Land records · Parcel maps · October 6, 2026
What Is a PACE Lien? Energy Loans Tied to Taxes
What is a PACE lien? Financing for energy upgrades repaid through property tax bills, secured by a lien that can affect a sale or refinance.
What is a PACE lien? PACE stands for Property Assessed Clean Energy. A PACE program finances improvements such as solar panels, efficient HVAC, insulation, windows, or storm hardening, and the owner repays through an extra assessment on the property tax bill over many years. The debt is secured by a lien on the property, often with the same priority as property taxes. That makes PACE different from a regular loan and can complicate selling or refinancing. This page is general land-records background, not legal advice.
How PACE works
- A local government authorizes a PACE program.
- A contractor or program administrator offers financing for eligible upgrades.
- The owner signs an assessment contract.
- The assessment appears on the property tax bill, typically for 5 to 30 years.
- A lien or notice of assessment is recorded against the property.
Residential vs commercial PACE
| Type | Notes |
|---|---|
| Residential PACE | Available in only some states; has faced consumer protection rules |
| Commercial PACE (C-PACE) | Widely used for commercial buildings, often with lender consent |
Priority and why it matters
Because PACE assessments are collected like property taxes, many programs give them priority over existing mortgages. Unpaid installments can lead to tax-sale-like enforcement. Some mortgage lenders and agencies have rules against financing homes with senior PACE liens, so buyers may need the PACE balance paid off at closing.
Where you will see it
- Property tax bill: a separate line item for the assessment. See how to read a property tax bill.
- Recorded documents: a notice of assessment or lien in the land records.
- Title commitment: listed as an item to address.
Selling a home with PACE
Options include paying it off from sale proceeds, or transferring it to the buyer if the buyer’s lender allows. Many buyers’ lenders will not, so plan for payoff. Ask the program administrator for a payoff statement early, since prepayment terms vary.
PACE vs a special assessment
PACE is a type of voluntary special assessment. Traditional special assessments pay for public improvements like sidewalks or sewers and are imposed on all properties in an area. See what is a special assessment.
Consumer cautions
Some homeowners have signed PACE contracts without fully understanding the cost or effects on refinancing. Many states now require ability-to-pay checks and disclosures. Read the assessment contract and total cost before signing.
Questions to ask before signing
If a contractor offers PACE financing, ask for the full assessment contract and read it before work starts. Useful questions include: What is the total amount you will repay, including interest and fees, over the full term? What is the interest rate, and is it fixed? Will the assessment have priority over your mortgage? Is there a prepayment penalty if you sell or refinance? Can you get the same upgrade financed through an unsecured loan, a home equity line, or a utility rebate program instead? Compare offers from more than one contractor. A short, plain answer to each question is a good sign; pressure to sign the same day is not.
How to check for an existing PACE assessment
Look for an unfamiliar line item on the property tax bill, often labeled with the program name or as a special assessment with a long term. The county recorder’s office may have a recorded notice of assessment or lien under the owner’s name. A title search before a purchase should reveal it. If you inherited or bought a home and are unsure, the county tax collector can tell you which assessments are attached to the parcel and who administers them.
Bottom line
A PACE lien secures financing for energy or resilience improvements repaid through property taxes. It often has tax-level priority, which can require payoff when selling or refinancing. Look for it on tax bills, recorded notices, and title commitments. Find county tax and recording offices via the Platbookmapper map.
What is a pace lien FAQ
What does PACE stand for?
Property Assessed Clean Energy.
Does a PACE lien have to be paid off when selling a home?
Often, because many buyers’ lenders will not accept a senior PACE lien. Check with the lender.
Where does a PACE payment show up?
As a line item on the property tax bill.
Is PACE available everywhere?
No. Residential PACE is available only in some states; commercial PACE is more widespread.
Can a PACE lien lead to foreclosure?
Unpaid assessments may be enforced like delinquent property taxes, depending on state law.