The full explanation
Most lenders will not refinance your mortgage or lend to a buyer while the home has an unpaid PACE loan. Under Regulation Z, the lender must evaluate whether you can repay it, and a PACE loan cannot be a qualified mortgage.
An example
A salesperson offers Rubén solar panels with a PACE loan and says they “pay for themselves.” Rubén asks how much his property tax bill would go up each year and compares other ways to pay for the project.
You will see it in…
- Offers from contractors or door-to-door salespeople
- Your property tax bill, as an added assessment
- Your escrow statement, if your servicer adds the PACE payment
