Finance

For projects exceeding $500,000, NYC Accelerator Property Assessed Clean Energy (PACE) Financing is an excellent fit for Affordable Housing, provided the mortgage lender has granted permission. It offers long-term, fixed-rate financing, covering up to 100% of project costs with no cash up-front from the owner. PACE Financing is unique in that it is repaid on the tax bill, making it easily transferable upon sale of the building. Plus, projects can be retroactively financed for up to three years after improvements are completed.

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Mortgage loans (or lines of credit) offer attractive, low rates and long-term options and can include funds to cover energy efficiency improvements. Mortgage loans are most beneficial for building owners who are already planning to refinance.

Green Mortgage Loans are designed to target and incentivize financing for energy efficiency upgrades. Green mortgages provide increased loan amounts that incorporate a portion of energy savings that result from upgrades while offering competitive rates and allowing building owners to work with existing mortgage lenders. This option is best for building owners that are ready to refinance their mortgages, as timing can pose issues.

Equipment loans are offered by manufacturers, vendors, and contractors, as well as third-party lenders to purchase equipment. For emergency repairs or when mortgage refinancing is not an option, equipment loans offer a simple and quick process. Equipment loans do not require upfront fees or expenses but may include higher rates, depending on the borrower’s credit history or outstanding debt.

Equipment Leases are available from equipment manufacturers, vendors, and third-party lenders, allowing building owners to use energy-related equipment without purchasing it. Upfront expenses or maintenance fees are not required, and an option to purchase the equipment at the end of the lease term is offered.

Predevelopment Loans provide short-term financing for energy studies, architectural and engineering services, and other soft costs incurred while planning and developing a green project. These loans enable projects to start and reduce out-of-pocket expenses prior to long-term financing approval but pose a potential risk to borrowers if a project doesn’t proceed.

Energy Service Agreements (ESA) are a “non-debt” solution where providers install, construct, and manage retrofits while providing ongoing maintenance. ESAs offer a consolidated and simplified option for building owners with multiple projects or buildings and work for many building types, allowing for deeper retrofits while providing a guarantee on project performance. This is best suited for owners with projects larger than $500,000 or multiple buildings.

Power Purchase Agreements are a “non-debt” solution where project developers install and manage an on-site power generation project (often solar) from construction to completion and operations. This option is useful for building owners who can’t take advantage of tax benefits. Upfront expenses or maintenance fees are not required, however, building owners must purchase energy produced, but at an attractive rate.

Green Housing Preservation Program provides no- and low-cost financing for energy efficiency and water conservation improvements, along with moderate rehabilitation work. The program is eligible for buildings with at least three units and less than 50,000 square feet (approximately 50 units) that require energy efficiency and water conservation improvements. Project scopes of work must reduce a building's energy usage by at least 20%.