TIPS FOR SELECTING A CONTRACTOR
Choosing a participating contractor to install energy-saving improvements in your home is an important decision. When you begin your search, consider these tips:
- Use online review sites to research potential contractors.
- Conduct interviews with participating contractors.
- Clearly explain your project goals.
- Get three bids for your project.
- Read the full proposal before signing a contract.
- Sign the completion certificate only after all work is finished.
FREQUENTLY ASKED QUESTIONS
1. Who are HERO and PACEFUNDING?
Through a competitive solicitation, Los Angeles County chose two program administrators to operate its Residential PACE Program—HERO and PACEFUNDING. Choosing two administrators creates competition and gives homeowners more choices. If two administrators are competing for LA County residents’ business, then they will be driven to offer the best possible product for consumers. At this time, only HERO and PACEFUNDING are providers for the LA County Residential PACE Program.
2. How are the LA County HERO and PACEFUNDING programs different and how are they the same?
LA County HERO and PACEFUNDING Residential PACE programs are different in that they may choose to: market their programs differently; offer different interest rates, fees and financing terms; require more stringent underwriting criteria; provide different timelines for payout; and/or provide different levels and methods of customer service. These are a few of the things that will differentiate the administrators and give consumers the power to make an informed choice about with whom to work to obtain Residential PACE financing. The programs are the same in that LA County will require/provide the following for both administrators: minimum underwriting criteria; the same or very similar contractual document templates; and certain fixed fees. LA County will also issue PACE bonds—the financial mechanism that facilitates completion of a PACE financing transaction—for both program administrators.
3. Are all 88 cities within LA County part of the LA County Residential PACE program?
To participate in the LA County Residential PACE Program with HERO and PACEFUNDING, a city must pass a resolution to opt in. A list of participating cities can be found HERE. Some LA County cities have opted into additional residential PACE Programs sponsored by entities other than LA County. For those cities that have opted into other programs, such as those run by FigTree and Ygrene, there will be no administrative support provided by the County.
4. What are the benefits of a LA County-sponsored Residential PACE program as opposed to one that is not sponsored by LA County?
Since LA County is sponsoring this program, it has the ability to require the following consumer-friendly measures: stricter underwriting criteria; additional quality assurance/quality control measures; better consumer protections; additional disclosures; services for elderly and non-English speakers; and additional foreclosure support through a reserve fund. Residential PACE programs offered by others may not have such stringent consumer protections built into them.
5. Can a homeowner use any contractor to install products financed through LA County’s Residential PACE program?
No. Contractors must be registered with either the LA County HERO or PACEFUNDING programs in order to install products eligible for PACE financing. Both have many participating contractors who are specially trained to help the homeowner through the PACE financing process. To find a participating contractor, visit the HERO and PACEFUNDING program websites.
6. Do I need to finance the total value of the upgrade(s) through PACE, or can I pay some of that in cash?
The PACE program allows participants to pay any portion of their energy upgrades using either cash or a separate financing vehicle, so long as the PACE financing component is equal to at least $5,000. Participants should keep in mind the increase in annual property taxes that will result from a PACE assessment, and use this figure in determining the amount of energy upgrades that can reasonably be afforded.
7. Where exactly does my PACE assessment appear on the Annual Secured Property Tax Bill?
If you have been approved for PACE financing and have executed an assessment contract, the annual assessment payments will appear under the Direct Assessment Section of your property tax bill. Some examples of how the assessment will appear are WRCOG Hero, LACEP RES PACE, LACEP RES 2016 or LACEP COMM to name a few. If you have a specific question in regards to your direct assessment, please refer to the telephone number found on your Annual Secured Property Tax Bill.
8. My mortgage lender pays my annual secured property tax bill, through an impound account. Do I need to inform the mortgage lender of the dollar value of upgrades financed through PACE so they can increase the monthly amount I pay to them?
Yes. Property owners should consult with their lender(s) or mortgage servicer(s) prior to entering into an assessment contract. Entering into an assessment contract without the consent of an existing lender(s) or mortgage servicer(s) may constitute an event of default under such agreements or security instruments. Defaulting under an existing mortgage agreement or security instrument could have serious consequences to property owners, which could include demand for payment in full or foreclosure. Additionally, we recommend that property owners share contractual documents with lender(s) or mortgage servicer(s) to determine the appropriate increase for the escrow impound account to render payment for property taxes.
9. Can a lender foreclose on my property if I miss just one installment payment for my annual secured property tax bill?
While assessment bonds in California typically allow for judicial foreclosure following a single missed payment, the County’s residential PACE program provides significantly greater protections for its participants. Judicial foreclosure can be initiated by bondholders in the County program only if: 1) a participating homeowner is delinquent for seven months following the second installment due date of February 1st; 2) the homeowner fails to resolve this delinquency within a subsequent 60-day cure period; 3) the cash reserve fund for the County’s residential PACE program has been depleted; and 4) the Program Administrator’s reserve fund “backstop” has been exhausted. As a result of these conditions, it is unlikely that one missed PACE assessment will trigger a judicial foreclosure and threaten the participant with the loss of their home.
10. What is the Los Angeles County Energy Program and how does it relate to LA County’s Residential PACE program?
The Los Angeles County Energy Program (LACEP) is the name used in LA County’s legal documents to describe both its Residential PACE program and its Commercial PACE program. Cities that have passed resolutions to participate in LA County’s PACE program have probably noticed this term on their resolutions. Consequently, all cities that have passed resolutions opting into LACEP are participating in both LA County’s Residential and Commercial PACE Programs.
11. What is the history of PACE in California?
In California, the first commercial and residential PACE programs were established in 2008. The residential programs soon encountered a significant hurdle. The Federal Housing Finance Agency (FHFA) was concerned that residential PACE assessments had a lien status superior to that of existing mortgages underwritten by Fannie Mae and Freddie Mac. Despite these objections, several residential PACE Programs continued to operate, including the Sonoma County Energy Independence Program (SCEIP), the City of Palm Desert’s PACE Program and California HERO. None of these programs have met any repercussions from the FHFA, Fannie Mae or Freddie Mac to date. In an effort to keep residential PACE alive in California, the State, its governor, several residential PACE Program administrators and local governments tried a number of methods to engage the FHFA in a conversation to agree to a solution. Since 2010, a number of developments have been made towards mitigating FHFA’s concerns. This includes the implementation a statewide reserve fund created by Governor Jerry Brown, statewide legal validation of several residential PACE programs, additional disclosures to consumers and a variety of consumer protection measures. As a result of the above measures taken to address FHFA’s concern, the positive involvement of the State and Governor Jerry Brown, and the lack of action from FHFA, many cities and counties now have operating residential PACE Programs. To date, thousands of residential PACE assessments have been completed in California indicating millions of dollars of investment by California homeowners in energy efficiency, water efficiency and renewable energy projects saving them money on their utility bills and creating jobs.
12. How can I file a refund claim for taxes and/or penalties?
File a claim with the LA County Auditor-Controller. If you feel
you are entitled to a refund of taxes and/or penalties, you are
required to complete a Refund Claim Form.
https://auditor.lacounty.gov/bwl-advanced-faq/how-can-i-file-a-refund-claim-for-taxes-andor-penalties/
