PACE Finance

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Property Assessed Clean Energy – PACE Finance

PACE Finance is a new financing instrument available in certain districts across the country anywhere PACE has been approved by the state and city or county. It provides property owners with capital to fund improvements that are proven to create water efficiency, energy efficiency, and/or alternative/renewable energy on-site. Unlike a traditional loan, PACE is paid back as an assessment on the property’s taxes usually twice per year.

Vireo – PACE Services

Vireo is now providing PACE finance services to property owners across the US for single properties and portfolios. Vireo services include work with the public/private parties necessary for success, legislative and administrative initiatives, mortgage/lien holding banking parties, and a range of private sector funding parties targeting a variety of project technologies and deal sizes. We are uniquely positioned to provide this finance solution for parties with interests in multiple markets and project components or technologies.

PACE Benefits

    • Funding for up to 100 percent of installed costs including labor, materials and permits
    • Lower operating costs to increase property value
    • Project costs and their energy savings may be passed through to tenants
    • If the property is sold, the financing assessment stays with the property and transfers to the new property owner, along with the energy saving benefits
    • No personal guarantees required
    • Projects can be cash-flow positive from day-one

Property Eligibility Criteria

About half of the United States is eligible for PACE. Improvements must be permanently affixed to the property, and be proven either to save energy or water or to generate clean energy. Property owners must satisfy certain basic underwriting criteria. Applicant must be the legal owner of the property, and all of the legal owners of the property must agree to participate. In most states, Mortgage holder(s) must explicitly consent to the PACE assessment in writing. Property owner must be current on existing mortgage, property tax and assessment payments. Property owner must not have defaulted on the deeds of trust. Property must not be subject to any involuntary liens or judgments. Property must not have been delinquent on property taxes for the past five years. Property owner must not be in bankruptcy or declared bankruptcy within the last 10 years.

Target Markets

  • Assisted Living, Hospitals & Hotels
  • Faith Based Building and Non Profits
  • Multi-Use Residential
    • Industrial
    • Office
  • Warehousing/Cold Storage
  • Manufacturing
  • Retail – Shopping Centers

Sample Project Economics

  • Project Cost $1,000,000
  • Interest Rate 7%
  • Term 15 Years
  • PACE Assessment $110,000/year
  • Energy Savings $150,000/year
  • Excess Savings $40,000/year
  • Value Increase $533,000 (Cap Rate = 7.5%)