designed for low and moderate-income multifamily properties

and community based non-profit organizations looking to address energy, health and safety improvements to their buildings.

What are the size limits for the Catalyst Term Loan program?

The Catalyst Term Loan program has a minimum loan amount of $50,000 and a maximum of $2,000,000. In certain cases, higher loan amounts may be considered; please contact us for details.

Can non-energy and water-related improvements also be financed?

Yes. Up to 25% of the total loan amount may be used for non-energy related improvements, subject to underwriting. Examples include roof replacement, vegetation removal, distribution trenching, health and safety remediation (i.e. mold), etc.

How do you underwrite the Catalyst Term Loan?

Inclusive Property Capital underwrites the Catalyst Term Loan based on the overall financial security of the property as it relates to the installation of the proposed energy improvements, plus an applicant’s financial history.

How do you determine energy savings?

Energy savings are based on the anticipated reduction in energy costs property owners are expected to see over the estimated useful life, or life expectancy, of the financed equipment and measures. The calculated savings typically include decreased electric, heating, cooling, water use, operations, maintenance, and insurance costs.

Can I use incentives from my utility or the state of Texas to lower the loan principal?

Yes. We encourage building owners to apply incentives to the loan principal for the installed cost of energy saving measures. We work with property owners to identify and apply any available incentives and grants.

Is the Catalyst Term Loan secured?

We consider the Catalyst Term generally unsecured. Multifamily properties with existing debt typically encounter difficulties adding additional mortgage debt. In these instances, we would establish a UCC-1 financing statement filing on all energy saving measures installed via the loan. We may require mortgages for new construction or gut rehabilitation projects. We may also require a due-on-sale clause and an Affidavit of Facts Affecting Title to Real Property (depending on ownership) for municipal land records.

What is the maximum term length for the Catalyst Term Loan?

Loan terms are available up to 20 years. Loan terms cannot exceed the estimated useful life, or life expectancy, of energy saving measures installed. For example, if the estimated useful life of a water heater is 10 years, the maximum financing term is 10 years. If multiple measures are financed, the term cannot exceed the average estimated useful life of all measures installed.

How long does the project approval process typically take?

Once we receive a complete application, we will work diligently to underwrite and prepare a loan approval document for submission to the Catalyst Loan Committee. The loan committee meets every three weeks to review project applications. Applicants can expect an approval within three weeks of a completed application submission.

In the case of an emergency replacement, can you speed up the project approval timeline?

In extreme circumstances, yes; but the timeline depends on the submission of a completed application.

Special opportunity for non-profits & small businesses

If you are a small business or non-profit organization then you may qualify for our Green-Roots Loan. This innovative financing vehicle allows you to affordably improve the energy efficiency of your property.