|
What Realtors need to know about PACE loans
by Steven Yoder
As PACE takes off, realtors warn that unwary homeowners are complicating their finances
Call it the tale of two turfs. In summer 2014, 27-year-old Benjamin Triffo wanted to do something about his dry, unattractive yard. He owns a four-bedroom, four-bath duplex in Elk Grove that he'd bought in 2011, and his sprinkler lines were broken. But with the state passing rules last July that would allow fines for overwatering, Triffo quickly figured out that replacing his system and re-sodding would be like attaching a drain line to his checkbook.
So, he hired a contractor to rip up the front yard and install artificial turf. He also took out his backyard and replaced it with a concrete patio and more sidewalks. Now, instead of a lawn with huge bare patches, he's got a luscious green carpet and a great barbecue area - and he'll never have to choose between a brown lawn and a fine.
The project cost $23,000. But he paid nothing up front, instead taking out a loan through a Property-Assessed Clean Energy program with a 20-year repayment plan. "It turned out great - I get compliments on it left and right," he says of his new landscape.
Triffo went into the deal knowing the implications if he wants to resell: His PACE loan attaches to the property as a lien. If a new buyer doesn't want to assume the payments, he plans to either lower his selling price or take out equity he's accrued in the house to pay it off.
But not everyone with a PACE loan knows how it works. Last September, Erin Stumpf of Dunnigan Realtors met with a homeowner in Sacramento's Tallac Village neighborhood. The owner wanted to sell, and she'd replaced her yard with artificial turf, taking out a $7,000 PACE loan to do it. "Oh, but don't worry," the homeowner told Stumpf. "The PACE loan will be transferred to the new owner."
|
