ABOUT C-PACE FINANCING: PROS AND CONS OF ENERGY EFFICIENCY LOAN PROGRAMS
- Energy Efficiency - HVAC and mechanical upgrades, energy-efficient lighting systems, insultation, etc.
- Renewable Energy - Solar panels, fuel cells, EV stations, etc.
- Resiliency - Stormwater management; fire, seismic, and hurricane measures; etc.
- Environmental Benefits: C-PACE financing can provide cost savings to property owners while allowing their companieds and local municipalities to further their environmental, social and corporate governance (ESG) initiatives.
- Limited Approval / Pushback: Because unpaid C-PACE assessments can create a senior lien on the property, C-PACE financing often rquires lender consent for any property with a mortgage. This can add time and cost to the financing process. C-PACE assessments can also limit refinancing options due to these senior liens. The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac not to purchase or refinance mortgages with C-PACE liens.
- Limits Sale Options: Properties that have C-PACE assessments attached to them can be more difficult to sell, as the new owner has to agree to pay the additional assessments.
- Property Specific Financing: C-PACE loans are structured uniquely for individual properties and require cost / savings analysis specific to that property, making it difficult to utilize for a portfolio strategy.