News Article
February 5, 2013

Lender Consent: Overcoming a Key Barrier to PACE Financing

Property Assessed Clean Energy (PACE) programs use a senior lien property tax assessment process to finance renewable and energy efficiency upgrades for buildings. Most PACE programs require property owners to get consent from existing mortgage lender before starting PACE-funded improvements – and that has the potential to derail projects if lenders don’t consent.


The PACENow non-profit advocacy organization surveyed representatives from 25 mortgage lending institutions for clues on how to improve the consent process. While the lenders valued their right to consent to PACE projects, they generally did not oppose the PACE concept and were open to approving projects that benefit their customers and improve the value of their collateral. The survey found several measures that would improve the likelihood of lender consent:

  • Educate lenders in the PACE concept.

  • Provide a database with reliable information about expected savings, payback and useful lives of specific energy improvements.

  • Develop a standard, streamlined, low-cost approval process for PACE projects.

  • Make PACE programs more consistent across states and the nation with standard approval platforms that help lenders review projects with fewer resources.

  • Provide cost effective insurance for the performance of energy improvement projects.

  • Partner with organizations like the Urban Land Institute, the U.S Green Building Council, and the Building Owners and Managers Association to promote PACE.

February 2013

Read PACE Financing Issue Brief >>


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