Is PACE Available in Florida? A Comprehensive Guide to Funding Your Upgrades

Effective July 1, 2024, Florida law requires counties to approve PACE financing via a local ordinance for it to be offered to residents. The good news for homeowners across the state is that PACE is available in Florida, but its reach is determined by specific county and municipal participation, not by a statewide blanket rule. This program provides a mechanism for property owners to finance energy efficiency, renewable energy, and wind mitigation projects through a special assessment on their annual property tax bill.

Quick Summary

PACE funding is available for home and commercial property upgrades in numerous Florida counties and municipalities, but eligibility is location-dependent. Property Assessed Clean Energy financing allows owners to fund qualifying improvements, such as hurricane-resistant windows, solar panels, and new roofs, with no upfront costs and repayments made through property taxes. Qualification is based on factors like property equity and tax payment history, rather than credit score.

Key Points

• Availability Depends on Local Ordinances: PACE financing is not available statewide; its availability depends on whether your specific Florida county or municipality has passed an enabling ordinance.

• Check Your Location: To find out if PACE is an option for you, verify if your property is in a participating district by checking with a PACE provider like Florida PACE Funding Agency or Renew Financial.

• Qualification Is Equity-Based: Eligibility for PACE is primarily based on property equity and tax payment history, not your credit score, making it accessible to a wider range of property owners.

• No Upfront Costs for Upgrades: PACE allows homeowners to finance up to 100% of the cost for eligible projects, such as hurricane-resistant windows, energy-efficient HVAC systems, and solar panels.

• Repayment via Property Taxes: Payments for the financed amount are made annually through a special assessment added to your property tax bill over a fixed term.

• Potential for Foreclosure if Unpaid: Since the assessment is tied to your property taxes, failure to pay can trigger foreclosure, similar to unpaid property taxes.

• May Impact Refinancing or Sale: Some mortgage lenders may require the PACE assessment to be paid in full when refinancing or selling the property, which is an important consideration for homeowners.

• Covers Resiliency and Efficiency: Eligible improvements include critical hurricane-hardening upgrades, energy-saving enhancements, and water conservation measures.

What is PACE and how does it work in Florida?

Property Assessed Clean Energy (PACE) financing allows Florida property owners to fund eligible energy efficiency, renewable energy, and hurricane mitigation projects. Repayment is made through a voluntary non-ad valorem assessment added to the property's annual tax bill, making it different from traditional loans.

Florida Statute §163.08, passed in 2010, enabled local governments to create PACE programs, which are often administered by third-party providers. A recent legislative change (SB770) mandates that counties must pass a local ordinance to offer PACE, effective July 1, 2024.

Where is PACE available in Florida?

PACE availability in Florida is determined by individual county and municipal participation, not being a statewide program. Over 180 cities and towns across 22 counties currently offer PACE, but potential applicants should confirm availability in their specific area with a provider or local government.

Some participating counties and areas include:

• Miami-Dade County: Including Miami, Miami Beach, and Coral Gables.
• Broward County: Including Fort Lauderdale, Miramar, and Pembroke Pines.
• Palm Beach County: Including West Palm Beach, Boca Raton, and Delray Beach.
• Hillsborough County: Available in unincorporated areas like Brandon and Carrollwood.
• Lee County: Including Cape Coral and Bonita Springs.
• Sarasota County: Available in Sarasota and North Port.
• Monroe County: Available throughout unincorporated areas and municipalities like Key West and Marathon.

How to apply for PACE financing in Florida

Applying for Florida PACE financing typically involves several steps through a participating provider:

1. Check eligibility: Use a provider's online tool to confirm your property's location is in an eligible area.
2. Verify qualifications: Ensure your property meets requirements like being current on taxes and mortgages.
3. Choose a contractor: Select a licensed and PACE-approved contractor for the project.
4. Complete the application: Pre-approval is based on property equity, not credit score.
5. Project completion and payment: The provider pays the contractor after you confirm satisfaction.
6. Repayment through taxes: The repayment is added to your property tax bill over a fixed term.

PACE vs. Traditional Financing: A comparison

Here is a comparison between PACE financing and traditional home equity loans for home improvements in Florida.

