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Reading the actual guideline text below — never a general AI guess

Here's what we found: all four major loan guarantors—Fannie Mae, Freddie Mac, FHA, and VA—say the same thing: if you *own* the solar panels (whether paid in cash, financed as a fixture to the real estate, or owned outright with no debt), we can include their value in the appraisal; but if you *lease* them or have a power purchase agreement, we cannot include any value for them at all, regardless of their condition or cost, because legally they belong to someone else and can be removed. The guideline also requires us to check the paperwork—specifically any UCC-1 filing—to see whether the panels are collateral for a separate loan (personal property) or tied to the house itself (real estate), because that determines whether value can be included. VA simply states that leased equipment gets no value in the appraisal, while Fannie Mae and Freddie Mac are more specific: they require us to document which ownership structure applies and exclude leased or PPA systems entirely from the property value. Straight from Fannie Mae Selling Guide, Freddie Mac Seller/Servicer Guide, VA Lenders Handbook (Pamphlet 26-7), and VA Minimum Property Requirements — nothing added.

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📖 Want the complete reference, not just this passage? See the full Freddie Mac Seller/Servicer Guide (full guide) →

☀️ Want a breakdown of typical solar components and installed costs? This covers what solar is or isn't — not what it's worth. For what systems are typically built from and typically cost (cited to NREL, LBNL, EnergySage, and BloombergNEF, separate from any value question), see the components & cost reference →

© Copyright Notice: © Fannie Mae. UAD 3.6 / URAR reference materials shown for research and reference only. Full documents available at fanniemae.com/uad. Reproduction restricted per Fannie Mae copyright policy.

Chief Appraiser Picks · Related Video Do Solar Panels Add Value to a Home Appraisal? Tips (GA Appraisals)

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#1 Solar PV: Real vs. Personal Property & Valuation (Fannie Mae, Freddie Mac, FHA, VA, UAD 3.6) Page 1

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SOURCE: Chief Appraiser Knowledge Base — Solar PV Systems: Real Property vs. Personal Property, and How Appraisers Are Required to Value Them Compiled from: Fannie Mae Selling…

Solar PV: Real vs. Personal Property & Valuation (Fannie Mae, Freddie Mac, FHA, VA, UAD 3.6) · Solar_PV_Real_vs_Personal_Property.txt · Page 1 · View at official source (guide.freddiemac.com) →

SOURCE: Chief Appraiser Knowledge Base — Solar PV Systems: Real Property vs. Personal Property, and How Appraisers Are Required to Value Them Compiled from: Fannie Mae Selling Guide B4-1.3-05 (Improvements Section of the Appraisal Report) and B2-3-04 (Special Property Eligibility Considerations), plus Fannie Mae's own "Appraising Properties with Solar Panels" reference (Nov. 2024); Freddie Mac Single-Family Seller/Servicer Guide Section 5601.4; HUD/FHA Single Family Housing Policy Handbook 4000.1, Special Energy-Related Building Components; VA Lenders Handbook (Pamphlet 26-7 / M26-7), Chapter 12, Topic 24; Fannie Mae UAD 3.6 / new URAR, Energy Efficient & Green Features section; Lawrence Berkeley National Laboratory, "Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis" (Hoen et al.) Last reviewed: August 2026 ===================================================================== Solar PV Systems: Real Property vs. Personal Property, and How Value Is Determined The single most important fact about a solar photovoltaic system on a house for sale is not how new it is, how efficient it is, or what it cost to install. It's who owns it. Every major loan guarantor — Fannie Mae, Freddie Mac, FHA, and VA — draws the same line: an owned system can be treated as part of the real estate and can contribute to the appraised value, while a leased system or one under a power purchase agreement (PPA) is legally personal property and must be excluded from the appraised value entirely, no matter how it looks bolted to the roof. The four ownership and financing structures. Fannie Mae's own solar guidance identifies four distinct structures a solar system can sit in, and each is treated differently by an appraiser: Owned outright — a cash purchase, or a system bought with ordinary consumer debt that is not collateralized by the panels themselves and is paid off. The appraiser may include the panels' contributory value based on standard appraisal requirements. Financed as a fixture to the real estate — the loan is secured by the real property itself, not by the panels as separate collateral, and the financing terms do not allow the lender to repossess the panels on default. The appraiser may still consider the panels in the property's value. Financed as personal property — the panels themselves are the collateral for a separate loan, distinct from the mortgage. Because the panels can be repossessed independently of the house, the appraiser may not give them contributory value. Leased, or covered by a power purchase agreement — the

