Pace Loan Group

june 24, 2024

Keeping PACE with PLG: Why do senior lenders consent to C-PACE?

Ina Montejo, Originations

As C-PACE financing continues to evolve and gain traction, one topic remains at the forefront of every transaction: Lender Consent. Since the claim for delinquent C-PACE payments is generally on par with normal property taxes, the senior lender on every deal needs to consent to C-PACE.

According to PLG Originator Ina Montejo, here are some of the main reasons that lenders consent:

    1. C-PACE assessments cannot be accelerated
    2. C-PACE does not restrict a senior lenders foreclosure rights
    3. Senior lenders may escrow the payments
    4. C-PACE funds are fully available at date of closing
    5. C-PACE may increase the value of the senior lender’s collateral

To date, over 300 national, regional, and local lenders have consented to C-PACE financing. Historically, the most accepting senior lenders are regional and local banks, with consent given on a case-by-case basis.

From a banking perspective, consent is often given because of current restrictive check limits. C-PACE helps reduce the amount of dollar proceeds needed from the bank by filling out out their max LTV, filling gaps in the capital stack and making banks more competitive.


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