Updated August 17, 2026
PACE — Property Assessed Clean Energy — finances energy, water and seismic improvements and is repaid through a special assessment on the property tax bill rather than as a conventional loan.
Because it is an assessment rather than a mortgage, it sits senior to existing debt. That seniority is why most commercial lenders will not fund a loan behind an outstanding PACE assessment, and why it is typically paid off at closing.
PACE has been used across California for seismic retrofits, roofing, HVAC and solar on multifamily buildings, and balances can run into six figures. It appears as a direct assessment on the property tax bill — check the bill line by line before pricing a sale, because payoff figures include prepayment premiums and administrative fees.
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