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What is PACE?

How does PACE work?

What are the pros and cons of PACE?

How is PACE different from other financing options?

What is the interest rate for PACE financing?

Will my credit score impact my ability to qualify for PACE financing?

What improvements qualify for PACE financing?

Is there a time limit or a funding limit on the amount of financing available?

Does a condominium qualify for PACE?

Do I have to pay the remaining PACE assessment in full if I sell my home/property?

What happens if PACE assessment is not paid?

Can I pay off my PACE loan early?

Who do I call if I have a complaint?

 

What is PACE?

Property Assessed Clean Energy (PACE) is a financing mechanism that allows property owners to fund energy efficiency, renewable energy, and wind mitigation projects with little or no up-front costs. With PACE, residential and commercial property owners living within a participating district can finance up to 100% of an eligible project and pay it back over time as a voluntary non-ad valorem assessment on their annual property tax bill. PACE financing is paid back through an assessment on the owner’s property; it is not a loan nor a grant. In addition, although the Palm Beach County Board of County Commissioners authorized PACE financing, it is not a County program.

In 2010, Florida passed Statute §163.08, authorizing local governments to create PACE programs. In 2017 Palm Beach County established a PACE ordinance. Currently the County has agreements with three agencies/districts to provide services in Palm Beach County, each with their own third-party administrators (“Providers”). A list of County-approved Providers can be found on the main Palm Beach County PACE page.

 

How does PACE work?

To apply for PACE financing, you decide on an energy efficiency, renewable energy, and/or wind mitigation project for your property and select a PACE Provider. The application and payment process will vary by Provider; a general flowchart of process steps can be found here. All Providers are held to strict consumer disclosure requirements as outlined in the FL Statute and County Ordinance. All work must be properly permitted and installed by licensed contractors, meeting applicable federal, state, and local energy, wind, and building code standards. See the main Palm Beach County PACE page for links to contractors approved by each Provider.

Generally, once the work has been completed to your satisfaction, the PACE Provider will release funds to the contractor. Then you will repay your Provider through an annual assessment on your property tax bill. Prior to beginning any project, you should discuss the timeline and steps with your contractor and PACE Provider.  

 

What are the pros and cons of PACE?

Whether PACE is right for you depends on each individual project and your unique financial situation. The County does not guarantee the PACE program is the best financing option for you, and other types of financing might be available. You might want to discuss options with your financial adviser.

Here are some things to consider when making your decision:

  • PACE allows a property owner to finance improvements without a large up-front cash payment.
  • Many property owners are hesitant to make property improvements if they think they may not stay in the property long enough for the anticipated savings to cover the upfront costs. PACE incentivizes energy efficiency, renewable energy, and wind mitigation improvements by allowing the assessment to stay with the property, not the owner. This may not apply in the event that the mortgage company requires the homeowner to pay any outstanding balance of the PACE assessment before the property can be sold.
  • The energy bill and insurance savings should be greater than the PACE assessment over time, but this is not guaranteed. Before you sign an agreement, make sure you understand what projects have the greatest energy bill and insurance savings. You can call your property insurance company to ask about rebates for particular improvements. You can also consider completing a home energy survey or home energy audit. The U.S. Department of Energy’s Energy Saver webpage has additional information on energy saving products and services.
  • PACE repayment periods typically vary from 5 to 20 years.
  • Qualified PACE improvements generally increase property value, but this is not guaranteed and the increased value might not equal the cost of the improvement.
  • If you do not pay the PACE assessment, the result is the same as not paying your property taxes. Failure to pay the full tax bill including the PACE assessment could trigger foreclosure and property loss even if the property owner is current on other mortgage lien(s). The PACE assessment is the priority lien, and the lien position may impact options to sell or refinance.
  • Be a diligent, smart consumer and take time to research the program and any financing options available to you. Seek more than one project quote requesting written estimates that include a detailed scope of work with itemized cost estimates (e.g. materials, labor, permits, taxes, fees).

