Set the PACE requires mortgage holders to consent to the assessment.

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Why do senior lenders consent to C-PACE financing?

1. C-PACE Assessments Do Not Accelerate – only current & past due C-PACE payments can be enforced through a tax lien and are senior to a mortgage lender’s claim; the full principal balance can never be called due, unlike a traditional mortgage.

1. C-PACE Does Not Restrict a Senior Lender’s Foreclosure Rights – the senior lender can foreclose on the property in the same manner as if it were the sole financing on the property; there is no “workout” with mezzanine debt or equity providers.

2. Escrow the C-PACE Assessments – senior lender may require borrower to escrow annual C-PACE payments on a monthly basis, similar to property tax and insurance escrows, to mitigate risk of non-payment.

3. C-PACE Capitalized Interest – interest can be capitalized for up to 24 months (longer for select projects) to push the first payment beyond project completion or stabilization.

4. Ample C-PACE Cure Period – mortgage lender receives notice & cure rights with ample time to bring the C-PACE current given that a tax lien foreclosure/sale typically takes 12-24+ months.

5. C-PACE OpEx Savings May Increase Property Value – many states require that a third-party engineer verify that the monetary savings from C-PACE funded improvements exceed the cost of the financing, supporting a higher property NOI and valuation.

6. C-PACE Wins Deals & Build Relationships – the combination of a traditional mortgage and C-PACE typically offers the lowest blended cost of capital to borrowers, allowing senior lenders to fund more projects and offer a differentiated product to the market without having to build out C-PACE expertise or compete on pricing alone.

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Access more at PACENation  

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 Click here to access the Lender Consent Form

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