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The State of Florida’s Property Assessed Clean Energy loan program — also known as PACE —allows property owners to make upgrades to their house with no down payment and full financing. The Pace Program is intended to allow homeowners with less than excellent credit to qualify for these upgrades. This is in part because, subject to conditions, the Pace Program provides for the annual loan payments to be collected as part of the homeowner’s annual property tax bill.
Sounds great, right? Well, not so fast. The old adage of “if something is too good to be true, it probably is” is a warning to heed. The City of Daytona Beach wants its citizens to know that PACE Program financing may come with high interest rates and predatory lending practices. Unlike traditional loans, PACE Program financing is exempt from the federal Truth in Lending Act, which requires lenders to fully disclose terms of loans.
If you are approached about financing upgrades to your home using PACE Program financing, please be advised that the City of Daytona Beach does not have an interlocal agreement with any of the PACE Program providers. A PACE Program provider, or a private vendor offering PACE Program financing, may tell you that an interlocal agreement is not needed. But an interlocal agreement with the local government agency is required by Florida Statutes. Because there is no interlocal agreement between the City of Daytona Beach and any PACE Program providers, Daytona Beach residents who enter into PACE Program financing agreements will not have their loan repayments collected and distributed as part of their ad valorem tax bill. Instead, depending upon the wording of their specific PACE Program financing agreement, these residents will have to arrange for repayment under different terms and conditions. It is recommended to hire an attorney to review a proposed PACE Program financing agreement before signing it.
Several Daytona Beach residents have already entered into financing agreements with a PACE provider. These residents will be receiving a letter from the county’s tax collector about this specific issue. The letter will include contact information for the PACE provider to get instructions on how to pay the PACE assessment this year.
Residents with questions can call the Volusia County Tax Collector’s office at (386)736-5938.