Blitz of callers seek green energy loans
Days after the Miami City Commission expanded eligibility for the Green Corridor Property Accessed Clean Energy (PACE) program to include single-family and duplex homes in city commission Districts 2 and 4, Ygrene Energy Fund of Florida got a blitz of calls, emails and applications from residents whose homes need energy improvements and hurricane protection.
Without Miami, the program was quite small, so the recent addition of two city districts will now allow the program to help more people access much-needed capital, said Joe Spector, vice president of operations for Ygrene Energy Fund of Florida. Based on US Census numbers, he estimates 30,000 to 40,000 households in the two districts can now apply for the voluntary financing program.
“We were getting lots of calls from people in the City of Miami [who were interested in making energy improvements to their homes] but had to turn them away,” he told Miami Today in early July. “While he was waiting for the commission’s vote, a resident of District 4 told me he would have had to pay over $12,000 to replace his roof in three weeks or his insurance company would cancel his policy. Now, this man can use the program. He came in this week to fill out an application and has been approved.”
Brought forth by Commissioner Marc Sarnoff of District 2 and seconded by Francis Suarez of District 4, the 4-1 vote at the June 26 city meeting included a stipulation that the pilot program be evaluated in a year to determine if it should get an expiration date or be terminated.
Until last month’s decision to allow a residential pilot program, the City of Miami allowed only commercial PACE projects.
Commissioners Frank Carollo and Keon Hardemon said they don’t want a residential PACE program in their districts (3 and 5, respectively).
Commission Chairman Wilfredo Gort, who cast the lone vote opposing eligibility in Districts 2 and 4, said he’s “not impressed with it at all” and believes people in business are more sophisticated insofar as understanding lending sources and have lawyers to advise them, but many individuals might find the program more difficult to navigate.
But there is absolutely no need to fear that residents will be faced with predatory lending practices, Mr. Spector told Miami Today. He said terms of the voluntary PACE program allow homeowners to make energy improvements and add hurricane protection immediately and repay the cost over up to 20 years through yearly assessments on their property tax bills.
Since its launch in September 2013, Ygrene has approved about 200 such loans with an estimated total value of $4 million to $5 million.
Legislators approved the PACE program for Florida in 2010. State law stipulates that the assessment to be levied on the property constitutes a lien of equal weight to county taxes, which means it takes first position on the property.
That might have been the reason behind national mortgage secondary market agencies Fannie Mae and Freddie Mac announcing soon after Florida adopted PACE programs that they would not purchase mortgage loans for homes that carried a PACE assessment, Mr. Spector said.
“This business decision by the [Federal Housing Finance Agency] created the misconception about the program that it might put too much restriction on the property owner, which might be the reason some cities have been slow to adopt PACE,” he said. “There’s no difference, however, between paying off the PACE assessment and a home equity line or other loan at the time of sale.”
At the June 26 city meeting, Mr. Sarnoff said the average Miami citizen who gets a loan is paying at least 17% interest.
“We are making available money that’s 6% or 7%, with the advantage to citizens not having to pay an additional 10%,” he said.
Mr. Sarnoff told Miami Today that this is the most environmentally friendly program one can create and makes money available to people who either don’t have access to it can get it only at high rates.
Mr. Suarez said if there are complaints about the pilot residential PACE program, which he does not anticipate, he will return to the city commission with a report.
Mr. Suarez said he paid on his own for energy improvements to his house.
“People in my generation are green conscious, but there’s an issue of flow of capital,” Mr. Suarez said. “I would have loved to have been able to take advantage of a program like this.”