The Mortgage-Style w/ Incentive Paydown loan type models a combined loan structure in a single configuration: a standard Mortgage-Style loan paired with an automatically calculated 0%-interest Bullet loan equal to the project's incentives (typically the ITC). This is the native way to model split-loan products offered by lenders like Sunnova.
The homeowner makes mortgage-style payments throughout the loan term. An ITC-sized portion of the loan is tracked separately at 0% interest. The homeowner is expected to apply their ITC refund to pay down this portion. If they don't, the accrued amount is added to the principal and monthly payments increase.
How to create a Mortgage-Style w/ Incentive Paydown loan
- Go to Database > Financing products and click Add financing product.
- Enter a name (e.g., "Sunnova 25-Year"), select a project type, and choose Loan as the financing type. Click Add.
- Click Add Loan.
- Set Loan type to Mortgage-Style w/ Incentive Paydown.
Configure the following fields:
- Name — The loan label in Sales Mode.
- Principal — Percentage of system cost financed. Typically 100%.
- Flat fee — Optional fixed dollar amount added to the loan principal.
- Dealer fee — Lender fee as a percentage of the financed cost.
- Incentives apply to dealer fee — Enable to include the dealer fee in incentive and tax-basis calculations.
- Interest is tax deductible — Not typical for this loan type.
- Interest rate — Annual rate from your lender for the mortgage-style portion.
- Duration — Loan term in months.
- Loan can have a prepayment — Toggle on to model the ITC paydown. Reveals two sub-fields: Amount (the percentage of the loan that will be paid off early, entered as % of financed amount) and Month (the month the prepayment is paid to the lender and the loan is reamortized).
Note: Aurora automatically calculates the 0%-interest bullet component based on the project's incentive values. You do not need to configure this separately.
- Click Save.