Feature	PACE Financing	Traditional Home Equity Loan
Qualification	Primarily based on home equity and property tax payment history.	Based on credit score, income, and debt-to-income ratio.
Upfront Cost	None; covers up to 100% of project costs.	May require closing costs and other fees.
Repayment Method	Through a property tax assessment.	Monthly payments directly to the lender.
Repayment Term	Typically ranges from 5 to 30 years.	Varies based on the loan type and terms.
Impact on Sale	The assessment can transfer with the property, though lenders may require full payoff at closing.	Must be paid in full at the time of sale.
Risk of Foreclosure	Failure to pay is treated like delinquent taxes and can lead to foreclosure.	Failure to pay can lead to foreclosure.
Approval Speed	Often quick, with pre-approval in minutes.	Can be a lengthy process involving extensive financial review.

Conclusion

PACE offers Florida homeowners a financing option for energy efficiency and hurricane resilience projects. Its availability is determined by local county and municipal participation, not being a statewide program. Key aspects to consider include confirming local availability, understanding repayment via property taxes, and the potential impact on future sale or refinancing. Property owners can make informed decisions about using PACE.

PACE Eligibility Requirements

To qualify for a PACE program in Florida, property owners and their property must meet specific criteria. Requirements include: current property taxes and mortgage payments, sufficient property equity, no involuntary liens, and the property being located in a participating area. For residential properties, the assessment generally cannot exceed 20% of the property's value.

Which improvements qualify for PACE financing?

Florida PACE financing can be used for various projects that enhance energy efficiency, promote renewable energy, or provide wind and flood mitigation. Eligible projects include energy efficiency (HVAC, insulation, windows), renewable energy (solar), hurricane protection (impact windows/doors, shutters), water conservation, and flood resilience.

How does PACE affect my mortgage?

While Florida law allows PACE assessments to transfer with a property, federal guidelines, particularly with Fannie Mae and Freddie Mac-backed mortgages, can lead to lenders requiring the full PACE assessment to be paid off during a sale or refinance. Homeowners planning to sell or refinance should consult their mortgage lender and a PACE provider for potential implications.

Frequently Asked Questions

Which Florida counties offer PACE financing?

While not all counties participate, numerous Florida counties offer PACE financing through specific programs or districts. Prominent examples include Broward, Miami-Dade, Palm Beach, Orange, and Hillsborough counties. Always check with a PACE provider to confirm availability in your exact location, as it can be limited to certain cities or unincorporated areas.

Do I need good credit to qualify for PACE in Florida?

No, qualification for Florida PACE financing is not based on your credit score. Instead, it is primarily based on the equity in your property and your history of timely property tax and mortgage payments.

What happens if I sell my property with an outstanding PACE assessment?

When you sell a property with an outstanding PACE assessment, state law allows the obligation to transfer to the new owner. However, many lenders, including those with Freddie Mac or Fannie Mae-backed mortgages, will require the assessment to be paid in full at closing. It is essential to discuss this with your mortgage lender before listing your property.

What types of home improvements can I fund with PACE in Florida?

Eligible improvements include a wide range of projects that improve energy efficiency, promote renewable energy, or provide hurricane mitigation. Common examples include impact windows and doors, new roofing, high-efficiency HVAC systems, insulation, and solar panel installation.

What are the risks of PACE financing?

A primary risk is that failure to pay the PACE assessment, which is added to your property tax bill, is treated like delinquent taxes and can lead to foreclosure. Additionally, the PACE assessment has a higher priority lien than most mortgages, which can affect your ability to sell or refinance if your mortgage lender requires a full payoff.

Is PACE financing the same as a loan?

No, PACE financing is not a loan in the traditional sense; it is a special assessment tied to your property and paid through your property taxes. This is different from a personal loan, where payments are made directly to a lender and are based on your creditworthiness.

Where can I find more information about PACE in Florida?

You can find more information by visiting the websites of PACE administrators like the Florida PACE Funding Agency, Renew Financial, or Home Run Financing. You can also contact your local county or city government for details on their specific participation.