Local Option - Property Assessed Clean Energy (Maine)
Last modified on February 12, 2015.
Financial Incentive Program
Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENow for more information about PACE financing and a comprehensive list of all PACE programs across the country.
Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. Maine has authorized certain local governments to establish such programs, as described below. (Not all local governments in Maine will choose to offer PACE financing; review the DSIRE entry on PACE Loans in Maine for more information.)
Maine signed PACE legislation into law in April 2010 authorizing municipalities to establish a loan program to provide financing for clean energy improvements to property owners via local ordinance. The legislation authorizes municipalities to enter into PACE agreements with property owners, provide financing, and collect PACE assessments to repay the loans. Municipalities will be able to use federal grants or other "funds available for this purpose" to establish PACE programs. The law does not restrict municipalities from determining what type of property owners would be eligible, but in practice the program being supported at the state level is for residential property owners. The legislation stipulates that PACE assessments will be considered subordinate liens, secondary to mortgages. Only homes located within towns that have enacted a PACE ordinance are eligible for the PACE loans. Model ordinances, as well as other related documents, can be found on the Efficiency Maine website.
Efficiency Maine Trust* has developed rules for Maine's PACE programs, which are available on the Maine PACE website. AFC Financial will administer the financial aspects of the program. Municipalities will be required to comply with the law and rules accordingly if they choose to pass a PACE ordinance and develop a PACE program for property owners.
The following eligibility requirements apply:
- Homeowners must have a debt-to-income ratio of 45% or less
- Property taxes and sewer charges must be up to date
- The property is not subject to a reverse mortgage
- The property may not have any outstanding notice of default, foreclosure, or delinquency on the mortgage
- The homeowner must have at least as much equity in the home as the amount of PACE loan
See the Interim Report (April 2013) for an evaluation of Maine's PACE program. The final report is expected July 2013.
In April 2010, state of Maine was selected to receive $30 million through the U.S. Department of Energy Better Buildings Program** program to help support implementation of its PACE programs statewide. Around 60 municipalities have elected to participate in this program. As of April 4, 2011, the program is open and accepting applications. In participating municipalities, homeowners can get PACE financing with a fixed interest rate of 4.99% and a term of up to 15 years, with the financing amount ranging from $6,500 to $15,000.
*Note: Efficiency Maine Trust was established by legislation in 2009 (LD 1485). This entity is responsible for coordinating the state's energy efficiency and renewable energy programs. Programs run by Efficiency Maine of the Maine Public Utilities Commission and the Energy and Carbon Savings Trust were transferred to Efficiency Maine Trust on July 1, 2010.
**The Better Buildings Program (originally called the Retrofit Ramp-up program) provided $486 million through competitive grants of the Department of Energy's Energy Efficiency and Conservation Block Grant program. The money was allocated via the American Recovery and Reinvestment Act (ARRA) of 2009.
Authorities (Please contact the if there are any file problems.)
|Authority 1:||35-A MRSA §10151 et seq.|
|Authority 2:||SP 326|
- Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.