Control your own PACE
Improve Senior Lender Profit
Lenders can dictate higher interest rates on PACE than a mortgage because of duration and comparative market pricing from direct PACE lenders.
The risk on PACE is lower than a ground lease or the “A” portion of an A-B note. It is protected from bankruptcy since it survives any foreclosure.
Call protection is improved. PACE runs with the land, not the borrower, and is automatically transferred upon a sale. This allows for 30-year terms with prepayment penalties, so it will have a longer average duration than a mortgage.
Lender PACE combined with a conservative mortgage LTV results in a higher advance rate -- making your offer more attractive.
Lender PACE can be added to an existing mortgage without refinancing the first mortgage since it is repaid as a tax instead of as an increase in debt. Maintain account control while increasing profits.
Lender PACE allows a portion of your offer to be non-recourse and to be automagically transferred to a new owner upon a sale.
PACE can be specifically identified as a green bond
The entire mortgage may also qualify for ESG since it is now on a certified clean energy building.
Lender PACE has clear ESG value to demonstrate your commitments to your investors, employees, and customers.
Improved Collateral Value makes a safer mortgage
PACE allows property owners to improve positive cash flow and therefore increase their property value. This program is available for most long-term energy efficiency and renewable projects.
How Should the Senior Lenders use PACE?
Pace is utilized in three different situations:
Lenders who have approved PACE.
The alternative to your own PACE program is to simply consent to another direct PACE lender. C-Change can help here to help you size the PACE, influence the terms, evaluate the prepayment restrictions, and minimize the risk from PACE. Consenting to PACE is good for your Borrower. Call us if you want to consider an alternative. The following lenders have consented to PACE:
List of Consenting Financial Institutions