Florida PACE programs

Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation for more information about PACE financing, and for a comprehensive list of all PACE programs across the country.

Property-Assessed Clean Energy (PACE) Overview

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. Eligible improvements include energy efficiency, water conservation, renewable energy generation, and resiliency upgrades. The amount borrowed is typically repaid via a special assessment on the property over a period of years. Florida statutes authorize municipalities and counties to establish dependent special districts with the authority to collect revenue via a special assessment. (Not all local governments in Florida offer PACE financing; contact your local government to find out if it has established a PACE financing program.)

In Florida, there are two types of PACE programs, “Residential PACE” which covers residential properties (1 to 4 family homes), and “Commercial PACE” which covers multifamily (5+ family homes), retail, hotels, industrial, and other types of commercial properties. Some states have enabled both types of PACE, while others have just enabled C-PACE.

PACE assessments can be prepaid at any time and Residential PACE  programs do not have any prepayment fees. Because the assessment is attached to the property, rather than the owner of the property, if the property owner sells the property before the assessment is paid off, the balance of the assessment remains with the property. The assessment can transfer to the new owner without any need to approve the purchaser of the property.

Florida PACE Programs

To be eligible for PACE financing, a local program at the city or county level must be available in your area. Jurisdictional eligibility rules vary by county and municipality; municipalities in an eligible county are not automatically eligible for PACE financing. Counties with PACE programs as of August 2014 included Flagler, Gadsden, Gulf, Indian River, Jefferson, Loen, Martin, Miami-Dade, Nassau, Palm Beach, Pinellas, and St. Lucie.

Examples of active local PACE programs in Florida include:

• Flager County and the City of Kissimmee chartered the Florida PACE Funding Agency offer PACE financing to residential and commercial entities
• Leon County created the  Leon Energy Assistance Program (LEAP)
• Miami-Dade County created the Voluntary Efficiency and Renewable Energy Program
• Town of Lantana and Town of Magnolia Park joined to incorporate the Florida Green Energy Works program, administered by the Florida Green Finance Authority. Since first formed by Lantana and Magnolia Park, the towns of West Palm Beach, Delray Beach, Boynton Beach, Tequesta and Lake Worth have also joined the Florida Green Finance Authority.
• The communities of Cutler Bay, Miami, South Miami, Pinecrest, Coral Gables, Palmetto Bay, and Miami Shores formed the Clean Energy Green Corridor District
• The Solar and Energy Loan Fund (SELF) Program based in St. Lucie offers a commercial PACE program.

Program Provisions

Specific qualifying improvements are locally determined. The loans made to property owners are secured with a lien that is equal to county taxes and assessments. To participate in this program, property owners must have paid property taxes and not been delinquent for the previous three years. Additionally, the total assessment cannot be for an amount greater than 20% of the assessed value of the property. Local governments may pool together with other local governments to finance and administer programs.

Program Creation

Local governments were granted clear authority to create PACE financing programs with the passage of HB 7179 in May 2010. This legislation authorizes local governments - including counties, municipalities and dependent special districts - to levy non-ad valorem assessments to fund energy efficiency and conservation improvements, renewable energy improvements, and wind resistance improvements. 

In addition to authority granted by HB 7179, existing Florida law authorizes municipalities and counties to create special districts for financing a variety of projects that serve the public purpose and benefit the municipality or county. Many special districts currently exist to finance public infrastructure and administer various programs that serve the public purpose and benefit property owners and the municipality or county. A municipality or county can create a dependent special district to administer a PACE program. The Special District Information Program of the Florida Department of Community Affairs has a handbook that summarizes how counties and municipalities may create a dependent special district.

In 2014 a suit was filed against the Leon County Energy Improvement District that was seeking to offer PACE financing. The Florida Supreme Court ruled in October 2015 that Leon County had the authority to issue a $200,000 bond in Case No. SC14-710.