Review shows rate of property-tax payments on PACE homes compares favorably to rest of market; cites ‘very low’ PACE delinquency levels
SAN DIEGO, Feb. 22 – Renovate America, the nation’s largest provider of Property Assessed Clean Energy (PACE) financing, today welcomed a new analysis released by credit-rating agency DBRS that shows that homes with PACE assessments pay their property taxes at rates that compare favorably to those of property owners in general.
DBRS, which has been rating PACE asset-backed securitization transactions since 2015, reviewed property-tax delinquency trends for homes with PACE assessments in California – the largest marketplace for PACE – and compared them with the broader market. The agency found that in the 10 California counties with the most PACE assessments, delinquency rates on PACE homes at the end of the four most recent tax years were consistently below the aggregate delinquency rates of single-family residences over the same time period.
In addition to noting that available data on PACE homes show “strong” property-tax payment performance with “very low delinquency levels,” DBRS found that when owners of homes with PACE assessments do fall behind on their taxes, they catch up quickly.
“PACE delinquency metrics are lower than general aggregate property tax and single-family residential only property tax delinquency levels. PACE also shows consistent performance and very low volatility across tax years,” the agency said.
PACE is an innovative form of financing that empowers homeowners to make energy and efficiency improvements to their homes and pay for them over terms of up to 25 years, at a competitive, fixed interest rate, through an additional, voluntary line item on their property taxes.
Since its introduction in California over a decade ago, PACE financing has empowered more than 180,000 homeowners to make investments to their homes aimed at saving energy and water. And by spurring demand for contracting services, PACE creates good-paying jobs that can’t be offshored or automated. Importantly, because most PACE programs rely on private capital, these larger benefits can be achieved at no cost to local government budgets.
To obtain a copy of the DBRS commentary, please visit this page.
About Renovate America
Renovate America offers a tech-enabled financing platform for home improvement and commercial retrofits that empowers communities to modernize and make their housing stock more efficient, while giving small businesses the tools they need to grow. In addition to financing home improvements through an unsecured lending product, Benji, Renovate America offers communities HERO financing. HERO is the leading residential Property Assessed Clean Energy (PACE) program in the U.S. and has been used by the owners of over 114,000 homes to make energy and efficiency improvements. It is estimated that HERO is on track to save billions of dollars in energy and water bills, and has created over 23,000 local trade jobs that cannot be offshored or automated. Renovate America has built the world’s largest green bond platform, with a volume of originations that enables securitization of HERO PACE bonds multiple times a year, attracting international investment to meet U.S. clean-energy objectives.