Obtaining home improvement financing is an important decision and one that often takes careful consideration and research. It's normal for you to have questions and hopefully the answers below can help you determine if PACE financing is the right option for your home improvement financing needs.
What is PACE financing?
The Property Assessed Clean Energy ("PACE") program exists through state legislation and is authorized by local governments. PACE financing allows homeowners to enter into a voluntary contractual assessment, known as a PACE assessment, to finance energy and safety related home improvements that are permanently fixed to real property.
How is PACE financing different from traditional financing?
Unlike traditional financing methods, PACE is property-based financing and the program is funded through public-private partnerships with one or more PACE providers (also known as PACE program administrators). PACE financing uses private capital to fund every home improvement project. The amount financed is then collected through a voluntary assessment on the property tax bill and a lien is placed on the property until the financing is repaid in full.
Plus, the program offers:
- No minimum credit score to qualify
- Zero money upfront required
- 100% financing up to $250,000
- Competitive fixed interest rates
- Payment terms of 5, 10, 15, 20, 25, or 30 years
Depending on the expected useful life of the product(s) being installed
What are the eligibility requirements?
PACE is property-based financing, which means that the eligibility requirements are primarily based on the property itself and are not based on the homeowner's FICO score. For example:
- The property must be located in a participating community
Click HERE to check if your property is in a participating community
- The property taxes must be current
- All mortgage debt against the property must be current
- There are no recent foreclosure proceedings
- The home improvement project and product(s) being installed must meet program requirements, etc.
Underwriting requirements vary depending on your state and jurisdiction and are subject to change. Additional underwriting requirements and restrictions apply. Call us at 844-736-3934 to confirm your eligibility.
What kind of home improvement projects are eligible for PACE financing?
PACE financing is available for a large variety of energy and safety related home improvement products and projects. Some of the most common ones include:
- Air-source heat pump
- Attic insulation
- Ceiling insulation
- Duct replacement
- Heating, Ventilation, and Air Conditioning ("HVAC")
- Radiant barrier
- Solar panels
- Solar water heater
- Water softener
- Windows and doors
Call 844-736-3934 to see if your project is eligible.
Is PACE financing a government subsidy?
No, PACE financing is not a government subsidy. PACE financing is private financing that must be repaid in full.
How much can be borrowed with PACE financing?
Qualified homeowners can borrow a minimum of $2,500 and up to $250,000, to cover the cost of eligible home upgrades.
How does repayment work?
The amount financed through PACE will appear as a new line item on the property tax bill. A lien will be placed against the property until the amount financed is paid back in full. While PACE payments are billed once per year, the way the county collects the property taxes will determine when and how a homeowner will pay each annual PACE payment.
If an impound/escrow account is used to pay property taxes, homeowners should contact their lender to discuss increasing their monthly impound/escrow payments accordingly.
Are there any prepayment fees?
No, there are no fees for paying all or a portion of the financing early. Homeowners can pay off their PACE financing at any time or in increments of $2,500.
Can I use any home improvement contractor?
Since payment is made directly to the contractor after the project is completed, and the homeowner signs off on it, the contractor must be registered with Renew Financial. CLICK HERE to locate a registered contractor.
All participating contractors must have a valid and active Contractor's license with their State's licensing board and can register HERE with Renew Financial
Are there consumer protections?
Consumer protections are built into PACE financing. These include, but are not limited to:
- Direct customer service support even after your project is completed
- Comprehensive set of disclosures to enabling you in your decision making
- A verification call to ensure that you understand all details of the program
- A completion certificate to ensure you’re satisfied before the contractor is paid
- No prepayment fees so you can pay the assessment in full ahead of schedule
- Contractor oversight including a due-diligence review and verification
Why ask for my Social Security Number if my credit score does not matter?
As part of the application, Renew Financial will perform a soft pull on the credit report for each homeowner to verify elements necessary to determine some eligibility for financing, such as mortgage payment history.
What happens to the PACE assessment if I want to sell or refinance my home?
Often mortgage lenders will require the PACE assessment to be paid off in full at the time of sale or refinance. Subordination of the PACE assessment is not an available option.
Don’t see your question listed here? Contact us at 844-736-3934 to find out if PACE financing is right for you!
PACE financing is subject to approval. Underwriting requirements and restrictions apply. PACE financing is secured by a lien on the subject property and often required to be repaid upon refinance or sale. Homeowners are encouraged to use PACE financing responsibly. PACE financing is private financing that must be repaid in full. PACE financing is not a government subsidy. Renew Financial is a private company and not a government entity. The installation or construction of property improvements financed with a PACE assessment is provided through a home improvement contractor or other third-party provider, and not by Renew Financial or a government entity. Homeowners should perform due diligence before selecting a home improvement contractor. Financing provided in California through Department of Financial Innovation and Protection License No. 60DBO-90653.
All content provided on this blog is for informational purposes only. Renew Financial makes no representations as to the accuracy or completeness of any information found by following any link on this site. Renew Financial is not a financial or home improvement advisor and information contained in this post should not be viewed as legal or financial advice.