Conditional Approval Application
Renew Financial offers financing for energy-efficient upgrades for your home (such as solar panels, additional insulation, cool roofs, and more) by leveraging the equity in your home.
Challenge
PACE financing is sold as a financing option on home renovation projects (the sales process is similar to buying a car). It needs to behave like a point-of-sale financing option with quick decisioning and flexible payback options. However, PACE financing is also a lien on the home, and can take weeks to properly underwrite.
Before this application redesign, our underwriting process started with gathering basic information from our homeowners. They would receive a brief statement within 15 minutes on whether they were conditionally approved or not, and then the rest of the underwriting would happen over the next few days. Because of the limitations of the system, 98% of the time the user would receive notice that we needed more information before they could receive conditional approval.
This process could take anywhere from a day to two weeks. We requested specific documents, incorporated the new data, and tried to underwrite again. Sometimes we needed to do this multiple times. This was a time-consuming process for all our users. Homeowners and contractors had no context into what we needed or why, and with multiple requests for documentation it sometimes felt like there was no end in sight. This led to frustrated contractors suggesting other financing options out of exasperation.
My goal was to provide the contractor a conditional approval (or the reason for denial) within 15 minutes so they could close the sale.
Solution
The first step involved rethinking how we asked for homeowner information. Instead of gathering basic data from our homeowners and requesting documentation when it didn’t align, I recommended to the business that we explored asking them to supply the answers we needed in the application workflow upfront. They would need to supply the proof later, but this would allow us to give a value we could lend as a conditional approval almost immediately. After a conditional approval was accepted, we would be able to underwrite at the normal pace and resolve inconsistencies as the project was being done on their home.
By asking for the answers to some of our common questions up-front, we were able to offer decisioning quickly with a high degree of confidence.
Conditional Logic
Not all questions were relevant for all users, so I wanted to leverage branch logic to only serve up those screens that were relevant for each application. As users fill out property information, we are able to know the property owners that on title. As we ask for property owner information, we are able to know their mortgages and debt load. As we ask information about mortgages, we can identify equity and give an accurate amount that we can finance for.
Additional Considerations
- The original application was a long, single-page form, which was daunting for our homeowners to fill out. From the beginning I recommended a multi-step form, because they outperform single-step forms. I also wanted to put to use other cognitive biases that would encourage users to fill out the form, such as asking for PII later in the flow and providing a timeline of progress so users can expect when to finish.
- I pushed registering for our self-serve portal as early in the process as possible, giving users a way to come back to finish the application later while giving us qualified leads to offer contractors.
- Our current application process used a lot of industry jargon, which can be intimidating to homeowners. I implemented a more approachable, less intimidating ‘voice’ for our application.
- I wanted to convey Renew Financial’s ethical code of conduct and transparency in action in this, the homeowners’ first encounter with us. Each major step of the application is introduced with an explanation of why we ask for this information and what we use it for. Form fields and action buttons use plain speak so users know what to expect when they hit a button or fill out a field.
- The current application was being maintained on two separate platforms, in different programming languages by different teams. Creating a single application form cut development time in half.
- The application needs to be flexible enough to deliver jurisdiction-specific questions or have some questions go away without breaking the overall flow. A wizard-style application was more adept than a single or multi-page application.
