PACE Financing in Florida: How It Works and What Buyers Should Know

What Is PACE Financing?

PACE stands for Property Assessed Clean Energy. It is a public financing program that allows Florida homeowners to fund energy-efficient and hurricane-resistant home improvements through long-term, fixed-rate assessments added to their property tax bills. Rather than taking out a traditional loan, homeowners repay the cost through their property taxes over a period of ten to twenty-five years.

The Florida PACE Funding Agency is a public entity created to administer these programs statewide. As of 2025, residential PACE financing is only available in California and Florida, making it a distinctive option for Sunshine State homeowners.

How PACE Financing Works

PACE eligibility is based primarily on property equity rather than credit scores, making it accessible to homeowners who might not qualify for traditional financing. There is no down payment required and all closing fees are included in the financing total. Once approved, the homeowner selects a licensed contractor, completes the work, and the repayment is added as an assessment on their property tax bill.

Interest rates for PACE typically range from six to thirteen percent, with terms spanning ten to twenty-five years. Eligible improvements include impact windows and doors, roofing upgrades, HVAC systems, insulation, solar panels, and other qualifying energy-efficient or storm-hardening upgrades.

County Approval Requirements

As of July 1, 2024, Florida law requires each county to approve PACE financing before it can be offered to residents in that county. Many counties and cities across the state have already adopted resolutions approving PACE programs, but coverage is not universal. Homeowners should verify that their county participates before counting on PACE as a financing option.

What Buyers Need to Know About PACE

This is where PACE financing gets complicated for real estate transactions. When a property with a PACE assessment is sold, the assessment legally transfers with the property tax bill to the new owner. In practice, however, most buyers and their lenders demand that the seller pay off the PACE balance at closing.

The reason is significant. Fannie Mae and Freddie Mac refuse to purchase mortgages on properties with active PACE assessments. This dramatically reduces the pool of eligible buyers and can force sellers into accepting lower offers or limiting transactions to cash buyers. FHA and VA loans also have restrictions on properties with PACE liens.

PACE vs. My Safe Florida Home Program

The My Safe Florida Home program offers a different approach with matching grants of up to $10,000 for qualifying hurricane-hardening improvements. Unlike PACE, these grants do not create a lien on your property and do not complicate future sales. For homeowners who qualify, the MSFH program is often a better first option before considering PACE financing.

Making an Informed Decision

PACE financing can be a useful tool for homeowners who plan to stay in their homes long term and need to fund significant improvements without upfront costs. However, buyers should carefully weigh the higher interest rates compared to home equity loans, the impact on future resale, and the potential complications with conventional mortgage financing.

John Belt with Keller Williams On The Water advises buyers throughout Manatee and Sarasota counties on properties with existing PACE assessments and helps sellers understand how to address PACE balances before listing. Whether you are buying or selling, having an agent who understands PACE ensures a smoother transaction.