#2 Freddie Mac Seller/Servicer Guide Page 55

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(PPA). The Seller must also review any UCC-1 Financing Statement or lease agreement associated with the solar panels to determine if liens are against the real estate or against…

Freddie Mac Seller/Servicer Guide · Freddie_Mac_Guide_2026-06-25.txt · Page 55 · View at official source (guide.freddiemac.com) →

(PPA). The Seller must also review any UCC-1 Financing Statement or lease agreement associated with the solar panels to determine if liens are against the real estate or against the solar panels. The property must maintain access to electrical utilities consistent with community standards. If solar panels are present on the Mortgaged Premises, the Seller must follow the requirements outlined in the table below: Properties with solar panels PPA Solar panel lease Solar panels financed as personal property Solar panel financed as a fixture to real estate Solar panels owned free and clear Description The Borrower purchases power produced by the solar panels but does not own the solar panels. The Borrower pays monthly lease payments to access the solar panels but does not own them. The Borrower owns the solar panels, having purchased them with a note/security agreement and is entitled to power produced by the panels. Borrower owns the solar panels and has no related debt. Title UCC-1 Financing Statement or lease agreement associated with the solar panels recorded in the applicable land records and claiming an interest in the solar panels but not the real estate; the Seller is not required to obtain a subordination agreement of the UCC-1 Financing Statement. UCC-1 Financing Statement recorded against title to the Mortgaged Premises, creating a lien on the real estate itself (i.e., claiming an interest in both the solar panels and the real estate, not just the solar panels); the Seller must either subordinate or release this lien. There must be no UCC-1 Financing Statement or notice recorded against the Mortgage Premises. In the event there is a UCC-1 Financing Statement, it must be released. Appraisal The solar panels must not be included in the appraised value of the property. The appraiser must comment on the marketability of the home with solar panels present and identify the panels and system features. The solar panels must not be included in the appraised value of the property if the lender may repossess them for default on the financing terms. Seller must ensure the appraiser has recognized the existence of the solar panels and considered the solar panels in the appraiser’s opinion of the market value of the property. Debt payment-to-income (DTI) ratio Lease payments for solar panels may be excluded from the monthly DTI ratio if the lease: Provides for delivery of a specific amount of energy for an agreed upon

#3 Fannie Mae Selling Guide Page 280

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to such real property. It contains both a description of the collateral that is, or is to be, affixed to that such property, and a description of such real property. It is filed…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 280 · View at official source (selling-guide.fanniemae.com) →

to such real property. It contains both a description of the collateral that is, or is to be, affixed to that such property, and a description of such real property. It is filed in the same office that mortgages are recorded under the law of the state in which the real property is located. Filing in the land records provides notice to third parties, including title insurance companies, of the existence and perfection of a security interest in the fixture. If properly filed, the security interest in the described fixture has priority over the lien of a subsequently recorded mortgage. If the solar panels are leased from or owned by a third party under a power purchase agreement or other similar lease arrangement, the following requirements apply (whether to the original agreement or as subsequently amended). ✓ Lender Requirements for Properties with Solar Panels that are Leased or Covered by a Power Purchase Agreement The lender must obtain and review copies of the lease or power purchase agreement. The monthly lease payment must be included in the DTI ratio calculation unless the lease is structured to • provide delivery of a specific amount of energy at a fixed payment during a given period, and • have a production guarantee that compensates the borrower on a prorated basis in the event the solar panels fail to meet the energy output required for in the lease for that period. Payments under power purchase agreements where the payment is calculated solely based on the energy produced may be excluded from the DTI ratio. The value of the solar panels cannot be included in the appraised value of the property. The value of the solar panels must not be included in the LTV ratio calculation, even if a precautionary UCC filing is recorded because the documented lease or power purchase agreement status takes priority. Note: A “precautionary” UCC filing is one that lessors often file to put third parties on notice of their claimed ownership interest in the property described in it. When the only property described in the UCC filing as collateral is the solar equipment covered by the lease or power purchase agreement, and not the home or underlying land, such a precautionary UCC filing is acceptable (and a minor impediment to title), as long as the loan is underwritten in accordance with this topic. The value of the solar panels must

