Marcus Benning is the author of an article in the International Law Office, “C-PACE Lending” – Real Estate


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Property-Assessed Clean Energy Commercial Loans (C-PACE) are available in at least 38 states and are becoming a popular financing option for borrowers who want to finance “green” energy projects designed to increase efficiency energy and renewable energy solutions.

C-PACE loans allow eligible homeowners to finance the upfront costs of eligible green energy projects at a fixed rate through a credit facility that is non-recourse to the borrower and generally cannot be accelerated. In states that allow C-PACE financing, this financing is generally available for a wide variety of real estate types, including:

  • hospitality;

  • detail;

  • industrial;

  • several families; and

  • mixed use.

Such financing can often be used to finance the purchase and construction of:

  • seismic and resilience systems;

  • heating, ventilation, cooling and air conditioning equipment;

  • solar photovoltaic;

  • roofing;

  • plumbing; and

  • other eligible projects.

The C-PACE lending environment is constantly evolving as states and local municipalities continue to pass enabling legislation and develop new C-PACE programs. As a result, open questions remain, particularly regarding the super-priority lien status of C-PACE loans to mortgage lenders and the nature of foreclosure protections for C-PACE borrowers. Homeowners are also advised to review all existing home financing documents before taking out a C-PACE loan, as many lenders do not allow such financing without the consent of the mortgage lender.

Originally posted by Lexology

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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