Pace Loan Group

Frequently Asked Questions

How Does C-PACE financing work?

C-PACE (Commercial Property Assessed Clean Energy) financing is a highly adaptable form of low-cost, non-recourse capital for property upgrades that improve energy efficiency, utilize renewable energy, conserve water, and improve the resiliency of buildings.

This alternative financing is secured and repaid by a special assessment attached to the property and is generally up to 35% of a property’s appraised value. The payment obligation transfers along with ownership of the property, and the assessment can be prepaid at any time.

How does C-PACE fit with the existing financing currently on my project?

C-PACE can work within a variety of capital stacks and can be utilized in different ways depending on the needs of the developer/property owner.

C-PACE bridges gaps in the capital stack, ensuring projects get across the finish line.

C-PACE can also be used as a substitute for high-octane senior debt, blending down interest rates and reducing the cost of capital.

C-PACE also acts as an “Equity Reducer and IRR Juicer™”, substituting more expensive preferred equity and/or mezzanine debt for cheaper PACE financing.

What properties/projects are C-PACE eligible?

C-PACE financing is available for commercial properties, including but not limited to: i. Office, Multifamily, Industrial, Mixed-Use, Retail, Hospitality, Senior Living, and Self-Storage.

C-PACE does NOT finance single-family residential properties.

Types of work that C-PACE can finance include: New construction, renovation, gut rehab, adaptive reuse, solar, roof projects, and refinancing of any of these projects.

Fill out this form to see if your property is eligible for C-PACE.

What project sizes will PACE Loan Group fund?

PLG funds projects of $1M+.

Take a look at some projects that we have financed.

How can C-PACE be utilized retroactively?

In most states, C-PACE can retroactively cover eligible improvements completed in the past 1-3 years, freeing up rescue capital for stalled projects. By looking back to previous improvements, owners can reduce cost of capital, improve cash flow, and cover cost overages with retroactive C-PACE.

Click below to learn more about retroactive C-PACE

Is C-PACE available in my state?

C-PACE financing is currently available in a majority of states nationwide. Check out our map to see if C- PACE is active in your area.

What building upgrades does C-PACE finance?

C-PACE finances a variety of renewable, energy-efficient, and resiliency projects. These include:

HVAC upgrades, high-efficiency lighting, building envelope, roof replacement, boilers and chillers, renewable energy, water conservation, and seismic retrofits.

May not be necessary due to home page eligible measures

Why would senior lenders consent to C-PACE?

C-PACE assessments cannot be accelerated. Only the past due portion is senior to a mortgage lender’s claim, which is typically only 1-3% of property value. Some senior lenders also require property owners to escrow annual C-PACE payments monthly in a similar manner to property tax escrow requirements, helping mitigate risk associated with failure to pay the assessment when due. In case of a default on senior debt, C-PACE financing does not restrict a senior lender’s foreclosure rights.

Chat with one of our Originators to further see how C-PACE can benefit the senior lender

Does C-PACE work with agency financing?

If considering Fannie or Freddie as post-construction takeout financing, C-PACE serves as construction financing, but does not stay in the takeout as permanent debt. There is also a viable execution with USDA financing nationwide and HUD in certain states. C-PACE fits in with SBA 7(a) financing, but not SBA 504 financing.

Contact an originator to learn more.

What are the most important factors you and your credit committee look for when reviewing a new deal?

Every deal is different – but we are looking at the strength of the sponsor, the proforma financials, and the overall capital stack. We also look at the exit plan. Is there a viable take-out?

See if C-PACE works for your project. 

PLG News

Stay up-to-date on how C-PACE can help your commercial real estate project in any market.

Learn more about C-PACE

Articles by PLG experts to help you integrate C-PACE into your projects.