Solar Lease Land Loans: We Lend Where Banks Will Not

Loans on Land With Solar Leases, Options, and Wind Easements

Land with a solar option or wind lease on it sits in a lending dead zone. Banks see an encumbrance they do not understand and decline. The developer's counsel recorded a memorandum against title, the lease runs 25 years with extensions, and the loan officer has never seen an SNDA. Meanwhile the landowner is holding an asset that is arguably more valuable than plain acreage and cannot borrow a dollar against it. We built this program for exactly that gap.

Damen Capital Fund lends on land encumbered by solar options, solar leases, wind leases, and renewable energy easements. We underwrite the dirt, we read the developer paperwork, and we close in days once the title picture is clear.

The Situations We See Most

An investor buying land that already carries a recorded solar option, priced attractively because other buyers' lenders would not touch it. A landowner in year 3 of a development option who wants to buy the adjoining parcel before the project de-risks the whole area and prices jump. An owner collecting option rent who wants capital out of the land for another acquisition without selling and losing the upside if the project reaches commercial operation. In each case the land is good, the paperwork is unusual, and speed matters because encumbered land often trades at a discount precisely when it is hardest to finance.

Two Scenarios, Two Different Loans

Scenario one: the option period. The developer holds an option, pays option rent, and has not exercised. There is no committed project and no meaningful income stream, so we underwrite the as is land value only, at a maximum 65% LTV from comparable acreage sales. Option payments are not counted toward the loan. This is most deals we see.

Scenario two: an executed lease after exercise, with a creditworthy developer on the hook. Now the payment stream is real, contractual, and backed by a counterparty we can evaluate, and we can lend against it. If your project has reached exercise and the lease is producing, send the lease and the developer name and we will underwrite the income alongside the land.

Then the paperwork. The developer usually has a recorded memorandum of option that sits ahead of a lender in the title chain. Every one of these deals needs a consent or subordination review before we fund. We read the option or lease for assignment provisions, lender protection clauses, purchase option pricing, and what happens to the encumbrance in a foreclosure. Some agreements contemplate lenders and include SNDA or lender consent mechanics, which makes the review fast. Some require the developer's written consent, which adds days or weeks depending entirely on how responsive the developer's counsel is. Arrive with the recorded memorandum, the full option or lease agreement, and your title commitment, and we will tell you within a day whether it is a quick close or a consent chase.

Set Expectations on Timeline

Clean deals close in our standard 7 days. Deals needing developer consent close as fast as the developer signs, and that is the honest answer no other lender will give you up front. What we will not do is fund around a recorded interest and hope. The subordination review is what makes these loans possible at all, and it protects your equity as much as our lien.

What This Program Does Not Do

We do not finance solar construction, equipment, interconnection costs, or development fees. We do not buy the lease or the royalty stream. This is a land acquisition and land equity program: business purpose only, 1 acre minimum, standard terms below. If the project reaches commercial operation and the developer exercises a purchase option, our loan pays off at that closing and the upside above our balance is entirely yours.

Landowner trying to understand your position first? Read can you sell or borrow against land with a solar option.

The Process, Start to Funded

Day one: send the parcel details, the recorded memorandum, the full option or lease agreement, and your title commitment if you have one. Within 24 hours you get two answers: our quote on the land, and our read on the developer paperwork, meaning whether the agreement has lender mechanics built in or requires developer consent. Clean paperwork funds on our standard 7 day track. Consent deals fund when the developer's counsel signs, and we push that process rather than waiting on it, but we will not promise you a date the developer controls.

A Realistic Example

An investor finds 60 acres listed at $210,000, below the $260,000 that comparable unencumbered acreage would bring, because a recorded solar option has chased off three financed buyers in a row. The option agreement includes standard lender protection language and an SNDA form. Our valuation comes in at $255,000 on the acreage comps, and at 65% LTV the loan is $165,750. The investor closes in 8 days for about $45,000 down plus costs. The parcel pays $9,000 a year in option rent while the project sits in the interconnection queue, which covers nearly half the interest carry. If the developer exercises, the purchase option formula in the agreement pays well above the loan balance. If the project dies, the investor owns discounted acreage that is suddenly financeable to the next buyer because the encumbrance is gone.

The discount exists because other buyers cannot get loans. Being the borrower who can is the entire edge.

Wind Leases and Older Easements

Wind deals carry their own paperwork wrinkles. Older wind leases from the 2000s buildout often blanket entire sections with broad easements, no lender provisions, and developers who have been acquired twice since signing, which makes consent slower to chase but rarely impossible. Newer wind and battery storage agreements tend to be cleaner, drafted by counsel who expect landowner financing. We also see expired or lapsed options still sitting on title years after the project died. Those are not consent problems, they are title cleanup, and we will tell you exactly what release or affidavit clears them. If you are not sure what is recorded against your ground, send the address and we will pull it apart with you before you spend anything.