Pros and Cons of PACE Loans

As green energy becomes more popular, people are turning to different ways of making the home more energy-efficient. Property Assessed Clean Energy (PACE) is a type of loan given to those who want to upgrade their homes with energy-efficient projects. The option allows you to install home features and systems that promote green energy use. It can also be used in commercial buildings.


Easy qualifications

Unlike other loans such as second mortgages or personal loans, PACE loans don’t look into credit history or credit score. This makes it easier for everyone who needs that loan to qualify. However, if you have had recent problems with your FICO credit score or if you haven’t been paying your property taxes, it may be harder for you to get the loan. Chances of being denied are, however, lower compared with other types of loans. You can click through this article for more challenges you may face.

Complete financing

This kind of loan makes it possible for you to finance any project without putting up down payment. This means that you can complete your project faster and easier, but you need to remember that the amount of money you’re given is proportional to the interest you’ll pay.


PACE loans are usually attached to the property and not the individual. As such, when you transfer the property to someone else, they become responsible for the loan. The loan also has a longer payment period, which can go up to 50 years.


Increased property taxes

This type of loan has to be paid back through property taxes. The monthly costs are added to your property tax bills which you pay monthly.

Higher interest rates

The simple qualification procedure means that you will have to pay more interest in these loans. The high-interest rates mean that you will have to pay back more than you would with other loan options like FHA.


It’s important to remember that failure to make payments can lead to you losing the property. You, therefore, need to weight al your options before taking a PACE loan.