Longboat Key, Florida | October 30th, 2018 – Before selling, most real estate experts would recommend improvements to make a house more energy efficient, as these are among the steps that would really add value to the property. Of course, such improvements would certainly entail high-dollar costs. But the good news now is that lesser cash out or none at all has become possible in energy-efficiency upgrades in a residence.
This has become possible under a state-wide government funding scheme for energy-related improvements on residential properties called the Property Assessed Clean Energy (PACE). Sarasota has already subscribed to the state’s PACE financing program which now covers properties in Longboat Key, as well as some other parts of the county. Longboat homeowners whose properties are in Manatee County, however, are not covered yet by PACE which is in operation only in unincorporated areas of the county.
What PACE Covers
The program’s coverage is broad, as its energy efficiency parameters include renewable energy installations as well as wind resistance improvements. The specific items that the PACE financing could cover include heating, ventilation, and air-conditioning (HVAC) systems, as well as roof replacement, insulation installation, new hurricane-resistant impact windows, solar energy systems, hot water heaters, and even an electric vehicle charging station.
Advantageous for households with tight budgets, the PACE financing could be availed of with no money down and relatively lax credit check. Homeowners availing of the program just have to establish that they have equity in their house, a good mortgage payment history, and enough income to cover the PACE funding.
Those availing of PACE’s credit facilities will choose from contractors accredited under the program, and the selected contractor will facilitate loan financing under the program. The loans would subsequently be paid back as an inclusion on the homeowner’s annual tax bill.
Payment thru Tax Bill
The PACE improvements’ funding would be paid back over time, along with any interest or fees the service provider would charge. The annual payment carries interest rates of between 6 percent and 9 percent would be included as a non-ad valorem assessment on annual property tax bills, according to the guidelines of Sarasota County.
In availing of PACE funding, be sure to ascertain all project costs, fees, interest rates, and annual and monthly payback terms. All PACE providers are required to disclose these items in a simplified document similar to “truth in lending” disclosures required from mortgage lenders in residential sales.
For homeowners availing of PACE funding and buyers purchasing residences upgraded under this program, it is also important to take note that the improvement’s value and the obligation to repay the PACE loam stays with the property. Hence, if the residence is sold, the debt stays with that property, not the former homeowner.
The commissioners of Longboat Key agree that it makes sense for the town to participate in PACE, as there are many older homes in the island that really need renovation and upgrades. Additionally, this scheme is one way to encourage the town’s homeowners to make their residences not only more energy-efficient but also more resistant against the effects of hurricanes and climate change.
Improvements on the energy efficiency of a residence is but one of the factors that could help facilitate a quick and fruitful sale. Check with our Judy Kepecz-Hays team on other approaches to draw buyers to the house you plan to sell.