Lean and Green Michigan PACE

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) financing effectively allows property owners to finance energy improvements with no upfront costs. The cost of the project is repaid via a special assessment on the property over a period of years. Commercial, industrial, and multi-family property owners (five units and up) in a participating city or county can participate in Lean & Green Michigan. 

Interested property owners should start by performing an energy audit on their facilities to find the most cost effective energy improvements. Lean & Green Michigan can help customers find a contractor to perform the audit. Interested property owners should then apply on the Lean & Green Michigan website, and Lean & Green Michigan will help them find the best funding solution for their project. 

Counties and cities must opt into the program for property owners in their jurisdictions to participate. For the current list of participating local governments, which already represent over half of Michigan's ten million residents, visit www.leanandgreenmi.com. 

Program Details: 

• PACE financing allows a property owner to voluntarily enter into a special assessment agreement, which can be repaid over a period up to 25 years.
• Under Michigan's PACE law, this savings to investment ratio must be positive on day one as a condition of project approval.
• The PACE special assessment is non-recourse and "runs with the land." The owner can sell the property and the new owner simply picks up the payments (and energy savings).
• Up to 100% of the project's hard and soft cost can be covered under a PACE special assessment. No upfront costs are required.

• High utility costs: Properties with a utility spend higher than $2,000 per month.
• Project size: The cost of the energy project should be greater than $100,000.
• Property Value: The property should be worth at least $400,000.
• Current on Property Taxes: Properties must be current on their property taxes and any other property tax obligations to qualify for PACE financing.

Check eligibility here.