How PACE Loans Work
Key Components
- Financing for energy-efficient upgrades, such as solar panels
- Repaid through property taxes
- Typically have high interest rates and long repayment periods
You've been pitched a PACE loan by a door-to-door solar salesman, but something doesn't feel right. Be cautious: PACE loans can be risky and may not be the best option for your home. Homeowners have reported being misled about the terms and conditions of these loans, leading to financial difficulties. Know your rights and how to protect yourself from predatory lending practices.
If a door-to-door solar salesman has pitched you a PACE loan, do not sign anything until you've done your research and understood the terms. PACE loans are a type of financing that allows homeowners to borrow money for energy-efficient upgrades, such as solar panels, and repay it through their property taxes.
However, these loans often come with high interest rates, long repayment periods, and potentially devastating consequences if you fall behind on payments. It's essential to carefully review the contract and understand the risks involved before making a decision.
Do not let a salesman rush you into signing a contract. Take your time, and do not be afraid to say no if you're unsure about the terms or feel pressured.
Familiarize yourself with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), which provide protections for homeowners against predatory lending practices. File a complaint with the Consumer Financial Protection Bureau (CFB) if you suspect any wrongdoing.
If you believe you've been targeted by a predatory lender, report the incident to the authorities and seek help from a housing counselor. HomeLeafs is not a lender and does not earn commissions from loan sales, so you can trust our guidance.
Sign Up Free — Homeowners Always Free No signup required to read this guide. See all HomeLeafs guides →A PACE loan is a type of financing that allows homeowners to borrow money for energy-efficient upgrades, such as solar panels, and repay it through their property taxes. However, these loans often come with high interest rates and long repayment periods.
Be cautious of aggressive sales tactics, misleading information, and high-pressure sales pitches. If you feel uncomfortable or unsure about the terms of the loan, it's best to say no and seek advice from a housing counselor.
Yes, you may be able to cancel a PACE loan contract within a certain timeframe, usually three days, under the Truth in Lending Act (TILA) right of rescission. However, this may vary depending on your state's laws and regulations.
You can report suspicious activity to the Consumer Financial Protection Bureau (CFB) or your state's Attorney General's office. Additionally, you can seek help from a housing counselor or a non-profit organization that specializes in homeowner protection.