The PACE program is an optional financing tool – a mechanism to enable owners of commercial and industrial property to gain access to funds for projects that will reduce water and energy utility costs under the most flexible and favorable terms.
Commercial real property – including non-profit real property such as private schools, medical facilities, churches, etc.;
Industrial real property – including privately owned agricultural real property; or
Multi-Family Residential Property
Residential real property with five or more dwelling units.
What types of projects are eligible?
The PACE Act authorizes PACE funding for the installation of Qualified Improvements. Qualified improvements must:
- Be permanently fixed to the real property;
- Have a demonstrated capacity to decrease –
- Water consumption or demand; and/or
- Energy consumption or demand (includes distributed generation products or devices on the customer’s side of the meter that use energy technology to generate electricity, provide thermal energy, or regulate temperature); and
- Have a useful life that exceeds the term of the PACE financing agreement.
What properties are not eligible?
Properties that are statutorily ineligible for PACE assessments include:
- Undeveloped lots or lots undergoing development at the time of the assessment; and
- Government owned real property.
Eligible Property Owners
What types of property owners are eligible?
The PACE Act requires that PACE programs ensure that property owners demonstrate the financial ability to pay the annual PACE assessments. That demonstration must be based on particular statutory underwriting factors, including verification that any participating owner:
- Is the legal property owner;
- Is current on mortgage and tax payments;
- Is not insolvent or bankrupt;
- Holds a title to the property to be subject to a PACE assessment that is not in dispute; and
- Has consent of any preexisting mortgagee to the proposed PACE assessment through a written contract.
- Has not been delinquent in the payment of its ad valorem taxes in the previous three years;
- Is in good financial standing:
- Has not been the subject of bankruptcy proceedings in the previous five years;
- Is not subject to any outstanding, unsatisfied final judgment;
- Has not had any property sold at foreclosure in the previous five years;
- Has provided a Certificate of Status from the Secretary of State of Texas; and
- Has provided a Certificate of Account Status from the Texas Comptroller of Public Accounts;
- Has provided a current credit report or, if not available, a reasonable alternative;
- Has provided a current title report and verified that the property is not subject to any liens, including mechanics liens;
- Has provided notice to any preexisting mortgagee and has provided the written consent of the mortgagee; and
- Grants consent for the PACE program administrator to pull credit information.
What else do I need to know?
- The property should be located within the jurisdiction of the PACE program;
- Have a title that is not in dispute; and
- Where there is a preexisting mortgage lien on the property:
- The mortgagee must be given written notice of the owner’s intention to participate in the PACE program thirty days prior the owner entering into a contract with the PACE program; and
- The mortgagee must provide written consent to participation in the PACE program.