What to Know Before Signing Up for PACE Loans to Finance Energy-Efficient Home Improvements

It’s a popular home improvement financing program, but some homeowners say the program comes with pitfalls. 

PACE Loans are advertised as requiring “no money down” and a way to finance energy-efficient home improvement projects like solar panels, new roofs, and impact windows. 

It’s a program Millie Edwards signed up for to make improvements to her Fort Lauderdale home. 

Edwards has lived in her home since 1979, but in 2019 she decided to make some needed repairs. 

“He said it would be three to four weeks. And I said to him, would you get the permit before three to four weeks, and he said he was sending in the permit today,” Edwards told us a contractor said. 

She says a door-to-door salesperson told her about the financing program to pay for a new roof. She says she was told the work would begin in weeks. 

When we interviewed Millie in August of this year her roof was still not complete, but what she did have was a new bill. 

“I just feel like giving up. But I can’t because I don’t know where I am going, and I don’t want to run out of money,” Edwards said. 

PACE Loans are a type of financing you pay back through an additional assessment collected with your property taxes. 

In Edward’s case, her tax bill went from $1658 in 2018 to more than $13,128 after the PACE Loan was added. 

PACE Loans show up as a lien against your property and critics say homeowners should consider the pros and cons before signing on. 

“In some instances, is the loss of the home. The person can no longer afford to keep their home,” Consumer Fraud Attorney Robert W. Murphy said.  

Murphy says some homeowners are left in the dark about the true cost of the program. 

“It’s an incredible amount of stress as they just realize when they get their first tax bill for the next year that their taxes have gone up considerably,” Murphy said. 

Murphy says some homeowners have a false sense of security because they are led to believe PACE Loan programs are administered by the County or local energy company. 

Miami-Dade and Broward Counties list the authorized PACE providers on their websites. PACE contracts are between the property owners and private companies, not with the county. 

According to the state’s agency that provides PACE funding, Florida PACE Funding Agency, some steps have been taken to protect consumers before and after the project is completed. 

These safeguards include a recorded call detailing the program’s financing and another one explaining the contractor will not get paid unless the property owner is satisfied with the work done. In addition, it is mandated that all PACE-affiliated contractors are licensed and insured. 

But Murphy says there are still cases where contractors have been paid before the work has been completed or approved by inspectors. 

Murphy says it is also important to read the fine print of the contract. Many contracts include arbitration clauses that don’t allow you to easily get out of the agreement or take legal action against the companies involved in the project.