Property Assessed Clean Energy (PACE) Loss Reserve Program
Frequently Asked Questions
- What is the number and value of PACE financings currently enrolled in the Program?
- What are the estimated environmental savings resulting from the enrolled financings?
- What types of losses does the Loss Reserve cover?
- How many claims have been paid from the Loss Reserve?
- How much money is in the Loss Reserve?
- Does CAEATFA offer PACE financing?
- Is PACE financing available in my area?
- Why is the Program limited to residential properties of three units or fewer?
- What types of financed improvements are eligible for coverage under the Program?
- What is the maximum financing amount eligible for coverage under the Program?
- How is a financing enrolled and covered by the Loss Reserve?
- For how long is an enrolled financing covered by the Loss Reserve?
- When are the semi-annual reports due?
- Is there a fee for participating in the Program?
- What data does the Program currently collect from participating PACE administrators?
As of October 2016, 81,707 PACE financings with a total principal value of $1,863,289,177.28 are enrolled in the Program.
Information regarding the estimated environmental savings may be found on the California Alternative Energy and Advanced Transportation Financing Authority's (CAEATFA's) Program Activity webpage.
The Program covers two types of eligible losses: (1) PACE assessments paid while a first mortgage lender is in possession of the property during a foreclosure, and (2) losses incurred by a first mortgage lender resulting from PACE assessments being paid before the outstanding balance in a forced sale.
To date, CAEATFA has not received any claims against the Loss Reserve.
The Program’s Loss Reserve was funded with $10,000,000 in the Budget Act of 2013.
No, CAEATFA does not administer PACE financing.
Information regarding the jurisdictions served by each enrolled residential PACE program may be found on CAEATFA’s list of enrolled PACE programs, but CAEATFA recommends visiting each program’s website for the most up-to-date information.
The Center for Sustainable Energy also administers a PACE jurisdiction map with information on PACE programs throughout California.
Public Resources Code Section 26061(d) limits the Program to covering residential properties of three units or fewer.
The Program currently covers financings for energy or water efficiency improvements, electric vehicle charging infrastructure, or clean energy improvements.
To be eligible for enrollment in the Program, PACE programs must require that residential financings be for less than an amount equal to 15% of the underlying property value up to $700,000 plus 10% of the underlying property value above $700,000. For example, if the underlying property is valued at $300,000, the PACE financing amount must be less than $45,000, whereas if the underlying property is valued at $750,000, the PACE financing amount must be less than $110,000 (($700,000 x 15%)+($50,000 x 10%)).
Each eligible financing originated by an enrolled PACE administrator and included in its semi-annual reports may be covered by the Loss Reserve. Additionally, PACE administrators that applied to the Program on or before June 9, 2014, were allowed to have their entire existing portfolios included under the Loss Reserve to maximize the Program’s effectiveness. To allow new PACE programs (created on or after March 10, 2014) to enroll in the Program without delaying their operations, the Loss Reserve also covers financings originated up to 30 days before their Program enrollment date.
Financings enrolled in the Program may be covered by the Loss Reserve for the duration of their term, or until the Loss Reserve is exhausted.
Enrolled PACE programs must submit reports on October 1st detailing activity from January 1st through June 30th of the same year, and on March 1st detailing activity from July 1st through December 30th of the previous year.
Effective January 30, 2015, CAEATFA has suspended the Program’s administrative fee.
Through Program applications, CAEATFA collects the following information:
- Program policies;
- Eligible measures;
- Underwriting criteria;
- Transactional costs;
- Credit enhancements, if any;
- Quality assurance and consumer protection requirements; and
- The total number and value of the existing portfolio.
With each semi-annual report, PACE administrators provide the following information:
- The assessor’s parcel number, principal amount, annual assessment amount, and term of each new financing originated in the reporting period; and
- The total number and principal amount of new financings originated in the reporting period.
Semi-annual reports due October 1st of each year also include the following information:
- Projected annual energy and/or water savings resulting from enrolled financings, to the extent the information is available; and
- Total number and principal value of all outstanding financings.
Any claim against the Loss Reserve must include:
- Assessor’s Parcel Number;
- Financing origination date;
- Loss amount;
- Date(s) of loss(es); and
- Name of first mortgage lender.