Huge Sale at Habitat for Humanity

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New SDG&E rates ‘time of use’ may vary for rooftop solar

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San Diego Gas & Electric is rolling out “time of use” rates that will eventually affect the monthly bills for about 750,000 of the utility’s residential customers.

But will the switch affect the nearly 155,000 residential customers who have rooftop solar systems on their homes?

Yes, but the full answer is complicated.

The vast majority of solar customers will eventually move to time of use rates but some have the option to stay on a more traditional tiered-rate structure that is considered more financially attractive than time of use — it all depends on how long ago they activated their rooftop solar systems.

“It really varies on the residential side,” said Edward Randolph, the Energy Division Deputy Director for the California Public Utilities Commission, which has directed the state’s investor-owned utilities to adopt time of use rates, also known as TOU. “That’s why (solar customers) need to contact their utility to find out their exact circumstance.”

And circumstances have been changing quickly, in California’s energy landscape.

Many customers — those with solar installations as well as those without — had just gotten used to the latest iteration of tiered rates and adopting TOU means a transition to a different pricing plan.

For solar customers in the SDG&E service territory, the 20-year rule applies to those who activated their systems before June 29, 2016.

Randolph said the commission instituted the 20-year rule as an issue of fairness to solar customers who invested in a solar installation on their homes — a purchase that can frequently run to $20,000 or more, depending on the size of the house.

“When they installed the panels, they were looking at the financing and the payback of those panels based on the rate structure at the time,” Randolph said. “Ultimately, the commission made the policy determination that the most equitable way to treat those customers was to give them the option of staying on the old rate structure.”

After the 20 years are up, customers must move to time of use rates.

“If you’re a customer who installed solar a few years ago, you’re probably going to want to stay on those tiered rates and not get shifted over to TOU,” Heavner said.

But what if you installed solar on your home after June 29, 2016?

Here’s another part of the story that’s complicated.

Customers who activated their rooftop solar systems between June 29, 2016 and March 30, 2018 were defaulted to standard, tiered rates rather than TOU.

They can stay on tiered rates for now but eventually, they will migrate to time of use — either five years from the date their system activated or June 2021, whichever comes first.

read more at: https://www.sandiegouniontribune.com/business/energy-green/sd-fi-timeofuse-rates-solar-20190322-story.html

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FHA toughening its underwriting rules

First-time and move-up homebuyers with heavy debt loads, low credit scores and small down payments face a daunting new mortgage hurdle: The Federal Housing Administration is toughening its underwriting standards. Large numbers of applications could be turned down in the coming months as a result.

Industry estimates vary about the impact of the agency’s abrupt changes, but mortgage company executives told me last week that they are bracing for reductions in their FHA business by anywhere from 10 percent to 30 percent.

Here’s what’s happening: For several years, FHA has insured loans to buyers who previously would have been considered too risky or marginal at best. Those applicants often carried crushing monthly personal debts — for credit cards, auto loans, student loans and other obligations — totaling more than half of their monthly incomes. Many also had histories of credit problems that lowered their credit scores. Combined with skimpy down payments of 3.5 percent and minimal bank reserves, these borrowers have a high statistical probability of defaulting on their loans.

To prevent big losses to FHA’s insurance fund, the agency recently informed lenders nationwide that from March 18 onward, it would be applying more stringent standards to applications from high-risk homebuyers. In its letter, FHA documented its reasons for the crackdown. According to FHA Commissioner Brian Montgomery, the agency has been seeing disturbing trends in the quality of loans lenders have been delivering to it:

  • Nearly one of every four approved home purchasers had a debt-to-income (DTI) ratio exceeding 50 percent, the worst since 2000. In January, 28 percent of buyers were in that category.
  • FICO credit scores are tanking. They’ve fallen to the lowest level since 2008 — an industry-low average of 670. In the first quarter of fiscal 2019, more than 28 percent of all new purchase loans had FICOs below 640. In the same quarter, more than 13 percent of new loans had scores under 620 — 19 percent higher than the same period in the previous fiscal year. (FICO scores range from 300 to 850; low scores predict higher risks of nonpayment. Average scores for purchasers at giant mortgage investors Fannie Mae and Freddie Mac average around 750.)
  • Borrowers are siphoning equity from their homes at an alarming rate. In fiscal 2018, FHA saw a 60 percent increase in “cash-out” refinancing as a percentage of all refinancings. Cash-outs allow borrowers to convert equity into spendable money.
  • Growing numbers of loans have multiple indications of serious future risk of nonpayment — combinations of low credit scores of 640 or less and DTI ratios that exceed 50 percent.

Read more at: https://www.chicagotribune.com/classified/realestate/ct-re-0331-kenneth-harney-20190331-story.html

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