PACE lenders can help multi-family property owners in many ways. PACE loans provide funding for qualified construction efforts and improvements such as building envelope, HVAC systems, and even elevators. Therefore, talk to your PACE lenders about your options and whether your project qualifies for PACE funding.
PACE Lenders Focus on Low-Cost Loans
PACE funding offers a financing option based on the amount of equity a property owner has, rather than the future profitability of the project. Therefore, these loans are often low-cost. Additionally, PACE lenders often require a savings to investment ratio of 1.0 or more to loan. Therefore, your savings overtime must equal or exceed the loan payments you will make on your property tax bill.
For example, PACE loans are often used for hot water heating systems and plumbing fixtures that save water. This results in savings in utility costs, which increases your bottom line. The PACE program often requires these savings to basically pay for the cost of the loan over time. So, multi-family property owners can benefit from low-cost loans that provide immediate positive cash flow for improvements to their construction plans or current buildings.
PACE Funding Benefits Property Owners and Residents
In addition, PACE funding helps both property owners and residents in numerous ways. First, it reduces utility costs for tenants and operating costs for property owners. Therefore, these savings from improved systems often results in an increased net operating income for property owners.
Also, in many cases PACE lenders provide loans for projects that increase health and comfort for tenants and building staff. For example, better HVAC systems and insulation have a positive effect on indoor comfort. They can also help improve indoor air quality, which benefits all those who are inside the multi-family building.
PACE Loans are Available for Many Types of Projects
Finally, PACE loans are often readily available, and the application process tends to be less competitive than other loans. PACE lenders focus on improvements that will add to the property’s later value. For example, you can use PACE funding for soft costs, such as engineering, permitting, and other associated fees. Additionally, many PACE programs allow financing for resiliency projects, lighting and electrical improvements, roofing costs, and many other efforts that will help you and your tenants save money over time. Additionally, your PACE lenders can help find areas where you qualify for funding without changing the cost or scope of your project. Therefore, work with a team that is highly knowledgeable and experienced with PACE requirements for the best results.
At Stonehill PACE, we are a direct lender for CPACE financing. Our team is well-versed in sourcing, underwriting, and closing real estate transactions in the PACE industry. We specialize in providing funding for new construction and major redevelopments for all types of commercial properties. With our strong relationships with PACE program administrators, handle all the aspects of the qualification process for you. Contact us today to learn more or to begin the approval process. We look forward to working with you.