HomeMy WebLinkAboutPACE PresentationPROPERTY ASSESSED
CLEAN ENERGY (PACE)
IN THE CITY OF MIAMI
PAC E
IN THE CITY OF MIAMI
BACKGROUND
■ A mechanism for financing energy efficiency and other
qualifying improvements in certain jurisdictions on private
property.
■ PACE programs allow local governments, state governments,
or other inter -jurisdictional authorities, when authorized by
state law, to fund the up -front cost of energy improvements
on residential and commercial property, which are paid back
over time by the property owners.
PAC E
IN THE CITY OF MIAMI
BACKGROUND (cont.)
■ Green Corridor PACE District - special assessment district of
several municipalities that have authorized the implementation of
the Green Corridor Program
■ Voluntary special assessment program allowing local govts.,
including the City of Miami, authority to finance
purchase/installation of qualifying improvements permanently fixed
to real property, repayable over the long-term via property tax bills.
■ Ygrene Energy Fund Florida, LLC (Ygrene) is the third -party
administrator for the Green Corridor and is responsible for
managing and funding the program
PAC E
IN THE CITY OF MIAMI
PRO RAM SUMMARY
• 550 Applications since start of 2015
• most by any municipality
• 155 Projects Funded/Completed = $4.5 million
• 90 Projects in Progress = $1.9 million
Statistics as of February 23, 2016
PAC E
IN THE CITY OF MIAMI
PRO RAM SUMMARY(cont.)
Breakdown by Improvement Type
Roofs
30%
Statistics as of February 23, 2016
HVAC
13%
Impact/High
Efficiency
Windows &
Doors
50%
Solar
5%
Other
Insulation
1%
Lighting & Water
Heater Upgrades
1%
PAC E
IN THE CITY OF MIAMI
PARTICIPANT PROFILE
• Average residential property value:
$544,000
• Average LTV ratio: 51
Statistics as of February 23, 2016
PAC E
IN THE CITY OF MIAMI
REQUIRED PARTICIPATION CRITERIA
• 10% equity
• No delinquency on property tax payments for past 3 years
• No default notices for past 3 years or time lived in property
• No involuntary liens on property
• Not currently in bankruptcy
• Current on mortgage
• Total property debt (all liens + Ygrene assessment) cannot
exceed property value
PAC E
IN THE CITY OF MIAMI
FLORIDA SUPREME COURT CASES
INVOLVING PACE
2 cases
1 case
• were dismissed
• required amendments to the financial agreements to
remove all references to judicial foreclosure
• also required amendments to the bond documents to
F remove all references to the PACE program having, or
being delegated, authority to levy non -ad valorem
assessments
PAC E
IN THE CITY OF MIAMI
"FHA will allow homeowners to benefit from
energy efficiency improvements while
preserving the marketability of properties with
PACE loans. FHA will make financing
available for single family homes with
existing subordinated PACE loans as
long as they meet certain conditions."
-Julian Castro, Secretary of U.S. HUD
http://portal.hud.gov/hudportal/documents/huddoc?id=GovernorsLetter.pdf
PAC E
IN THE CITY OF MIAMI
"Since in the event of default, the PACE loan
as a tax assessment may have super lien
status and/or take precedence over the first
lien mortgage, some lenders have raised
concerns. FHA is developing Single
Family PACE guidance to overcome
impediments in the purchase and sale
of properties to which PACE loans are
attached due to these concerns."
-Ed Golding, FHA Head
http://portal.hud.gov/hudportal/documents/huddoc?id=FTDO.pdf
PAC E
IN THE CITY OF MIAMI
FHA PACE GUIDELINES WILL LIKELY
INCLUDE AT A MINIMUM
■ Lien Position: Only PACE liens that preserve payment priority for first lien
mortgages through subordination;
■ PACE payment, structure, and term: PACE financing must be a fixed-rate, fully
amortizing loan;
■ Eligible Properties: PACE assessments must be attached to single family
properties, as defined by FHA, which are 1- to 4-unit dwellings, including
detached, semi-detached and townhome properties;
■ Equity Requirement: PACE liens that preserve payment priority for first lien
mortgages will be eligible for financing that does not exceed FHA's maximum
combined loan -to -value (CLTV) ratio;
■ Record Keeping: PACE liens must be formally recorded and be identifiable to a
mortgage lender through a title search;
■ Additional Consumer Protections: PACE programs must comply with
applicable federal and state consumer laws and should include disclosures to and
training for homeowners participating in the program.
http://portal.hud.gov/hudportal/documents/huddoc?id=FTDO.pdf
PROPERTY ASSESSED CLEAN
ENERGY (PACE)
IN THE CITY OF MIAMI
TAXING AUTHORITY
■ Ygrene does not have taxing authority under Florida Law
■ Miami -Dade County entered into an agreement with Ygrene
to handle the required assessments of PACE properties
PAC E
IN THE CITY OF MIAMI
TRANSFER OF PACE PROPERTIES
■ Florida law requires the following notice:
At or before the time a purchaser executes a contract for the sale and
purchase of any property for which a non -ad valorem assessment has been
levied under this section and has an unpaid balance due, the seller shall give
the prospective purchaser a written disclosure statement in the following
form, which shall be set forth in the contract or in a separate writing:
QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY, RENEWABLE
ENERGY, OR WIND RESISTANCE. —The property being purchased is located within
the jurisdiction of a local government that has placed an assessment on the property
pursuant to s. 163.08, Florida Statutes. The assessment is for a qualifying
improvement to the property relating to energy efficiency, renewable energy, or wind
resistance, and is not based on the value of property. You are encouraged to contact
the county property appraiser's office to learn more about this and other assessments
that may be provided by law.
- Section 163.08, Florida Statutes