Solar Loan Blocking Your Mortgage Refinance? What to Do

Why is a solar loan blocking your refinance?

A solar loan blocking a refinance usually comes down to the solar lender’s filing, your debt-to-income ratio, or a PACE lien. The new mortgage lender needs its loan to rank first, so a fixture filing recorded ahead of it has to be subordinated or cleared; it also counts the solar payment in your debt-to-income ratio; and it generally will not refinance around a PACE lien that outranks the mortgage. Each one has a different fix, and none requires you to stop paying anything.

What the new lender finds	Why it matters	The usual fix
A fixture filing in the county land records, recorded before the new mortgage	Under the UCC it would outrank the new mortgage	Subordination by the solar lender, a temporary release, or payoff
A solar loan secured by the panels as personal property	No title issue, but the payment still counts	Qualify with the payment, or pay the loan off
A lease or PPA	The payment may count; the lessor’s filing may need review	Show the agreement; Fannie Mae’s tests may exclude the payment
A first-lien PACE assessment	It outranks the mortgage	Pay it off at or before closing

How does a fixture filing hold up a refinance?

Timing gives the solar lender priority. A fixture filing recorded before a new mortgage outranks that mortgage (UCC 9-334(e)(1)), and Fannie Mae’s Selling Guide says a properly filed one “has priority over the lien of a subsequently recorded mortgage.” Its rule for the refinance follows: “If a UCC fixture filing is in the land records as a priority senior to the mortgage loan, it must be subordinated.” The Center for Responsible Lending, quoted in the CFPB’s 2024 solar report, says that where a jurisdiction treats a UCC lien as applying to the whole property, the lien “must either be released or made subordinate to the mortgage or refinance.”

Subordination is the solar lender’s written agreement that its claim on the panels will rank behind your new mortgage. The UCC “does not preclude subordination by agreement by a person entitled to priority” (9-339). We found nothing in the UCC or the mortgage agencies’ guides that makes a solar lender agree.

Lenders describe their own practices differently:

• GoodLeap says “there is no legal need for anything to be done” because its filing is not a lien on your home, but adds that it “may agree to lift our county UCC-1 filing” for a limited period, provided it can refile after closing.
• Tesla says it will “temporarily lift the UCC-1 filing” and then “reinstate the fixture filing for all financed systems” once the refinance closes, and asks that your refinance company call it directly. For systems “financed by Mosaic or Sunlight,” it says those lenders must be contacted instead.
• Spruce Power, a lessor, lists a $350 charge for processing a refinance or HELOC, plus $75 if a Fannie Mae addendum is required, and a $75 charge for a lender’s subordination request.

GoodLeap’s view of its own filing does not bind your new lender, which follows its investor’s rules. Freddie Mac’s 2020 bulletin made title exceptions for solar UCC-1s acceptable “provided the exception is for a lien or lease that lists only the solar panels as the collateral,” and said Freddie Mac was adding guidance on instances when a subordination agreement isn’t required. Freddie Mac, FHA and VA details turn on the loan program, so ask your loan officer exactly what the title company and underwriter need, and get the solar lender’s answer in writing.

If the panels are financed as personal property and the loan doesn’t appear on the title report, Fannie Mae’s guide lists no subordination step, but the debt still counts in your ratio and the panels add no appraised value.

How do solar payments count in debt-to-income?

Fannie Mae tells lenders to “Include the debt obligation in the DTI ratio calculation” for a financed system, whether or not a fixture filing is recorded. For leases and PPAs, the lease payment counts unless the lease delivers “a specific amount of energy at a fixed payment” and has a production guarantee that pays you a prorated amount for shortfalls; PPA payments “calculated solely based on the energy produced may be excluded.” A lessor’s “precautionary” filing that describes only the equipment “is acceptable (and a minor impediment to title).” Freddie Mac, FHA and VA apply their own tests, so ask your lender which one applies to your file.

What if you have a PACE assessment?

