Congress Addresses PACE Loans

The United States Congress is currently addressing issues arising out of PACE loans. These loans, created by the Property Assessed Clean Energy (“PACE”) program, allow homeowners to obtain financing to make improvements to their home to increase their homes’ energy efficiency. PACE loans are often used to purchase solar panels for a home. However, such loans can be structured through a homeowner’s property tax assessment and some PACE loans take priority over other liens secured against a home. Many have considered these loans to be “predatory” and the terms unclear to the homeowners, who obtain the loans. Congress has proposed amending the Truth and Lending Act to require a full disclosure of the terms of PACE loans. This bill is supported by the California Association of Realtors.

-Shannon B. Jones, Partner, sbj@sbj-law.com

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