Frequently Asked Questions (FAQ)
What are the eligibility standards for funding with The PACE Program?
The eligibility standards are lax to make it simple for all homeowners to qualify. There are a few key elements used to determine eligibility:
- No more than one late payment on your mortgage in the last twelve months.
- Must be current on your property taxes.
- Must own at least 10% equity in your home to make a decision to participate.
- Bankruptcies must have been discharged no sooner than 2 years before applying.
- Participants currently in a “reverse mortgage” or have not completed duration terms of “save my home California” cannot participate.
How do I make a payment back if I use The PACE Program to fund my projects?
You make payments back to the municipality in which you entered into an agreement with. The PACE assessment gets added to your property tax payment as a line item. However way you currently pay your property taxes is the preferred method of repayment. If approved, you will be provided with financial documentations and a payment schedule based on the fiscal tax year. You may provide this to your mortgage lender to impound into your current escrow.
Why do you need to check my credit if my credit score doesn’t affect my eligibility?
Your credit scores are not necessary for our criteria to access funds through The PACE Program. However, our offices adhere to the Federal Bureau of Consumer Protection and must do a debt to income analysis. We check your credit history to see all debts that you owe and only allow you to access amounts that you can afford. Since you are not going through a bank and everything is being accessed through a municipal bond, no debt will be added in your name personally. The owner of the property will be responsible for the monthly payments.
What can I get for free?
“No-cost” as it pertains to our program refers to re-allocation of debt. We aim to eliminate certain bills or lower them by more than it would cost to perform certain crucial upgrades. There is no money necessary to put down to participate in our funding program. Our Solar Efficiency Package (EP) is combined with numerous upgrades that should cost equal to or less than what you pay for your electricity before participating with the program. Once the EP is installed, your electric utility bill should be reduced to $0.00 (some taxes for still being connected to the power grid may still apply). The payment back to your County should be equal to or less than what your bill used to be. This is what we consider “no-cost”.
How long are the payment terms that I can choose from?
The PACE Program allows partnerships with local municipalities. With their cooperation along with local contractors, terms are generally from 5 years to 25 years depending on the type of project you choose.
How do I claim tax credits for certain eligible projects?
All tax credits have specific tax forms that must be filled out properly and filled along with your annual taxes to the Internal Revenue Service. Currently, the only eligible tax credit by the federal government that is available is the Solar Tax Credit. The 30% rate is available for systems placed in service through December 31, 2019. The credit drops to 26% through the end of 2020, then 22% through 2021 before dropping to zero by the end of 2021.
What are the interest rates?
The interests rates are all generally 5.99% fixed (never increases over time) with a 4.75% rate for 5 year terms. The unique nature of a PACE assessment is that it doesn’t get recorded on your credit report so it does not get added to your FICO debt to income ratio. Unlike a personal loan, the interest may be claimed on a schedule A property tax deduction and will amount to an increased state tax refund (given after filing taxes). The tax deductibility of the interest depends on your tax eligibility and if you meet deduction standards. If so, the net interest rate may be as low as 2.99% after considering all tax deductibility.