PACE is a property tax lien, and Treasury warns that it “takes priority over your mortgage.” FHFA is direct about the refinance: “a homeowner with a first-lien PACE loan cannot refinance their existing mortgage with a Fannie Mae or Freddie Mac mortgage.” Fannie Mae’s PACE guidance says it will not buy a loan on a property with an outstanding PACE loan “unless the terms of the PACE loan program do not provide for lien priority over first mortgage liens,” and allows standard underwriting where the PACE loan is “structured as a subordinate lien or unsecured loan.” HUD’s handbook says homes “which will remain encumbered with a PACE obligation are not eligible for FHA mortgage insurance.”

So the practical route is a payoff at or before closing, if your equity covers it. The CFPB’s PACE rule, effective March 1, 2026, now applies federal ability-to-repay requirements to new PACE financing, but it does not remove an existing lien.

Should you pay off the solar loan instead?

Sometimes paying it off is cheaper than working around it. A payoff removes the payment from your ratio and triggers the lender’s duty to end its filing: for consumer goods, within one month after nothing is owed, or within 20 days after your signed demand if that is sooner (UCC 9-513). If it misses that deadline, 9-625 allows $500 in statutory damages plus losses, which can include “increased costs of, alternative financing.”

Two cautions. The balance may include a dealer fee: the CFPB’s 2024 solar report says hidden fees “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent.” And if you want the new mortgage to pay the solar loan, ask whether that makes it a cash-out refinance; Fannie Mae’s PACE guidance refers to a general bar on using limited cash-out refinance proceeds “to pay off a loan not used to purchase the property.” Our payoff and refinance guide runs the numbers.

What should you do first?

Work in the order from our guide to getting out of a solar contract.

1. Inside a cancellation window? If you signed the solar contract days ago, cancel in writing now by the method the contract and the law require, and send the lender a copy the same day. The Cooling-Off Rule also requires a seller, once you validly cancel, to “terminate promptly any security interest created in the transaction,” which matters for a filing that could block the refinance. Windows vary by state and can be longer than three days; see the state table and deadline tool. Cancellation is never automatic.

2. Identify your contract and every company. Find the secured party on the filing and the servicer you pay. They can differ: Solar Servicing LLC, a Forbright Bank subsidiary, has serviced Mosaic loans since September 22, 2025, and Tesla-installed systems may carry a Mosaic or Sunlight filing.

3. Ask in writing, and complain for free. Send the solar lender your refinance lender’s written requirements and ask for subordination or a temporary release by a specific date. The CFPB’s complaint page asks first: “Have you tried reaching out to the company?” If the lender stalls, file a CFPB complaint about the loan and a complaint with your state attorney general. For a lease or PPA, Treasury, the CFPB and the FTC jointly “encourage consumers that believe they have been a victim of unfair or deceptive practices to file a complaint with CFPB, FTC, or their relevant state consumer protection office.”

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it.

4. If they refuse, get a free case review.

A review fits when the solar lender refuses and your documents show a gap between what you were promised and what you signed. One version is a salesperson who said the financing wouldn’t affect a refinance; in their 2022 case against PACE provider Ygrene, which settled, the FTC and California alleged that Ygrene or its contractors “told consumers that the PACE lien would not interfere with their ability to refinance their homes.” Another is a filing that claims your house when your papers describe only equipment. A firm that offers a free case review should read the filing and loan before quoting, say if a free route is still open, name an attorney licensed in your state, put its fee and refund terms in writing, never tell you to stop paying, and never guarantee a result or claim a tie to your lender.

5. Other routes. Pay off the solar loan, or compare refinance lenders and ask each how its program treats your filing. A consolidation loan can replace a high-rate solar loan if the numbers work. For leases, see how a buyout is priced, and for the filing itself, solar liens and UCC filings.

Keep paying the solar loan and your mortgage while you sort this out, unless an attorney licensed in your state has reviewed your file and advised otherwise.

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it. This page’s author, Kira Fairbank, is a manager at Vacation Ownership Consultants, a timeshare exit firm.

This is general information, not legal advice. Whether a filing must be subordinated depends on what it claims, when it was recorded, your state’s version of the UCC and your new lender’s program rules, so have an attorney licensed in your state review the filing and the solar lender’s terms before you sign a subordination, a release, or a payoff.