What is a UCC-1 filing, and does it encumber my home or interfere with my ability to re-finance my mortgage?

  • For solar electric system loans, geothermal system loans, and secured green home improvement loans, Clean Energy Credit Union files a Uniform Commercial Code (UCC) form called a “UCC-1 filing” at both the State and County level in order to give public notice that you have entered into a security agreement with Clean Energy Credit Union that specifies your project equipment as the collateral for your loan.
  • If your mortgage provider were to ever need to foreclose on your home, or if you tried to sell the home without first repaying your loan, then the UCC-1 filing would show up in a title search in the public records. It would notify other parties that the project equipment is not a part of the residence or “real property” (instead, it is removable personal property) and that it is being used as collateral for your loan.
  • The UCC-1 filing includes your name, address, a description of the collateral (which is an itemized list of your project equipment), as well as the words, “THIS SECURITY AGREEMENT DOES NOT CREATE A SECURITY INTEREST IN THE DEBTOR’S REAL PROPERTY TO BE RECORDED IN THE LAND RECORDS.”
  • So, the UCC-1 filing is technically not a lien on your real property (i.e. your residence or real estate), nor is it technically a “fixture filing.” However, it is filed via a similar process as a fixture filing so that it can be found more easily as a public record.
  • Clean Energy Credit Union will remove the UCC-1 filing after your loan is fully paid off.
  • Clean Energy Credit Union can assist with subordinating or temporarily suspending the UCC-1 filing if you refinance your mortgage in the future and your mortgage provider requires it.
    • Technically, since Clean Energy Credit Union’s UCC-1 filing is only on the personal property that’s represented by your solar electric system equipment, there shouldn’t be any conflict with the mortgage lender’s lien on your residence (i.e. your real property), but many mortgage lenders still require a subordination agreement. Fortunately, the process for providing one is relatively simple and straight-forward.
    • Clean Energy Credit Union charges a flat fee of around $100 (but please refer to our fee schedule for the current amount) to execute a notarized subordination agreement and can provide a one-page instruction document and a standard subordination agreement upon request.