Solar Lien Removal Options for Auction Property

[Fawad Chohan]

Hi, all

I am looking at a 2nd chance foreclosure (auction) property. I need help with dealing with either removal of the solar lien or a negotiated pay off.

Timeline:

June, 2023 - House was built, and Deed of Trust was signed. Owner took out a FHA loan.

August, 2023 - Owner took out a solar loan to finance solar panels. UCC 1 (Sunnova filed a UCC Solar lien, backed by Pinnacle financing). It's a personal property lien for the PV system itself and not against the house. 

2024 - I am assuming owner stopped making mortgage payments as well as solar loan payments sometime in 2024.

March, 2025 - Substitute trustee deed was filed. House was foreclosed on. 


The solar lien is junior, and solar company cannot enforce loan payments on me (the new owner), but they can drag it out/play hardball/not respond. The other issue is solar loan must have ballooned by at least $10K since 2024, due to unpaid payments and other fees. My estimate for the initial solar loan is $30K, adding in additional $10K makes it a total of $40K. 

I plan to get a private loan for 1 year (as far as title goes, insuring over UCC, endorsement, no Sch B exceptions) and close on this. Within the 1 year of private loan, I plan to engage solar company and negotiate a payoff somewhere in the middle to get rid of this and make title fully clear permanently.

Q1) Should I go for a payoff? Is there another option to remove it?
Q2) Is it common for solar companies to agree to negotiated payoffs, especially for foreclosed homes?
Q3) If yes, what % of the balance they agree to for payoff?

Suppose, solar company does not agree to anything within a year. Then exit routes are/are not

1) Flipping does not work, as buyer/buyer's lender would demand a clean title. 
2) DSCR loans are off the table, because they require fully clean slates.
3) Come the private loan maturity in 1 year, I try to refinance into a conventional DTI loan, with the junior solar lien still standing. I know it would affect my personal finances, and scaling would be an issue. But that's the only exit plan that I can think of. Also, this is kicking the can down the road and not solving the problem (removing the solar lien). At some point, I will have to settle a payoff with them and get the lien removed.

Will a conventional DTI lender lend with junior solar lien in place?

Thanks for helping me out!

Edited: 

* I am in Texas.

* UCC's expire in 5 years here, but I expect Sunnova to keep refiling them.

* Read that Sunnova is going through bankruptcy. I don't expect the lien to drop, but operationally, they would get even slower to respond.