PACE

[Ben Travis]

New to bigger pockets, but have been pushed a few feeds lately, so trying it out.  I am in Oregon, but have some properties in California (norther) as well.  Is anyone familiar with Property Assessed Clean Energy.  I have some rentals and have been approached about making upgrades to the properties using PACE.

They say it's like a loan, but not like a loan.  I think I get it, but wondered if anyone has used it before. 

[Katrina Edwards]

I have not used it but did some serious research when I first started hearing about PACE and HERO loans.

Here are my takaways:

Both end up being special assessments on the property taxes.  This means that if you decide to pay off early, there are likely many hurdles if you can do it at all.

It increases the DTI for a buyer, so if you are planning to sell in the near future, it could hurt your sale, especially with lower end properties.

It increases the DTI for the owner of the property, so could impact borrowing ability.

The interest rates are NOT great. When I researched these programs, HELOC rates were around 3.5% and these loans were around 6-6.5%.

The commercials make them sound like a great deal, but I think there are better options to pay for solar and other resource saving improvements.

Remember, those folks who are approaching you are sales people looking to hit their numbers or make a commission.

I was originally excited about the prospect of using these programs myself and for my clients, but quickly shied away because of what I perceived as big potential future negatives.

I hope this helps.