Challenge #3 is open to a broad range of organizations that enable, develop, or expand green lending in Michigan.

Eligible applicants may include:

• Banks
• Credit Unions
• Community Development Financial Institutions (CDFIs)
• Minority Depository Institutions
• Non-profit organizations
• Community-based organizations
• Municipal or public entities
• For-profit organizations

If the applicant is not a Michigan-based financial institution that conducts lending in the state, the application must include a Michigan-based financial institution as a partner. That financial institution must actively participate in and meaningfully benefit from the project.

A Michigan-based financial institution is defined as a bank, credit union, CDFI, or other lending entity that lends in Michigan.

Yes. Cross-sector partnerships are encouraged. Non-profits, for-profit businesses, capital providers, and other entities may collaborate on proposals.

However, one partner must be a Michigan-based financial institution that lends in Michigan and is a clear beneficiary of the proposed work.

No. Applicants must be legally established entities at the time of application and eligible to enter into a State of Michigan grant agreement.

Yes. Organizations that received funding under prior MI Healthy Climate Challenge rounds may apply for Challenge #3.

However, proposed projects must:

• Be distinct in scope from previously funded work
• Represent a meaningful new activity or expansion
• Not duplicate existing grant-funded activities

Access to capital has been consistently identified as a need among Michigan lenders.

Capital providers may partner with eligible financial institutions in a variety of ways. For example, grant funds may support the development of a new or expanded green lending product that is capitalized by a capital provider.

Applicants are encouraged to propose partnership models that strengthen Michigan’s clean energy financing ecosystem and attract additional investment into the state.

Challenge #3 supports activities that expand or strengthen green lending capacity in Michigan. This may include:

• Development or expansion of green lending products
• Market analysis and product design
• Community engagement and borrower education
• Lender training and internal capacity building
• Contractor–lender coordination
• Borrower technical assistance
• Development of underwriting standards or risk mitigation tools
• Early-stage project development support

The examples above are illustrative and not exhaustive. Applicants are not limited to these examples. Projects must clearly demonstrate how the proposed activities will expand access to climate-aligned financing in Michigan.

Challenge #3 funds cannot be used as loan capital.

For purposes of Challenge #3, green lending refers to financial products that support projects aligned with the goals of the MI Healthy Climate Plan.

This may include financing for:

• Clean and renewable energy projects
• Energy efficiency improvements
• Building electrification
• Projects that reduce greenhouse gas emissions
• Other climate-aligned infrastructure or upgrades

The program is focused on expanding access to affordable, scalable clean energy financing and strengthening Michigan’s green lending ecosystem.

No. Challenge #3 funds cannot be used as loan capital.

Challenge #3 is designed to build capacity and expand green lending infrastructure. This grant will not fund individual clean energy projects nor finance or contribute to the financing of direct installation of individual clean energy projects.

Michigan looks to build green lending capacity based on ongoing conversations with lenders and stakeholders emphasizing lender need for enabling funding to expand green lending operations.

Applicants interested in green bank best practices may look to examples such as:

• New York Green Bank
• Connecticut Green Bank

However, Challenge #3 is designed specifically for Michigan’s lending landscape and is not prescriptive to any one model.

All MI Healthy Climate Challenge grants are subject to standard State of Michigan grant management and oversight procedures.

These include:

• Clearly defined scopes of work
• Budget review and approval
• Performance metrics and reporting requirements
• Financial documentation and compliance standards
• Ongoing monitoring throughout the grant period

Funds are federal in nature and will be subject to the following special terms and conditions.

Awardees are expected to demonstrate measurable progress aligned with program objectives and are accountable to state reporting and audit requirements.

Strong applications will:

• Demonstrate a clear need in Michigan’s lending ecosystem
• Show meaningful partnership with a Michigan-based financial institution
• Articulate how the project addresses the identified need to expand green lending in Michigan
• Include measurable outcomes

While Challenge #3 is open statewide, applicants are encouraged to consider how their project supports equitable access to clean energy financing, including in communities that have historically faced barriers to capital access.

All funded projects must be completed by August 30, 2027.

Applicants should propose realistic and achievable implementation timelines.

While it is not required, proposals that include matching capital may be viewed more favorably.

Yes.

Watch the Growing Green Lending webinar recording