What is PACE Financing?

If you’re in the market for home improvement loans you are probably considering one or more of the traditional options – a cash-out refinance, Home Equity Line of Credit (“HELOC”), Home Equity Loan, personal loans, or credit cards – and it is likely that you have overlooked a unique option called PACE financing.

PACE stands for Property Assessed Clean Energy, and it is an innovative financing option that allows you to access your home equity to pay for 100% of the cost for eligible home projects to make your home safer, healthier, and more energy-efficient. As of 2019, more than 200,000 homeowners made $5 billion in energy efficiency and other improvements to their homes through PACE financing.1

PACE providers have adopted their own name for the program to distinguish themselves in the market. The most popular name program variations you may come across during your research may include: Home Energy Renovation Opportunity (HERO program), RenewPACE, CaliforniaFirst, The Alliance NRG Program, E3, Ygrene PACE, and PACE Funding to mention a few.

The PACE program exists through state legislation and is authorized by local governments. PACE funding is made through public-private partnerships with one or more PACE providers, also known as PACE program administrators. PACE financing is a popular option for Florida and California homeowners, but it is also available in other states.

It is important to note that PACE financing is a voluntary tax assessment and not a PACE loan. The reason being is because the amount financed is repaid through a voluntary tax assessment attached to your property that will appear as a line item on the property’s tax bill until the financing is repaid.

PACE financing offers competitive low fixed interest rates, repayment terms of up to 30 years for some projects, zero cash-upfront, and many other unique features to provide the flexibility and access to the funds homeowners need to make their safety and energy related home improvement projects a reality.

PACE financing basic eligibility criteria

First things first, the property must be existing-residential-construction (up to 4 units) and located in a participating community, click here to check if your address is eligible for PACE financing. Mobile homes and condominiums are also eligible as long as they meet the provider’s criteria.

Generally, a bad credit or excellent credit score does not have any impact on your eligibility. When you apply for PACE financing your credit score will not be taken into consideration to determine your eligibility. However, as part of the process the PACE provider will pull a soft credit check for each of the homeowners to look at elements necessary, such as mortgage payment history, to determine eligibility for financing.

The maximum financing amount is based on factors such as the property’s available equity and the homeowner’s annual income. Generally, PACE financing is available for a minimum financing amount of $5,000 and a maximum of $250,000.

PACE financing is available for hundreds of products and projects

A large variety of energy and safety related home improvement projects and products are eligible for PACE financing. Some of the most common ones include (confirm eligibility with your PACE provider):
  • Air-source heat pump
  • Attic insulation
  • Ceiling insulation
  • Cool roof – performance or prescriptive
  • Duct replacement
  • Earthquake retrofit
  • Generators
  • HVAC
  • Impact windows and doors
  • Radiant barrier
  • Roof replacement
  • Storm shutters
  • Solar panels
  • Solar water heater
  • Water softener
  • Wind-resistant windows and doors
  • Wind-resistant shingles
Find out today if your property and home improvement project are eligible for PACE financing. Click here to get started or call 866-891-6879 to contact an authorized PACE provider in your area. An expert PACE financing advisor will answer all of your questions and provide you with a FREE and No-Obligation quote.

Important Information:

PACE financing is subject to credit approval. Underwriting requirements may vary and are subject to change. Additional underwriting requirements and restrictions apply. PACE financing may be required to be repaid upon refinance or sale. Homeowners should perform due diligence before selecting a home improvement contractor. PACE financing is private financing that must be repaid in full. PACE financing is not a government subsidy.

Article Sources:

  1. Source: Office of Energy Efficiency and Renewable Energy. Property Assessed Clean Energy Programs https://www.energy.gov/eere/slsc/property-assessed-clean-energy-programs
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