California Alternative Energy and Advanced Transportation Financing Authority

Property Assessed Clean Energy (PACE) Loss Reserve Program

Frequently Asked Questions

  1. What is the number and value of PACE financings currently enrolled in the PACE Loss Reserve Program?
  2. What are the estimated environmental savings resulting from the enrolled financings?
  3. What types of losses does the PACE Loss Reserve cover?
  4. What was the approved funding amount for the Loss Reserve?
  5. Does CAEATFA offer PACE financing?
  6. Is PACE financing available in my area?
  7. Why is the PACE Loss Reserve Program limited to residential properties of three units or fewer?
  8. What types of financed improvements are eligible for coverage under the PACE Loss ReserveProgram?
  9. What is the maximum financing amount eligible for coverage under the PACE Loss Reserve Program?
  10. How is a financing enrolled and covered by the PACE Loss Reserve?
  11. For how long is an enrolled financing covered by the PACE Loss Reserve?
  12. When are the semi-annual reports due?
  13. Is there a fee for participating in the PACE Loss ReserveProgram?
  14. What data does the PACE Loss Reserve Program currently collect from participating PACE administrators?

1. What is the number and value of PACE financings currently enrolled in the PACE Loss Reserve Program?

As of March 2021, 136,208 financings with a total principal value of $3.17 billion are enrolled in the PACE Loss Reserve Program.

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2. What are the estimated environmental savings resulting from the enrolled financings?

Information regarding the estimated environmental savings may be found on the California Alternative Energy and Advanced Transportation Financing Authority's (CAEATFA's) PACE Loss Reserve Program Activity webpage.

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3. What types of losses does the PACE Loss Reserve cover?

The PACE Loss Reserve 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.

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4. What was the approved funding amount for the PACE Loss Reserve?

The PACE Loss Reserve Program’s Loss Reserve was funded with $10,000,000 in the Budget Act of 2013.

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5. Does CAEATFA offer PACE financing?

No, CAEATFA does not administer PACE financing.

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6. Is PACE financing available in my area?

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.

PACENation also administers a PACE jurisdiction map with information on PACE programs throughout the country.

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7. Why is the PACE Loss Reserve Program limited to residential properties of three units or fewer?

Section 26061(d) of the Public Resources Code limits the PACE Loss Reserve Program to residential properties of three units or fewer.

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8. What types of financed improvements are eligible for coverage under the PACE Loss Reserve Program?

The PACE Loss Reserve Program currently covers financings for energy or water efficiency improvements, electric vehicle charging infrastructure, or clean energy improvements.

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9. What is the maximum financing amount eligible for coverage under the PACE Loss Reserve Program?

To be eligible for enrollment in the PACE Loss ReserveProgram, 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%)).

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10. How is a financing enrolled and covered by the PACE Loss Reserve?

Each eligible financing originated by an enrolled PACE administrator and included in its semi-annual reports may be covered by the PACE Loss Reserve. Additionally, PACE administrators that applied to the PACE Loss Reserve Program on or before June 9, 2014, were allowed to have their entire existing portfolios included under the Loss Reserve to maximize the PACE Loss Reserve 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 PACE Loss Reserve also covers financings originated up to 30 days before their PACE Loss Reserve Program enrollment date.

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11. For how long is an enrolled financing covered by the PACE Loss Reserve?

Financings enrolled in the PACE Loss Reserve Program may be covered by the PACE Loss Reserve for the duration of their term, or until the PACE Loss Reserve is exhausted.

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12.When are the semi-annual reports due?

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.

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13.Is there a fee for participating in the PACE Loss Reserve Program?

Effective January 30, 2015, CAEATFA has suspended the PACE Loss Reserve Program’s administrative fee.

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14. What data does the PACE Loss Reserve Program currently collect from participating PACE administrators?

Through PACE Loss Reserve 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
  • 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.

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