C-PACE Financing Shorts | Insights for Property Owners & Operators

• C-PACE Financing Benefits: C-PACE provides long-term, fixed-rate financing, acting as a hedge against interest rate volatility, while replacing more expensive debt or reducing equity requirements for property owners.
• Flexible Financing: C-PACE offers flexibility, including prepayment options and no callability, which gives borrowers full control over their financial decisions.
• Capital Stack Integration: C-PACE can replace expensive subordinate debt, reducing the borrower’s equity requirements and allowing them to retain more ownership or lower upfront capital.
• Energy and Economic Efficiency: Although promoted as an energy-efficient product, C-PACE also offers long-term economic benefits by spreading payments over 25-30 years.
• Not Characterized as Debt: C-PACE is not technically classified as debt, which can help borrowers maintain a favorable loan-to-value ratio with lenders.
• Compatibility with Other Programs: C-PACE pairs well with other financing programs, such as USDA rural development programs and historic tax credits, making projects more financially feasible.
• Historic Property Rehabilitation: C-PACE is ideal for historic properties that need modernization and energy efficiency improvements, complementing historic tax credits.
• Opportunity Zones: C-PACE aligns well with opportunity zones, which require significant investment in property rehabilitation, offering a flexible and efficient capital structure.
• The Breakers Project Example: The Breakers project combined C-PACE financing, historic tax credits, and bridge loans to overcome delays and cost overruns, demonstrating the synergy between different financing options.
• Eligible Improvements: C-PACE can finance a variety of energy-saving and resiliency measures, including HVAC systems, water heaters, lighting, and building insulation, with specific eligibility depending on the state.

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