The following information is provided by Rick Bishop, executive director of the Western Riverside Council of Governments (WRCOG), which oversees the HERO PACE Program.
Canyon Lake homeowners are no strangers to HERO Property Assessed Clean Energy (PACE) financing, which enables people to install new water- and energy-efficiency products in their homes and yards, and to pay for the improvements over time through their property tax bill.
Almost 300 home renovation projects have been completed in Canyon Lake using HERO, including 30 projects in the last three months alone. Statewide, HERO has financed efficiency projects in over 40,000 homes.
PACE financing is proving to be an effective model for homeowners to save on utility bills, and for local governments to create jobs, and help residents save water and reduce emissions. And unlike any other kind of financing, a homeowner may be able to transfer any remaining balance to the buyer if the home is sold.
But since it is collected as a property tax, it takes the first lien position for repayment, which some lenders may object to.
Local real estate associations have raised this as an issue. A recent announcement from President Obama should help ease these concerns.
As part of the President’s plan to make clean energy more accessible nationwide, the Federal Housing Administration (FHA) will issue guidance to allow the purchasing and refinancing of homes with PACE liens as long the liens are “subordinated,” or put in second place, to an FHA-insured mortgage, in the event the property goes into default and there’s a concern about who gets paid first. And HERO has been offering these subordinations since April of this year.
The HERO Program has also established a team of real estate professionals to help homeowners, agents, and lenders understand these options. HERO Property Advisors are reaching out to listing agents when one of these homes goes on the market. They can help with refinancing too.
HERO Financing covers a wide array of water and energy efficiency projects. So for the homeowner interested in installing efficiency products such as solar panels, HVAC units or artificial turf, HERO may well be a good bet.
Those who already have a HERO project and want to sell or refinance should call 855-CAL-HERO to learn more about options they may have that no other financing offers. For more information about the HERO Program, please visit www.heroprogram.com, or call 1-855-437-6411.