Florida nonprofit SELF tops $1 million in lending for low-income Gulf Coast homeowners

SELF, a nonprofit organization that lends to low-wealth homeowners, is making an impact on the contracting business in St. Petersburg and Hillsborough County.

The organization has made $1 million in loans locally for home renovation projects for energy efficiency, clean energy and resiliency. That’s provided work for more than 100 contractors, said Duanne Andrade, SELF’s chief financial officer.

Doug Coward, executive director, SELF

Those contractors are getting jobs they might otherwise have had to turn down because the homeowner didn’t have money to pay for the work, said Doug Coward, executive director of SELF.

“Most contractors will tell you they walk away from 20 percent to 40 percent of their potential business because homeowners are not qualifying for financing,” Coward said. “We’re helping them to capture a market they are currently walking away from.”

SELF, or Solar Energy and Loan Fund, was founded in 2010 and is based in Port Lucie. It serves 87 cities and counties in Florida, primarily on the east coast and in central Florida. The city of St. Petersburg and Hillsborough County, which make up the organization’s Gulf Coast region, each provided seed grants to SELF, which has established satellite offices in both locations and has three full-time staff members in the area.

St. Petersburg’s grant, approved in August 2017, came from a BP settlement that resulted from the Deep Horizon oil spill in the Gulf of Mexico. The settlement also provided funding for Solar United Neighbors, or SUN, a nonprofit that facilitated a solar co-op in St. Petersburg in 2016.

SELF’s flagship program, “Rebuilding and Empowering Underserved Communities,” makes microloans to low-wealth and working class families.

“We’re helping them gain access to capital at low interest rates so they can overcome the high upfront cost of making home renovations,” Coward said.

The average loan size is $9,000 and interest rates range between 5 percent and 9.5 percent. That’s higher than a home equity loan, which is a secured loan backed by collateral. SELF’s loans are unsecured, similar to using a credit card, but at a lower rate than a credit card charges.

Duanne Andrade, CFO, SELF

Loans are made based on the borrower’s ability to repay, not their credit score, and SELF is the project manager.

“We’re going to make sure the project gets done within code, gets inspected once it’s done, and we pay the contractor directly,” Andrade said. “There’s two benefits. One is the client is protected against scammers, whether that’s contractors or lenders. On the other hand, the contractor is being protected from not being paid. The contractors have a secure source of payment that’s totally managed through us.”

Contractors are pre-screened by SELF and must be licensed and have insurance. Participating in the SELF program also saves them money upfront, Coward said.

“Typically a contractor will have a financial entity that provides them money on a project by project basis. and typically the contractor has to pay between 10 percent to 18 percent. By brining on a local contractor and having them join our network, there’s no cost for them to join and there’s also no cost of capital. We don’t charge them 10 or 20 percent to get access to the capital. We give it to them at no cost, so they are able to reduce their per-project cost by 10 percent to 20 percent, which means they are more competitive than other companies and also provide great pricing that gets passed on to the consumer,” Coward said.

SELF’s loan capital comes from 23 investors, including more than a dozen faith-based organizations. Other investors are banks, who get credits that help them meet their responsibilities under the Community Reinvestment Act.

“Several banks have invested in us but the most significant one is BankUnited. They have stepped up to the plate. They’ve been with us for the past five years watching our growth, and they love what we are doing from a mission perspective because they are big on supporting climate resilience and the environmental and social justice aspects of what we do,” Coward said. “They started with a small investment of $150,000 three years ago and we just closed a deal of $1 million that they are providing for us to provide in the Gulf Coast specifically. It’s low cost-capital and good terms for us to be able to help the region.”

SELF currently has a $3 million loan portfolio statewide. Its goal is to grow its loan portfolio to $7 million so that it can become self-sufficient, and rely primarily on interest income and fees to pay for operations, instead of grants.

“We think the Gulf Coast region is a great opportunity for us to get to our goals of long-term self-sufficiency and sustainability,” Coward said.