 

How is PACE different from other financing options?

PACE is a special assessment, commonly referred to as a PACE assessment, for an improvement tied to the property. Under Florida law, just as property taxes stay with the property when it is sold, the same is true of a PACE assessment. Therefore, if you sell the property, the buyer could then take over the balance of the assessment. However, the seller’s lender or the buyer's lender (the mortgage company) may require the seller to pay off the remaining outstanding balance of the PACE assessment before the property can be sold, especially with Freddie Mac and Fannie Mae mortgages. This might also be true for refinancing.

Failure to pay the full tax bill including the PACE assessment could trigger foreclosure and property loss even if the property owner is current on other mortgage lien(s). The PACE assessment is the priority lien, and the lien position may impact options to sell or refinance.

 

What is the interest rate for PACE financing?

Currently, PACE financing has an average range of 6-8% interest rate with additional associated fees. Typically, the cost of the project is repaid over a period of 15 to 20 years as an annual payment on the property tax bill; however, other payment lengths are available. Interest rates and fees for the project are set by the PACE Provider at the time that Financing Document/Agreement are finalized with the property owner. More information can be found on the PACE Providers’ websites.

 

Will my credit rating impact my ability to qualify for PACE financing?

Your credit rating should not impact your ability to qualify for PACE financing. However, Providers may run a credit report to determine the status of any mortgage payments, to determine the balance on your mortgage, or to check for bankruptcies. We recommend contacting the individual PACE Providers for specific details on their application process and whether they will run a credit check.

 

What improvements qualify for PACE financing?

PACE Qualifying Improvements are real property improvements specified by Florida law, and include energy conservation and efficiency, renewable energy, and wind resistance improvements. To qualify, projects must be permanent improvements such as new roofs, air conditioning units, impact windows, or solar photovoltaic panels. For questions regarding specific qualifying improvements, contact the individual PACE Providers.

When you are requesting project bids from contractors, ask them to provide energy savings estimates for the products/materials. Look for ENERGY STAR® labeled products/materials.

 

Is there a time limit or a funding limit on the amount of financing available?

There is no short-term deadline to apply. The amount of funding available is significant. There are multiple PACE Providers and approved contractors available. You should not feel rushed to enter into a financial agreement by any Provider or contractor.

There are potential individual limits for the amount of financing available to your property due to the consumer protections found in the County PACE ordinance. For residential properties, the total amount of any non-ad valorem assessment for a property under the PACE Statute may not exceed twenty percent (20%) of the just/fair market value of the property as determined by the county property appraiser, excepted as otherwise provided by statute;

 

Who qualifies for PACE financing?

For residential properties, PACE Providers will check to ensure that:

  • All property taxes and other assessments levied on the property tax bill have been paid and have not been delinquent for the preceding three years, or the property owner’s period of ownership, whichever is less;
  • There are no involuntary liens, including but not limited to construction liens on the property;
  • No notices of default or other evidence of property-based debt delinquency have been recorded during the preceding three years, or the property owner’s period of ownership, whichever is less;
  • All mortgage debt on the property is current and not delinquent;
  • All mortgage-related debt on the underlying property does not exceed 90% of the property’s fair market value;
  • The total mortgage-related debt on the underlying property plus the PACE program financing does not exceed the fair market value of the property.
  • The total estimated annual payment amount for the PACE assessment does not exceed 10 percent of the property owner's annual household income determined using sufficient and credible documentation, for example, using adjusted gross income from a recent tax return; and
  • The property owner is not currently in bankruptcy proceedings.

