What are these programs?
These building efficiency programs are funded by private capital to pay for building improvements such as energy/water conservation or solar panels. The costs are then applied to property taxes and paid over time. It’s completely voluntary on the part of customers. There are two programs available in Anaheim:
• The California HERO program – tailored to residential single-family homes
• FIGTREE PACE – tailored to multi-family and commercial buildings
What is PACE financing?
Property owners may obtain financing for energy efficiency, water conservation and solar energy improvements that is repaid as assessments on their property tax bills. The advantages of PACE financing include no money down and no requirement for credit ratings or credit applications.
- The obligations become assessments on the property and, if the property is sold, the obligation remains with the property and the assessments are paid by the new owner. In some cases, the new buyer will ask the seller to pay off the obligation or the new mortgage company will require it to be paid off before they will provide a mortgage on the property.
- The program is structured to tie the term of the assessments to the useful life of the improvements. Terms typically range between 5 and 20 years. For example if the funds are used to pay for a new energy efficient air conditioning system that is expected to last for 15 years, the loan will not be for longer than 15 years.
- The interest rate is determined by the financing company. In addition, there are costs for several fees that are charged as part of the application and payment procedures.
What happens if a owner sells the property?
Since it’s an assessment on the property, it would of course be disclosed, and the new buyer would have to negotiate whether to have the seller pay it off, or continue the assessment.
What is the length of payment? – ie. is a homeowner going to be paying 30 years for a 10 year improvement?
The program is structured to tie the term of the assessments to the useful life of the measure to alleviate this concern. Terms typically range between 5 and 20 years.
How do I get more information?
Currently, two financing companies are authorized to provide PACE financing on properties in Anaheim.
Although each company can finance both residential and commercial properties, the California HERO Program is tailored to residential single-family homes and Figtree PACE deals mostly in multi-family and commercial buildings.