PACE is not a loan, but rather, a property assessment. PACE financing requires no up-front costs and payments are made as a line item on the homeowner’s property taxes.
This means that your payment will only reflect what will appear on your property taxes when you receive your bill. The capitalized interest accrues on your financing before the first payment is due. So, rather than bill you all at once with your very first payment, you only need to pay a little bit each time.
PACE funded home improvements may also lead to significant utility savings that can help offset the payments on your property tax bill.
PACE funding is made possible by local governments, however, it’s not a government incentive, nor is it a discount or subsidy program. Although PACE doesn’t provide any government funding, payment forgiveness, or specialized discounts, there are still plenty of financial benefits associated with choosing PACE to finance your home improvement projects.
For instance, if you choose to opt for PACE to finance your impact window and door installation, it can add significant value to your property. So, although you won’t be receiving any special discounts, you could possibly make a profit if you choose to sell your home after making these upgrades and when you’ve completed all of your assessment payments.
PACE financing eligibility is based primarily on the amount of equity that you have in your home. Your ability to repay your assessment, as well as your overall mortgage payment history also directly determines your eligibility for PACE financing. However, don’t get this confused with your credit.
Getting approval for PACE financing is not based on your credit score and you receive low fixed interest rates regardless of your credit score. Also, you have the option of spreading the cost of the life of your products for up to 30 years!
| PACE | Traditional Loan Mortgage |
Credit Card Unsecured Credit |
HELOC | |
|---|---|---|---|---|
| Approval not based on credit score: | ||||
| Low interest rates (regardless of credit score): | ||||
| Fixed rates: | ||||
| Spread cost over life of product (up to 30 years): |