Recently, Collier County has been seriously considering pulling the plug on the PACE program for homeowners. Property Assessed Clean Energy financing is a statewide program in Florida that local governments can choose to opt in to for their citizens to use. The general gist of the program is that it makes it easier to obtain loans for specific energy-saving and weather-resistant home improvements like solar panels, new air conditioning systems, and storm windows, to name a few. No credit checks or money down are required, and it offers a fixed rate of interest. All that is required is proof that you’ve been making your mortgage payments on time and that you make enough money to make payments on the debt.
Unfortunately, many homeowners are duped into thinking the loan is actually a free handout; or at the very least, interest-free. Then they’re hit with the true cost of the improvements made to their homes—which generally needs to be paid back monthly over a 20-30 year period—and they simply can’t keep up with the payments. If this happens, a lien is recorded against the house, and an unpaid lien makes the house extremely difficult to refinance or sell since the lien would show up in any title search conducted, and it has to be paid off before anything else, even the mortgage. Failure to make payments can ultimately cause the homeowner to lose their home, along with all of its nifty new improvements.
Because of these unfortunate incidents, Collier County is looking to eliminate individual homeowner access to the PACE program altogether and follow Lee County’s example of only making PACE financing available to business owners. This is likely due to the fact that businesses are more thorough with checking all aspects of a program before signing up, since they see it as a business transaction from start to finish.
To be clear on one thing; there’s nothing wrong with the PACE program itself. In fact, it’s a great program since it makes loans for home improvements accessible to people who might not qualify otherwise. The problem is that the terms of the loan are misconstrued to individual homeowners, usually by a few bad-seed contractors who are hired to make the improvements to the home.
In the end, the problem with the PACE program lies in a lack of education. Homeowners who want to sign up for PACE financing should be given all of the facts in an easy-to-understand format, not bombarded with pages of legal jargon that practically requires an attorney to interpret.
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