NY Open C-PACE

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 for a comprehensive list of all PACE programs across the country.

Open C-PACE is a program offered by the Energy Improvement Corporation* (EIC) that provides financing to commercial properties for energy efficiency upgrades and renewable energy projects. The program is not a bank loan and differs from traditional financing options. The program allows the property owners to borrow money from approved capital providers, which is repaid via a benefit assessment lien that is subordinate to municipal taxes. Loan terms are customizable up to the expected life of the improvement. If the property is sold, then the repayment option is legally transferred with the property.

Eligibility

Financing is available for a wide variety of property owners, including corporations (both for-profit and not-for-profit), LLC, partnerships, real estate investment trusts, or any property owner other than a natural person that owns commercial real property. Ineligible properties include individually owned properties and government owned properties (including public universities and school districts). Financing is available for new constructions and existing buildings. Information on eligible projects is available in the C-PACE Guidance Document.

To participate in the program, the projects should be located within a municipality that is a member of the Energy Improvement Corporation (EIC). List of all the participating municipalities in the program can be accessed here. The property that is being financed should be current on property tax payments, and must not have any involuntary liens or defaults.

Financing

Financing amounts vary by project type and approved capital provider, but can be up to 100% of the project cost, or can be combined with other financing. A list of providers can be found here.

*EIC is a local development non-profit corporation that operates EIC OPEN C-PACE for the benefit of its member municipalities. Eligible New York municipalities can join EIC by passing a local law that enables the municipality to offer EIC OPEN C-PACE and signing a municipal agreement with EIC.