Pace Residential Home Improvement loans in Florida or “assessments” on your state property tax bill are risky in our opinion and should not even be approved by City Councils or County Boards in Florida, in our opinion.
PACE loans are Federally and Florida State approved methods to finance sales of energy efficient home improvement projects like solar panels, roofs, double paned window upgrades, doors, plus wind strengthening work to reduce hurricane damage. They transfer your debt to your home’s property tax bill which you cannot escape or defer without losing your home to the County Tax Collector to pay the bill.
This is an interview of Lake County, Florida’s elected Tax Collector, David Jordan by Vance Jochim, editor of Lake County’s fiscal watchdog blog FiscalRangers.com.
Currently, as of early 2021, the Lake County, FL Board turned down use of PACE loans in the County several years ago (I was at that meeting), while Leesburg and Lady Lake have approved PACE Commercial loans. Mount Dora we believe has approved both types of PACE loans. To our knowledge, no other Lake County city has approved them, while nearby Orange County has approved them. In our opinion, the appeal for elected officials to approve these loans is because they provide lower interest financing of energy improvement projects, which liberals like while ignoring all the risks to homeowners mentioned in the video.
Video watchers should also initiate a Google search on “PACE lawsuits” to find numerous disputes in Florida, California, and other states, and many BBB complaints.
This video is aimed at City Council or County Board members in Florida who have been asked to approve PACE financing loans (called assessments) or for homeowners considering signing up for such PACE financing. Sales pitches for PACE-funded “energy improvement” projects highlight “no credit checks”, “low interest”, “no down” without disclosing all the restrictions and risks described in this video. PACE funding is not run through banks, but separate quasi-government “district” organizations since the debt is transferred not to standard lender providers but to a homeowner’s property tax bill. Thus payments are made once a year as part of the home owner’s property tax bill. Risks also exist where the construction or items installed are defective.
Normally, with conventional construction loans, the customer could just stop paying payments to get fixes implemented, or even declare bankruptcy to avoid paying. But in this case scam construction firms escape that practice because once the debt is on the home’s property tax bill, it is there for the life of the financing, which could be 10-30 years. You should consider it the same as a lien which you must payoff, or lose your home to a foreclosure and tax sale for non-payment. If a “30-year” solar roof system or full window replacement system fails after four years, you are stuck with repairs and still have to keep making the payments.
Read about the risk of Florida R-PACE loans in this 2019 Wall Street Journal article. https://www.wsj.com/articles/clean-energy-loans-boom-in-florida-but-so-do-complaints-11563528602
Residential PACE loans are different than Commercial PACE loans, which we consider useful because the developers using them are much more sophisticated in ensuring the quality of construction, ability to pay the loan, etc. See our separate video on C-PACE or Commercial PACE loans at: https://youtu.be/8juCzLbI8Gw. However, any government agency like Cities or Counties that approve them need to know if there are any complaints about construction defects or where buyers of the project find out they cannot defer payment, they will complain to the government agency officials that approved such loans. But such situations appear to be rare.
We are writing an overview of Florida’s Residential PACE programs and will add the link here when completed (2nd quarter, 2021).
Video by Lake County, FL Fiscal Watchdog blogger Vance Jochim of FiscalRangers.com at FiscalRangers@gmail.com.
Short link to this video is: https://youtu.be/e85tkux3NPE
Length of video is: 41 minutes
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