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1. What are the pros and cons of PACE?

The pros and cons depend on each individual project and the property owner's financial situation. There may be other types of financing available and the County does not guarantee the PACE program is the best financing option. You might want to discuss options with your financial adviser. 

Here are a couple general advantages and disadvantages to consider when making your decision:

• PACE allows a property owner to finance improvements without a large up-front cash payment. 
• PACE incentivizes energy and wind mitigation improvements, since many property owners are hesitant to make property improvements if they think they may not stay in the property long enough for the resulting savings to cover the upfront costs. 
• The energy and insurance savings should be greater than the PACE assessment over time. Before you sign an agreement, make sure you understand what projects have the greatest energy and insurance savings. You may want to call your property insurance company to ask about rebates for particular home improvement items. It could also mean completing a home energy survey or home energy audit. The Department of Energy's Energy Saver webpage is a national resource to learn more about energy saving products and services. 
• PACE repayment periods vary from 5-20 years.
• Qualified PACE improvements generally increase the value of the property.
• Under Florida law, property taxes stay with the property when it is sold and the same is true of an assessment. Therefore, if you sell the property the new homeowner could then take over the balance of the assessment; however, the seller's lender or the buyer's lender (Mortgage Company) may require pay off the remaining outstanding balance of the assessment before the property can be refinanced or sold. This is particularly true for Freddie Mac and Fannie Mae mortgages.
• Failure to pay the PACE assessment is treated the same as nonpayment of taxes.

2. 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. Should a transfer of property ownership occur, the PACE assessment obligation stays with the property, not the property owner. Therefore, if you sell the property the new homeowner could then take over the balance of the assessment; however, the seller's lender or the buyer's lender (Mortgage Company) may require pay off the remaining outstanding balance of the assessment before the property can be refinanced or sold. This is particularly true for Freddie Mac and Fannie Mae mortgages.

Important considerations include: 

• 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. Some mortgage lenders (particularly Freddie Mac and Fannie Mae) may be unwilling or unable to modify or refinance a property subject to a PACE assessment due to the type and position of the assessment requiring payment in full prior to refinancing or sale of property.

3. 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.

4. What improvements qualify for PACE financing?

PACE Qualifying Improvements shall mean those improvements to real property provided for in Section 163.08(2)(b), Florida Statutes, including, but not limited to, energy conservation and efficiency, renewable energy, and wind resistance improvements. To qualify, projects must be permanent improvements for example new roofs, air conditioning units, impact windows, and solar panels. For questions regarding specific qualifying improvements, contact the individual PACE Providers. 

To ensure the greatest energy and insurance savings for your project, before you sign an agreement, make sure you understand what projects would have the greatest energy and insurance savings. That means you may want to call your property insurance company to ask about rebates for particular home improvement items. It could also mean completing a home energy survey or home energy audit. The Department of Energy is a resource to learn more about energy saving products and services. 

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. 

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

There is no short-term deadline in which to apply. The amount of funding available is significant. There are multiple PACE Providers and Approved Contractors from which to choose for a project. You should not feel rushed to enter into a financial agreement by any provider or contractor. 

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). 

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, PACE Providers must ensure the following: 

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  • 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; 
  • 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 may not exceed 90% of the property's fair market value; and
  • The total mortgage-related debt on the underlying property plus the PACE program financing may not exceed the fair market value of the property.

6. 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 HOA restrictions, it is the responsibility of the Property Owner to obtain authorization that the requested Eligible Products meet all the HOA requirements, as applicable. For specific project eligibility, contact the individual PACE Providers.

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

PACE is designed to allow the repayment to stay with the property; however, accelerated repayment could be a condition of title transfer, at the discretion of the seller, buyer and lender. When a property owner sells or refinances their property, state statute authorizes the assessment to stay with the property; however, the seller's lender or the buyer's lender (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."

8. What happens if my PACE assessment is not paid?

Under Florida Law, a PACE assessment (treated like a lien) is recorded on the property to secure the financing and will have a higher priority than most other liens on or rights in 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. The Monroe County Property Appraiser (not Monroe County Board of County Commissioners) establishes the value of property and exemptions.

9. Can I pay 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 associated and/or minimum payment amounts with early payoff. 

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