Property Assessed Clean Energy (“PACE”) financing has allowed thousands of homeowners afford home improvements they needed or wanted to increase the safety, health, and energy-efficiency of their homes. According to the U.S. Department of Energy, as of 2019, over 200,000 homeowners have made $5 billion in energy efficiency and other improvements to their homes through PACE financing.1
Although the residential PACE financing program is currently available in various states, the PACE program is quickly becoming a popular home improvement financing option in the states of California and Florida. PACE programs are established at the state level first by enacting legislation that authorizes the adoption of PACE assessment districts which are then administered at the local government level, what this means is that eligibility requirements may vary from city to city within the same state.
Since PACE is not considered a home improvement loan, but rather a voluntary tax assessment, the financed amount is collected and secured in the same manner as any other special assessment against the property – through the property tax bill. The details and eligibility requirements of PACE residential programs vary from state to state and at the local level. Furthermore, the eligibility requirements may vary by PACE provider depending on their risk tolerance.
Below are some of the most common and basic requirements to qualify for PACE financing. Click here to confirm your eligibility with an authorized PACE provider in your area.
Property Must Be Located In A Participating Community and Meet Program Requirements
Local governments ultimately choose whether or not their community will participate in a PACE program. Therefore, one of the first requirements in determining eligibility for PACE financing is confirming the property is located in the financing district, county, or other applicable municipality that has approved the program in its jurisdiction. The property must also meet program requirements.
Click here to contact an authorized PACE provider in your area who can check if your property is located in a participating community and if it meets program requirements.
Eligible Home Improvement Project
PACE financing is not traditional home improvement financing that can be used for any type of home improvement project. PACE financing is only available for home improvement projects that increase the property’s safety, energy and water efficiency, and resiliency such as wind hardening or seismic retrofits. Some of the most common eligible home improvement projects include:
- Air-source heat pump
- Attic insulation
- Ceiling insulation
- Cool roof – performance or prescriptive
- Central air conditioner HVAC
- Duct replacement
- Radiant barrier
- Storm shutters
- Solar panels
- Solar water heater
- Water softener
- Wind-resistant windows & doors
- Wind-resistant shingles
Click here to check if your home improvement project is eligible for PACE financing.
Work Must Be Completed By a Registered Home Improvement Contractor
The funds from PACE financing are paid directly to the contractor upon the PACE provider receiving a Completion Certificate signed by at least one of the homeowners and the contractor along with any other supporting documentation. Therefore, the home improvement contractor must be already registered or register with the PACE provider of your choice prior to completing the project.
It is highly encouraged that you obtain multiple bids on your project from registered contractors. The bids should be written estimates that include a detailed scope of work with itemized cost estimates for all work performed (e.g., material, labor, permits, taxes, and fees). If you have not found a contractor yet, ask your PACE financing company to provide you with referrals to multiple contractors in your area.
PACE financing is different than traditional methods of home improvement financing such as, a cash-out mortgage refinance, Home Equity Line of Credit (“HELOC”), Home Equity Loan, Personal Loan, and Credit Cards, because the applicant’s credit score does not have any bearing on determining their eligibility for the program. The applicant’s eligibility is generally determined based on the following basic eligibility criteria:
- Homeowner(s) must have a history of paying their taxes on time
- Homeowner(s) have not had any recent active bankruptcies. Consult with an authorized PACE provider for more details.
- Income for each of the homeowners to determine max financing amount
Click here to get learn more 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.
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.
- The U.S. Department of Energy: Residential PACE. https://www.energy.gov/eere/slsc/property-assessed-clean-energy-programs#residential
- The U.S. Department of Energy: Best Practice Guidelines for Residential PACE Financing Programs. https://www.energy.gov/sites/prod/files/2016/11/f34/best-practice-guidelines-RPACE.pdf