DC PACE

PACE for Financial Partners 

Banks and other investors can originate private financing into clean energy projects secured by a DC PACE assessment and collection on real estate tax bills by the District Office of Tax and Revenue. PACE assessments offer a highly secure asset backed instrument for guaranteeing stable yields to investors in clean energy projects. PACE assessments are used to fund projects that produce annual energy and other savings for the building owner in excess of the annual cost of the special assessment; in most cases providing excess cash flow to the investor. 

Because PACE financing is attached to the building (not the building owner) and can be amortized for up to 20 years, PACE greatly improves project-level economics for the property owner, reduces risk for investors, and increases demand for financing of clean energy projects within regional markets. Primary mortgage lenders and other investors can also utilize PACE to leverage additional capital investment into properties that need energy upgrades, or to improve the yield from these assets.

Why PACE?

  • Repayment is fully secured by the PACE special tax
  • Fund larger/longer-payback projects
  • Wide variety of projects are financeable
  • Increased flexibility on rate and terms improves project economics
  • Potential for aggregation and eventual securitization
  • Possible liquidity guarantees and other credit enhancements to secure repayment

About Lender Consent

As a tax bill, PACE financing is senior to traditional mortgage debt. For this reason, the DC PACE program requires the express consent of any existing lien holders on a property as part of PACE underwriting. In practice, because PACE notes do not accelerate in the event of default, only unpaid PACE payments stand ahead of existing mortgages, substantially reducing risk exposure while remaining principal and interest payments transfer with the title to any new owners. There is a strong and growing track record of existing lenders voluntarily granting consent for PACE assessments in commercial PACE programs around the country.  DC PACE is committed to assisting all PACE applicants and their existing lenders in understanding project-level economics, aligning the interests of all parties, and ensuring that DC PACE projects add asset value and reduce risk for property owners, PACE investors, and for existing lenders. 

Resources for financial partners:

  1. DC PACE eligibility requirements and technical standards
  2. Lender Consent Background Memo
  3. Financial institutions providing Lender Consent
  4. Interested financial partners can contact us for more information
Other Projects
400 M Street SE Affordable Housing
Walter Reed Army Medical Center Microgrid
EW Stokes Public Charter School

400M Solar Array

WHO IS URBAN INGENUITY?

Urban Ingenuity provides innovative financing and project development solutions to advanced energy projects, building retrofits, and state of the art infrastructure. Whether you’re a building owner, property manager, investor or project developer, Urban Ingenuity can help you cut costs, enhance financial performance, and fund your capital improvement—all while promoting environmental stewardship and increasing the resilience, security, and comfort of your property.