PACE Financing: 60-Second Market Review and Insights

Originations and Issuances, by the Numbers

$3.7 billion has been advanced to homeowners under residential Property Assessed Clean Energy (R-PACE). Additionally, nearly $500 million has been advanced for commercial PACE (C-PACE) projects. Although R-PACE currently accounts for just .03% of the $12.8 trillion in household debt, it is one of the fastest growing sources of consumer credit and expected to double within the next year.

Through May 2017, the cumulative issuance of R-PACE loan securitizations between Renovate America, Ygrene, and Renew Financial reached $3.4 billion, up from $2.7 billion through December 2016 and $1.03 billion through December 2015….

Recent comments from HUD Secretary Ben Carson struck a sour note for supporters of the PACE loan program, through which thousands of homeowners and businesses have made energy-efficient improvements to their properties. Just last year, in an effort to boost the program, the FHA, under the Obama Administration, said it would back mortgages on homes encumbered by PACE loans. But earlier this month, Carson said that the new administration is “very, very amenable to adjusting that policy.” The comments suggest a clear willingness to reverse the FHA policy—and beyond that, signal an existential threat to a well-intentioned program….

In this ValueWalk article, Joseph Cioffi offers insight into concerns surrounding the Property Assessed Clean Energy program (PACE), including the adequacy of disclosures made at the time a PACE-funded project is sold to a homeowner as a means of financing energy efficient home improvements through a tax assessment on the property. Click here to view the full article.