#4 Solar PV: Real vs. Personal Property & Valuation (Fannie Mae, Freddie Mac, FHA, VA, UAD 3.6) Page 5

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array increasingly does. What this means for real estate agents preparing a listing. Determining whether solar panels add value to a specific house, and by how much, is appraisal…

Solar PV: Real vs. Personal Property & Valuation (Fannie Mae, Freddie Mac, FHA, VA, UAD 3.6) · Solar_PV_Real_vs_Personal_Property.txt · Page 5 · View at official source (guide.freddiemac.com) →

array increasingly does. What this means for real estate agents preparing a listing. Determining whether solar panels add value to a specific house, and by how much, is appraisal work — a real estate agent should not represent to a seller or buyer what an appraiser will conclude, and Chief Appraiser deliberately doesn't publish typical dollar or percentage premiums here for that same reason. What an agent can do, and can do well before an appraiser ever gets involved, is find out which of the four ownership structures above actually applies — ask the seller directly whether the system is paid off, financed, leased, or under a PPA, and ask to see the actual agreement — so that pricing conversations start from an accurate premise instead of an assumption. An agent can also apply the same paired-sales logic described above to their own market knowledge during a listing presentation: pulling recent comparable sales in the immediate market, some with owned solar and some without, to see what the data in that specific neighborhood actually shows, the same technique the appraisal profession itself relies on. That's market research an agent is well positioned to do with their own MLS access and comp selection — it just isn't, and shouldn't be presented as, an appraisal or a substitute for one. Practical checklist. Ask the seller directly: is the system paid off, separately financed, or under a lease or PPA? Ask to see the actual agreement rather than relying on a verbal answer. If financed, ask whether the financing is secured by the real estate as a fixture or by the panels themselves as separate collateral — the agreement's default and repossession language controls this, not how the system looks installed. Flag leased and PPA systems clearly to buyers early, since those payments typically transfer with the property and affect the buyer's own qualifying math even though they don't add appraised value. For owned systems, pull comparable sales with and without solar in the same market before quoting a price expectation, rather than assuming a flat premium. Where a battery is present alongside the panels, confirm its ownership structure separately, since a battery is sometimes financed or leased differently from the panels even when both were installed on the same day by the same contractor — one can be owned while the other is leased, and each is evaluated on its own paperwork.

#5 Freddie Mac Seller/Servicer Guide Page 56

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panels and considered the solar panels in the appraiser’s opinion of the market value of the property. Debt payment-to-income (DTI) ratio Lease payments for solar panels may be…

Freddie Mac Seller/Servicer Guide · Freddie_Mac_Guide_2026-06-25.txt · Page 56 · View at official source (guide.freddiemac.com) →

panels and considered the solar panels in the appraiser’s opinion of the market value of the property. Debt payment-to-income (DTI) ratio Lease payments for solar panels may be excluded from the monthly DTI ratio if the lease: Provides for delivery of a specific amount of energy for an agreed upon payment during a given period, and Includes a production guarantee under which the Borrower is compensated on a prorated basis when the solar panel energy production falls below the level required by the lease agreement Payments for solar panels subject to a PPA or similar type of agreement may be excluded from the monthly DTI ratio if the payment is calculated based only on the generated energy. Payment to solar company or lender is included in the DTI ratio. Payment to solar company or lender is included in the DTI ratio. N/A – no payment required Total loan-to-value (TLTV) ratio Not included in the TLTV ratio Included in the TLTV ratio N/A Obtain a copy of the lease, PPA or note/security agreement Damage that occurs as a result of installation, malfunction or the removal of the solar panels is the responsibility of the owner of the equipment. The owner must be obligated to repair the damage and return the improvements to their original or prior condition. In the event of foreclosure, the Seller/Servicer may: Terminate the lease agreement or PPA and require the owner of the equipment to remove the panels and supporting equipment Become the beneficiary of the Borrower’s lease agreement or PPA without incurring a transfer fee; or Enter into a new lease agreement or PPA with the owner of the equipment under terms no less favorable than the existing agreement The Mortgage file must contain a copy of the lease agreement, PPA or similar type of agreement, as applicable N/A Homeowner’s insurance The owner of the solar panels agrees to not be a loss payee (or named insured) on the homeowner’s insurance policy covering the property. N/A Any title insurance policy exceptions due to the existence of the lease agreement, PPA or similar type of agreement must comply with the acceptable exceptions found in Section 4702.4. ================================================================================ SECTION 5601.5 ================================================================================ Refer to Bulletin 2025-7, which announced the policy requirements for Uniform Appraisal Dataset (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal® appraisal reports that use UAD 3.6 before the mandatory effective November 2, 2026

