Illinois PACE Financing Program

January 15, 2024

Summary

Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation for more information about PACE financing and a comprehensive list of all PACE programs across the country.

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. Illinois has authorized certain local governments to establish such programs, as described below. (Not all local governments in Illinois offer PACE financing; contact your local government to find out if it has established a PACE financing program.)

Illinois has authorized municipalities -- cities, villages and incorporated towns -- and counties to enter into voluntary agreements with property owners to provide for contractual assessments. These assessments will provide financing to the property owner to install renewable energy technologies or energy efficiency upgrades that are permanently fixed to the property. The property owner then repays the assessments via his/her property taxes.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Illinois
Incentive Type:	PACE Financing
Web Site:
Administrator:	Programs administered locally
Start Date:	08/14/2009
Eligible Renewable/Other Technologies:	Yes; specific technologies not identified
Terms:	Locally determined

Authorities

Name:	65 ILCS 5/1-1-11
Date Enacted:	08/14/2009
Effective Date:	08/14/2009

Name:	55 ILCS 5/5-1132
Date Enacted:	07/14/2010
Effective Date:	07/14/2010

Name:	Public Act 096-0481
Date Enacted:	8/14/2009
Effective Date:	1/1/2010

Name:	50 ILCS 50/1-99
Date Enacted:	08/11/2017

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.