Property Assessed Clean Energy (PACE) Environmental Planning and Community Resilience Division

PACE Broward

A Brief History California (2008) FL Statute 163.08 (2010) First to pass PACE legislation FL Statute 163.08 (2010) Key difference: authorizes improvements for storm protection Solar and Energy Loan Fund, Port St. Lucie County Miami Clean Energy Corridor When PACE legislation passed in FL in 2010 there were only 3 states with PACE legislation.

PACE Programs – US Map Now there are over 30 states with PACE enabled legislation, in over 2,000 municipalities

PACE Economic Impacts Source: PACENation Over 2 billion dollars has been financed using the PACE protocol.

Why PACE? Voluntary Furthers regional energy and resiliency goals Supports economic development Provides consumers with long-term cost savings Innovative means of financing PACE is innovative, it gives consumers a different financial tool to consider, for example, for commercial properties PACE is off-balance sheet financing, for home owners allows the owner to finance improvements without a large up-front cash payment and it is not based on the individual’s credit The PACE program is completely voluntary PACE furthers regional energy and resiliency goals by funding specific qualifying projects related to energy, According to stats from the HERO program for every $100,000 invested leads to 182 tons of CO2 emissions  PACE supports economic development by creating local jobs and building local skills sets for contractors The proper PACE projects will benefit from long-term cost savings on insurance and energy bills

Public Private Partnership PACE Districts PACE Providers Property Owners Broward County Joint Powers Authorities are a common PACE program umbrella structure, where local governments opt to join one of a number of state-sanctioned authorities that contract with companies turn-key PACE Program offering legal infrastructure, financing, training, and outreach to property owners and the contractor community to administer and offer PACE financing.  Bond Issued Joins Through Inter-Local Agreement Program Administrators Manage the Program Located in a Participating City and have a Qualifying Improvement Lender – Provides funding Levies the Assessment on the Property Tax Bill Process Applications, Qualify Projects, and Arranges Financing Cities Opt In

Participating Cities Nearly 70% (by pop.) participating Initial program launched in June Program expansion August – December to add 2 additional Providers Number of Providers by city may vary

Broward PACE Providers Renew Financial “RenewPACE Program” Ygrene “Clean Energy Program” CounterPointe Energy Solutions “Alliance NRG Program” Coming Soon! Renovate America “HERO Program”

Qualifying Improvements Must be permanent improvements ROOFING LIGHTING INSULATION HURRICANE SOLAR HEATING & A/C WINDOWS & DOORS

How PACE Works Minimum $2,500 Typical term of 10 to 20 years - Debt repaid through annual property assessments, in conjunction with property tax bill Assessment tied to property, not individual (not reflected as personal debt) Commercial and residential programs

PACE Considerations Interest and various fees PACE treated as senior lien Potential FHFA implications Qualified improvements generally increase the value of a property Nonpayment treated the same as nonpayment of taxes In July 2010, the Federal Housing Finance Agency (FHFA) along with Fannie Mae and Freddie Mac objected to the senior lien status that residential PACE financing shares with other property taxes and assessments and took steps to stop residential PACE. The Agency issued a statement advising Fannie Mae and Freddie Mac to avoid buying mortgages with PACE assessments and hinted at more drastic actions, such as finding PACE homeowners in default under their mortgages. These actions stalled the development of residential PACE programs. Despite these concerns, residential programs continued to develop and began to gain traction in 2012-2013. In August 2015, President Obama and the FHA announced support for the PACE concept

Refinance your mortgage It Depends on Your Circumstances You have options, PACE is now another option, may not be best Due your due diligence Research options Talk to your financial adviser Basic good guidance: Don’t finance improvements for a longer time than they will last Bank Loan Construction loan Home equity loan Credit cards Borrow from your 401(k) Reverse mortgage Contractor financing  Refinance your mortgage Cash Home equity line of credit  PACE 100% PACE Financing (no out of pocket cash drain), and approval process is normally quick. You also may not have to start making payments for a while and your energy savings could be more than your annual assessment depending on what projects you are completing.

Consumer Protection Provisions PACE providers must ensure contractor pricing is within market norms PACE providers must ensure one of the following happens: Insurance and/or energy cost savings ≥ annual assessment Mortgage lender consent, or approval to escrow assessment Annual assessment shall not exceed 4% gross annual income, with annual property taxes/assessments not to exceed 5% FMV PACE providers must disclose financial details to property owner

PACE Project Cost/Income Threshold Examples

Broward.org/GoGreen PACE Broward Contact Broward County Environment @BrowardEnv