If you are a residential homeowner currently living in California, Missouri or Florida, you may qualify to get home energy improvements or renewable energy for your home paid for through RPACE financing.
RPACE financing is paid for through a tax assessment added to your home’s property tax bill.
To be approved for RPACE financing, a FICO score is not required and you can be approved for RPACE financing based on a percentage of the appraised value of your home, up to as much as 20% of your home’s appraised value.
If you have an existing mortgage on your home, mortgage lender consent may not be required because RPACE financing is not a mortgage. RPACE financing is a tax assessment added to your property taxes. The dollar amount of the tax assessment is equal to the cost of your home improvements and is paid for over 15-30 years. You may choose any financing term that is less than or equal to the useful life of the home energy improvements. The longer the term, the higher the interest rate will typically be.
Interest rates for RPACE financing are fixed and may range from 4.63% to 8.5%. This is higher than mortgage or HELOC interest rates today, but much lower than using a credit card to pay for anything in installments.
If you sell your home after receiving RPACE financing, the unpaid balance of your tax assessment will be paid for by the new owner.
The potential benefits of RPACE financing include energy savings, tax savings and flexibility when paying for home improvements that may increase the value of your home. A 2015 study by the Lawrence Berkley Laboratory suggests that some homeowners are willing to pay a premium for homes that already have solar panels installed.
All energy efficiency investments have a return on investment associated with them by definition. That said, if you are living on fixed income or an extremely tight budget, you should not increase your monthly expenditures by going into debt unless you can reasonably calculate a positive savings to investment ratio, as illustrated above in the CPACE example.
Whether you’re a business or individual in America, if anyone (whether they’re wearing overalls or wearing a suit and tie) is offering you money, it pays to read the fine print. Caveat emptor. Or in this case, borrower beware… Qui mutuum accipit cave.
But by understanding the value of savings to investment calculations, all borrowers can better evaluate their options from PACE programs.
List of PACE Lenders and Financing Options
The following lenders provide commercial PACE and residential PACE financing options in states where PACE programs are available.
Cleanfund
Based in Sausalito, CA, CleanFund Commercial PACE Capital is a leading provider of long-term financing for energy efficiency, water conservation, renewable energy and seismic improvements for commercial, multifamily and other nonresidential properties in the U.S. CleanFund makes it easy and affordable to finance energy, water and other vital improvements to commercial properties that increase their value and decrease environmental impact.
Figtree Financing
Figtree Financing provides PACE financing for commercial buildings. The Figtree OnDemandPACE™ Program provides CPACE Financing to help commercial property owners improve their properties and lower their utility bills with energy efficiency, renewable energy, and water conservation upgrades. Figtree Financing has successfully funded millions of dollars of property improvements with commercial PACE Financing.
Greenworks Lending
Greenworks Lending is a cutting edge private finance company that taps into the power of C-PACE to unlock energy savings in commercial real estate. Founded by the architects of the most successful commercial PACE program in the country, the team at Greenworks Lending has more experience in PACE than anyone in the industry.
Renew Financial
Renew Financial offers both residential and commercial PACE financing. Renew Financial was founded in 2008 by Cisco DeVries, who brought together a multidisciplinary team of experts in finance, technology, operations, and government policy to innovate the Property Assessed Clean Energy (PACE) financing model.Contractors interested in working with Renew Financial can apply here.
Renovate America
Renovate America provides both RPACE and CPACE financing. Renovate America is one of the largest lenders of PACE programs for commercial and residential PACE. Renovate America offers traditional PACE financing called HERO through a tax assessment on a property tax bill, and more conventional financing called Benji that is paid for like a traditional loan.
Spruce
Spruce Financing provides financing for residential solar and energy efficiency improvements that may help homeowners save on power, heating and cooling, and water.
Ygrene
Ygrene provides both commercial and residential PACE financing, depending on the state. YgreneWorks provides immediately accessible financing with no up front payments for energy efficiency, renewable energy and, in certain areas, water conservation, storm and wind protection, electric vehicle charging stations and seismic upgrades.