Why is PACE a Worthwhile Option
PACE financing can often be a viable alternative to a standard home improvement loan.
What are the positives of PACE financing?
Unlike banks, the ultimate goal of these programs is not to earn interest for their shareholders. Rather, PACE options are implemented to help more people afford upgrades that will make their homes more efficient and more resilient.
Rates are generally low, and they do not fluctuate.
Best of all, Homeowners pay for their improvements incrementally as a line item on their annual property taxes. This allows them to reap the benefits of a more energy-efficient home and then use some of the savings on their energy bills to pay for the project over time. We specialize in insulating existing homes, also referred to as retrofitting. Our equipment allows us to handle difficult or simple installations. We do Cool Roofs, and Cool Walls. Our main goal is to reduce your energy consumption while saving money on your energy bills. You will also make a significant contribution towards helping the environment. Not offered Everywhere.
If you decide that PACE financing is a viable option:
The first step is determining whether the program is offered in your local area. States must approve the financing programs, and local authorities (either cities or counties) administer them. Though most localities are interested in improving the energy efficiency of homes so that pollution levels are lowered and there is less strain on the energy grid, not all cities and towns offer PACE financing.
You don’t know much about insulation, the product terms and specifications can be a little intimidating. We’re here to cut through the confusion with simple information to help you understand:
* What insulation can do for you in your home
* The pros and cons of different insulation types
* Steps to take when adding insulation to your home
* Debt of Property and Ability to Pay
PACE financing is tied to the property, not to the homeowner. This means that the payments for the project are still paid through the property taxes after a change in ownership. The payments are, in essence sold along with the house. Therefore, a homeowner need not commit to living in a home for the next 20 years to take advantage of PACE financing.
That said, in order to obtain PACE financing, most municipalities want assurances that a property owner can make the annual payments for the improvement. In most cities, this is done by looking at the record of past property tax payments. (As long as you have been on time with your property taxes in the past and are not currently delinquent, everything should be fine on this front)
How Big Should the Improvement Be?
According to the U.S. Department of Energy (DOE) guidelines, PACE assessments should not exceed 10% of the property’s overall value. Also, because there are administrative costs that the local government needs to recover, projects cannot be too small. The DOE recommends that local authorities put a minimum of $2,500 on PACE-funded projects. The goal of these guidelines is to ensure that the financing works for both the homeowners and for local governments.
These rules and measures are meant to increase the likelihood of a profitable upgrade. Banks that offer home improvement loans cannot provide the same kind of risk-to-reward equation – they are only concerned about the borrower’s ability to pay back the loan.
States and cities are becoming aware of the economic and environmental benefits of PACE financing. More and more are ready to adopt this idea and offer it to their citizens.