If you’re looking for home improvement financing, then you are in the right place. Property Assessed Clean Energy (“PACE”) financing is a great alternative to loans to do home improvements that allows you to access your home equity to fix up your home with no money upfront. Although the PACE program is available in various states, it is becoming a more and more popular option for homeowners in Florida and California.
With PACE you can finance 100% of the cost for eligible home improvement projects and products. Unlike traditional financing, PACE uses private capital to fund every eligible home project. Financing is then collected through an assessment on the property tax bill and a lien is placed on the property until the financing is repaid in full.
Qualifying for PACE financing is generally easier than qualifying for home improvement loans as the homeowner’s credit score does not have any bearing on their eligibility. Plus, this type of home improvement financing offers competitive low fixed interest rates, payment terms of up to 30-years for some projects, no cash-upfront, and more, which makes it an attractive and affordable home improvement financing option for many homeowners.
Obtaining PACE financing for an eligible project is simple:
Obtain a financing pre-approval
Find an authorized PACE provider, also known as a PACE program administrator, to help you determine your eligibility. Click here to contact a PACE provider in your area. The PACE provider will run an address check to confirm your property is in a PACE participating community as well as confirm the home improvement project eligibility.
If both are eligible for PACE financing, the provider will then proceed to take your application to provide you with a maximum financing amount. Generally, PACE financing is available for a minimum of $5,000 and a maximum of $250,000. During this step you should be prepared to provide the following information to facilitate the process:
a)The name and date of birth for each of the homeowners listed on title
b) The social security number for all homeowners – this is only needed to pull a soft credit check for each homeowner to look at elements necessary to confirm eligibility, such as mortgage payment history
c)The total household annual income
d) Estimated balance of all property-secured financing (Mortgage, Home Equity Line of Credit “HELOC”, Home Equity Loan, other PACE financing, etc.)
e)The type of project you’re seeking to finance (solar panels, roofing, windows and doors, HVAC, etc.)
f) The name of the contractor, if you have already selected one
g) The estimated cost of your project, if available
Select a registered home improvement contractor
Unlike traditional financing where you can request to receive the funds from the bank or lender deposited into your account, the funds from PACE financing are directly disbursed to the contractor. Therefore, the contractor must be registered or register with the PACE provider of your choice in order to receive payment.
PACE providers generally work with a large network of home improvement contractors, so chances are that your contractor will already be registered, and if not, the PACE provider can work with your contractor to register them in the program. If you have not selected a contractor, ask your PACE provider to provide you one or more referrals to consider.
Once you have selected a registered contractor, financing documents will be issued and sent to you for signature. After the PACE provider receives the signed financing documents, the contractor will receive a Notice to Proceed. The contractor cannot begin installation of your project prior to receiving the Notice to Proceed.
Complete the home project
Contractors normally have a 150-day period from the date the Notice to Proceed is issued to install the products and complete the project. Funds will be disbursed directly to your contractor once the project is completed, which is confirmed when the PACE provider receives the Completion Certificate signed by at least one of the homeowners and the contractor along with any other supporting documentation.
Repay the financed amount
It is important to note that PACE financing is not considered a home improvement loan but rather as a voluntary tax assessment (a lien against the property). Once your project is funded, the PACE provider will send the required documentation to your county to place an assessment on your property.
The assessment will then appear as a new line item on your property tax bill, and payment will be due under the same schedule as your taxes (annual or biannual) until the financed amount is repaid in full. If you wish, you can prepay the financing amount in whole or any other amount of $2,500 or more at any time.