Solar loans and PACE financing: questions to ask
What the FTC says about home equity loans and PACE, and the questions it lists.
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Loans
The FTC says a system "can be financed through a traditional home equity loan or financing arrangements with a bank, credit union, or finance company."
PACE
The FTC says: "When you get PACE financing, your county or state doesn't lend you the money." It says "a property tax lien is placed on your home," and "You repay the lien by paying an extra amount every time you pay your property tax bill." The FTC also says you must pay that property tax bill, with the extra amount included, on time to avoid default and foreclosure, and that a lien for PACE financing takes priority over your home mortgage.
Questions the FTC lists
The FTC says to ask: "What will I pay up front?" "What annual percentage rate will I pay?" "How are the payments calculated?" "Will the payments change during the financing term?" "Is there a balloon payment?" "For how long will I pay?" "Will a lien be placed on my home or system?" "Do I have a right to cancel this financing? What's the deadline for cancelling?"
PACE questions
For PACE, the FTC lists: "Will my mortgage company let me add the kind of lien that PACE financing will place on my home?" "Can a PACE lien affect my ability to refinance or sell my home?" "Are there fees for early payoff of PACE financing?"
A note on credit ads
Federal rules (Regulation Z, 12 CFR 1026.24) require credit ads that state certain terms, such as a payment amount or number of payments, to also state other terms, including the annual percentage rate.
What we do not say
We do not offer, arrange, or compare financing, and we state no payments or down payments.
This is general information, not tax, financial, legal, or engineering advice.
Sources: FTC, Solar Power for Your Home; eCFR, 12 CFR 1026.24 (Regulation Z, advertising).
FAQ
General information only. We are not a contractor, installer, lender, or tax adviser. We do not refer, match, vet, rate, or check contractors, and we do not collect your information. Before you hire anyone, verify their license or registration with your state (in Washington, use the Department of Labor & Industries' Verify tool), get written bids, and read every contract and financing document. For tax questions, see IRS.gov or ask a tax professional.
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