What Is a PACE Loan and Why Is It a Problem When Selling?
PACE stands for Property Assessed Clean Energy. It is a financing program that lets homeowners pay for energy-efficiency improvements — new roofs, air conditioning systems, impact windows, solar panels, insulation — through an assessment added to their property tax bill.
In Florida, Ygrene Energy Fund was the dominant PACE lender, particularly in Miami-Dade County. Tens of thousands of South Florida homeowners used Ygrene to finance post-hurricane improvements or energy upgrades, often without fully understanding what would happen when they tried to sell.
What PACE Covers
- New roof or roof repair
- Impact windows and doors
- Air conditioning systems
- Solar panels
- Insulation and weatherproofing
- Water heaters
The Problem at Sale
- Lien stays with the property, not the borrower
- New owner inherits the payments
- Fannie Mae, FHA, VA won't approve mortgages on PACE properties
- Most buyers using financing are eliminated
- Must be paid off or assumed at closing
The core problem is simple: the PACE lien has priority status in the payment hierarchy — in some cases ahead of the first mortgage. Major mortgage backers including Fannie Mae, Freddie Mac, FHA, and VA have all restricted or prohibited financing on homes with active PACE liens. This wipes out the vast majority of buyers in any market.
What Ygrene Specifically Means for Miami-Dade Sellers
Ygrene was aggressively marketed throughout Miami-Dade County, often door-to-door by contractors. Many homeowners signed up for financing without realizing the lien would show up in a title search and block a future sale.
If you have a Ygrene loan, the balance and payment schedule appear on your annual property tax bill from Miami-Dade County. The lien is recorded in the Official Records of Miami-Dade County and will be discovered by any title company doing a title search on your property.
Note: Ygrene Energy Fund ceased originating new loans in Florida following regulatory and legal action. However, existing Ygrene loans remain active and continue to be collected through property tax bills. The lien does not go away on its own — it must be paid off or addressed at the time of sale.
Your Options When Selling With a PACE or Ygrene Loan
💰 Sell to a Cash Buyer
No lender restrictions. Cash buyer purchases as-is. PACE balance is factored into the deal and paid off at closing. Fastest resolution.
✅ Pay It Off at Closing
If you have enough equity, the PACE balance is paid from sale proceeds at closing — same as paying off a second mortgage. Clears the lien and allows a traditional sale.
🔍 Find a Portfolio Lender
Some local banks and credit unions that keep loans in-house are not bound by Fannie/Freddie rules and may lend on PACE properties. Rare but possible.
⏳ Wait It Out
PACE loans have fixed terms — typically 10 to 25 years. You could hold the property until the balance is paid down enough to cover at closing. Not practical for most sellers.
What If You Don't Have Enough Equity to Pay It Off?
This is where things get complicated. If your mortgage balance plus your PACE balance exceeds your home's market value, a traditional sale becomes very difficult even with a cash buyer willing to pay full market value.
In this situation, the realistic paths are:
- Negotiate with Ygrene's servicer for a discounted payoff — similar to a short payoff on a second mortgage. Success varies.
- Work with a cash buyer experienced in distressed title situations who can structure the deal creatively.
- Consult a real estate attorney about your options, particularly if you are also facing other financial pressures.
The one thing that does not help is waiting. PACE assessments accrue interest and the balance does not decrease on its own without payments.
Common Questions
Does a PACE loan show up on a title search in Florida?
Yes. PACE liens are recorded in the Official Records of the county and will be found by any title company doing a standard title search. There is no way to hide it or work around it in a traditional sale. It must be addressed before or at closing.
Can the buyer just take over my Ygrene payments?
In theory, the PACE assessment transfers with the property and the new owner becomes responsible for the payments. However, most buyers using mortgage financing cannot purchase a property with an active PACE lien regardless of their willingness to take over payments. A cash buyer can take on the property with the PACE lien intact, but this will typically be reflected in a lower offer price.
How do I find out my Ygrene payoff balance?
Your PACE assessment balance appears on your Miami-Dade County property tax bill. You can also contact the servicer handling Ygrene's portfolio directly. Your title company can also pull the exact payoff figure as part of a title search when you are preparing to sell.
Is a PACE loan the same as a lien?
Yes. A PACE loan is secured by a lien on the property, recorded in the county's official records. It functions similarly to a second mortgage in that it must be paid off when the property is sold, but it differs in that it is collected through the property tax bill and has a different priority structure than a traditional mortgage lien.
Will a cash buyer pay less because of the PACE loan?
Typically yes, if the PACE balance is being paid off at closing from the sale proceeds, the net amount to you is reduced by that payoff. If a cash buyer is purchasing the property and assuming the PACE obligation, they will generally offer less to account for the liability they are taking on. The exact structure depends on the deal and is negotiable.
Does Acrux Trust buy homes with Ygrene or PACE loans in Miami-Dade?
Yes. We buy homes with active PACE and Ygrene liens throughout Miami-Dade County. We are familiar with how these deals are structured and can make a cash offer within 24 hours. Call us at (305) 925-2475 to discuss your property and get a no-obligation offer.