​For commercial properties, PACE Providers will ensure that:

  • ​Without the consent of the holders or loan servicers of any mortgage encumbering or otherwise secured by the property, the total amount of any non-ad valorem assessment for a property under the PACE Statute may not exceed twenty percent (20%) of the just value of the property as determined by the county property appraiser, except as otherwise provided by statute; 
  • All property taxes and other assessments levied on the property tax bill have been paid and have not been delinquent for the preceding three years, or the property owner’s period of ownership, whichever is less; 
  • There are no involuntary liens, including but not limited to construction liens on the property; 
  • No notices of default or other evidence of property-based debt delinquency have been recorded during the preceding three years, or the property owner’s period of ownership, whichever is less;
  • All mortgage debt on the property is current and not delinquent; and 
  • The property owner is not currently in bankruptcy proceedings. ​

Does a condominium qualify for PACE?

In general, condominiums are eligible. Due to the complexities associated with condominium ownership, assessment payments, rules of the condominium associations, and physical unit design, it is best to contact the PACE Providers directly to research eligibility and process. For properties subject to Homeowners Association (HOA) restrictions, it is the responsibility of the Property Owner to obtain authorization that the requested Eligible Products meet the applicable HOA requirements. For specific project eligibility, contact the individual PACE Providers.

 

Do I have to pay the remaining PACE assessment in full if I sell my home/property?

PACE is designed to allow the repayment to stay with the property; however, accelerated repayment could be a condition of tile transfer, at the discretion of the seller, buyer and lender. When a property owner sells or refinances their property, state law authorizes the assessment to stay with the property; however, the seller’s lender or the buyer's lender (the mortgage company) may require the seller to pay off the remaining outstanding balance of the assessment before the property owner refinances or sells the property. Property owners should consult with their lenders at the time of refinance or sale of the property to determine whether the program assessment will need to be paid in full. In addition, by law, property owners must provide written notice of the assessment to the buyer prior to sale of the property.

The disclosure shall state “QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY, RENEWABLE ENERGY, OR WIND RESISTANCE.— The property being purchased is located within the jurisdiction of a local government that has placed an assessment on the property pursuant to s. 163.08, Florida Statutes. The assessment is for a qualifying improvement to the property relating to energy efficiency, renewable energy, or wind resistance, and is not based on the value of property. You are encouraged to contact the county property appraiser’s office to learn more about this and other assessments that may be provided by law.”

 

What happens if PACE assessment is not paid?

Under Florida Law, a PACE assessment is treated like a lien and recorded on the property to secure the financing. The PACE assessment will have a higher priority than most other liens on your Property, including any mortgage. It is the responsibility of each taxpayer to know when taxes are due, and to pay them before they become delinquent. Failure to receive a tax bill does not relieve a taxpayer of the responsibility for payment, nor is it cause for cancellation of penalties and/or charges if the bill becomes delinquent. Taxes on real property (ad valorem and non-ad valorem) are collected on an annual basis. Read more information about the Palm Beach County process for delinquent property taxes here.

Can I pay off my PACE assessment early?

Yes, you are able to pay off the PACE assessment in full. In some cases a mortgage company may require full pay off prior to selling or refinancing the property. There may be a fee and/or minimum payment amount associated with early payoff, but the Palm Beach County PACE Ordinance prohibits Providers from charging prepayment penalties or “premiums”.

Please contact your PACE Provider directly to discuss early payoff of your assessment.

 

Who do I call if I have a complaint?

For all questions or concerns related to your financing agreement or contractor’s quality of work, please contact the customer service team for the Provider you are working with.

Customer Service Contacts:

Ygrene: (866) 634-1358

Renew Financial: (844) 736-3934​​​

Petros PACE Financing:  (512) 599-9038

​Stonehill PACE: (678) 823-9313 

FortiFi:​ (858) 345-2000

Home Run Financing: (800) 231-6991

Counterpointe Sustainable Real Estate: (855) 248-8900

For General Inquiries, please contact this office at ResilientPBC@pbcgov.org.​

Should you be unable to resolve an issue with your Provider (listed above), you may attempt to informally mediate your dispute by filing a complaint with the Palm Beach County's Consumer Affairs team.