What You Need to Know About PACE & Hero Loans

Have you ever considered seeking PACE or Hero Program financing for your home? It's a great government incentive, but it's important to know the finer details before taking on this loan.
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Today I wanted to take a moment to talk about PACE loans—also known as Hero loans.
PACE financing stands for 'property assessed clean energy' and provides local governments the opportunity to provide financing for homeowners that want to do projects that are either energy efficient, water efficient, or integrate renewable energy products into their home.
In California, the Hero Program is the most well-known opportunity for homeowners to receive this type of financing. It's considered a tax lien in first position on the property, meaning upon the sale of the home, it will be paid prior to any other creditors involved in the property being paid. This even includes the lender on the home mortgage.
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PACE financing lets local government loan money for energy-efficient home projects and features.
” This first position is important because the Federal Housing Financing Agency won't allow Freddie Mac and Fannie Mae to lend on houses that have Hero liens in the first position on the mortgage. This is very important because it can make it difficult for homeowners to refinance on the property or new owners to get financing when the home is sold.
Additionally, it's important for people who get Hero financing to contact their mortgage lender right away so they can start taking money to pay that lien into an impound account. If not, you could get behind in your payment and end up having to pay double each month in order to catch up.
I hope this helped you understand PACE financing better. If you have any other questions about this financing or you're thinking about buying or selling a home, don't hesitate to give me a call or send me an email today. I look forward to helping you!