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Commercial PACE Financing and Loan Requirements

PACE RequirementsAlthough the commercial PACE requirements are not difficult to meet, working with Stonehill PACE is an excellent way to ensure that you receive the right guidance and support during this process. PACE financing offers funding for commercial construction projects that meet relatively simple energy efficiency requirements. Our team will work with you to find ways in which your current project plan meets these minimal requirements and to provide you with an Energy Engineering Report that will meet the requirements of the PACE program administrator. We have the experience and knowledge you need to provide the right solutions for your commercial PACE financing needs.

Getting Approval from PACE Administrators

Underwriting criteria for PACE financing typically includes the following set of requirements:

  • The property must be held with a clear title. This means that there must be no liens and no unpaid property taxes.
  • The borrower must not have had any bankruptcies in the past five years.
  • The savings realized by the construction project should exceed the cost of PACE assessment over the life of the loan.
  • The value of the project should last for longer than the term of PACE financing.
  • A clean Phase I Environmental Report must be filed with the PACE program administrator.

PACE financing can provide support in making upgrades and renovations to your building including:

  • HVAC systems and controls
  • Lighting and electrical systems that meet minimum requirements for energy efficiency
  • Water efficiency systems
  • Insulation and building envelope systems
  • Renewable energy systems
  • Soft costs that are associated to the construction or installation of these systems

If these commercial PACE requirements are met, PACE funding may be issued for up to 25 percent of the value of the property at the time that the project is completed.

PACE Financing Parameters
Property Type Commercial only*; no Residential Properties
Geography All states with PACE-enabling legislation and active PACE Program Administrators
Min. PACE Deal Size $1,000,000
Max. PACE Deal Size $50,000,000
Min. Term (years) 10 years
Max. Term (years) Up to 30 years depending on state
Max. LTV (including PACE Lien) Up to 95%
Max. PACE Lien to Value Up to 25%
Min. SIR (Savings-to-Investment Ratio) 1.0x
Property Taxes Current, without delinquency over last 5 years
Years property free from a bankruptcy 5 years
Documentation Required for Underwriting
Appraised Value @ Completion Yes
Phase I Environmental Report Yes
Title Report Yes
Energy Engineering Report (quantifying savings) Yes; RAHILL Capital will assist
Entity Authorization Documents Yes
Years of Operating Financial Statements Historical 3 years, or Projected 3 years
Mortgage Loan Agreements or Term Sheets Yes (prefer both secured and unsecured)
Executed Mortgage Lender Consent Yes; mandatory
Evidence of Commercial Property Insurance Yes
Construction Contracts (GC and/or Subs) Yes
PACE Program Administrator Final Application Yes

The Stonehill PACE Process

In most cases, the first step in obtaining approval for PACE funding is to achieve the consent of the lender. Because Stonehill PACE is a direct lender, we can provide you with fast response times to allow you to make the most appropriate arrangements for your construction project. We will work with you throughout the PACE application process to make sure that you have the best chance of approval for these low-cost capital acquisition options.

To learn more about the services offered by Stonehill PACE or to request a consultation with us, call 713-666-2544 today. Our team is ready to help you navigate the PACE process in the most positive and practical way possible.