#6 Fannie Mae Selling Guide Page 278

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leasing agreements, separately financed solar panels (where the panels serve as collateral for debt distinct from any existing mortgage); or power purchase agreements. Fannie Mae…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 278 · View at official source (selling-guide.fanniemae.com) →

leasing agreements, separately financed solar panels (where the panels serve as collateral for debt distinct from any existing mortgage); or power purchase agreements. Fannie Mae will purchase or securitize a mortgage loan on a property with solar panels. If the borrower is, or will be, the owner of the solar panels (meaning the panels were a cash purchase, were included in the home purchase price, were otherwise financed and repaid in full, or are secured by the existing first mortgage), our standard requirements apply (for example, appraisal, insurance, and title). Properties with solar panels and other energy efficient items financed with a PACE loan are not eligible for delivery to Fannie Mae if the PACE loan is not paid in full prior to or at closing. For additional information, see B5-3.4-01, Property Assessed Clean Energy Loans. Lenders are responsible for determining the ownership and any financing structure of the subject property’s solar panels in order to properly underwrite the loan and maintain first lien position of the mortgage. When financing is involved, lenders may be able to make this determination by evaluating the borrower’s credit report for solar-related debt and by asking the borrower for a copy of all related documentation for the loan. The lender must also review the title report to determine if the related debt is reflected in the land records associated with the subject property. If insufficient documentation is available and the ownership status of the panels is unclear, no value for the panels may be attributed to the property value on the appraisal unless the lender obtains a Uniform Commercial Code (UCC) “personal property” search that confirms the solar panels are not claimed as collateral by any non-mortgage lender. Note: A UCC financing statement that covers personal property and is not intended as a “fixture filing” must be filed in the office identified in the relevant state’s adopted version of the UCC. Lenders are responsible for ensuring the appraiser has accurate information about the ownership structure of the solar panels and that the appraisal appropriately addresses any impact to the property’s value. Separately financed solar panels must not contribute to the value of the property unless the related documents indicate the panels cannot be repossessed in the event of default on the associated financing. Any contributory value for owned or financed solar panels must comply with Energy Efficiency Improvements in B4-1.3-05, Improvements Section of the

#7 VA Lenders Handbook (Pamphlet 26-7) Page 443

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Minimum Property Requirements 12-32 25. Alternative Energy Equipment Change Date March 28, 2019 • This chapter has been revised in its entirety. a. Alternative Energy Systems…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 443 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Minimum Property Requirements 12-32 25. Alternative Energy Equipment Change Date March 28, 2019 • This chapter has been revised in its entirety. a. Alternative Energy Systems Alternative energy systems use wind, geothermal, or solar energy to produce energy to support the habitability of the structure. b. Market Acceptance to be Considered The appraiser must analyze the market acceptance of special energy-related building components and equipment, including solar energy components, high-energy efficiency housing features and components, geothermal systems, and wind powered components. c. No Value to Leased Equipment Leased equipment must not be given value in the appraisal.

#8 VA Minimum Property Requirements (Ch. 12) Page 32

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Requirements 12-32 25. Alternative Energy Equipment Change Date March 28, 2019 • This chapter has been revised in its entirety. a. Alternative Energy Systems Alternative energy…

VA Minimum Property Requirements (Ch. 12) · Ch12_Minimum_Property_Requirement_NEW 2022 02 17.pdf · Page 32 · View at official source (VA.gov — Construction and Valuation) →

Requirements 12-32 25. Alternative Energy Equipment Change Date March 28, 2019 • This chapter has been revised in its entirety. a. Alternative Energy Systems Alternative energy systems use wind, geothermal, or solar energy to produce energy to support the habitability of the structure. b. Market Acceptance to be Considered The appraiser must analyze the market acceptance of special energy-related building components and equipment, including solar energy components, high-energy efficiency housing features and components, geothermal systems, and wind powered components. c. No Value to Leased Equipment Leased equipment must not be given value in the appraisal.

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