Colorado C-PACE for Mortgage Holders
Colorado C-PACE financing is secured by a special assessment and corresponding lien placed on the building owner’s property. This assessment is senior to all commercial liens, including mortgages and deeds of trust. It is equal (pari passu) in priority to other special assessments on the property and junior to general tax liens.
The Colorado C-PACE Statute at C.R.S. 32-20-105(3)(i) requires that property owners receive the consent of all holders of mortgages or deeds of trust on the property to the imposition of the C-PACE assessment.
Furthermore, under the Colorado C-PACE statute, energy improvements may be financed under the program as long as they generate “utility cost savings.” The majority of C-PACE projects generate positive cash flow based on the energy savings. For this reason C-PACE projects typically have a positive impact to a mortgage holder’s key questions – What is the project’s impact to:
- Borrower’s repayment ability
- Collateral value
To support mortgage holder project evaluations, the Colorado C-PACE program administration team provides an independent 3rd party review of the technical and financial projections. Such review is consistent with industry best-practice methodology as defined in the Environmental Defense Fund’s Investor Confidence Project protocol. Moreover, the Colorado C-PACE team leverages its proven project optimization tools and extensive project experience databases to facilitate quality assurance across the project development life cycle.
Given the cash flow generating characteristics of C-PACE projects, over one hundred mortgage lenders nationwide have consented to C-PACE projects as of October 2015. Click here to view list of C-PACE Consenting Financial Institutions from PACENow Lender Consent Study.
Contact us to learn how Colorado C-PACE is supporting mortgage holder’s consent evaluations for C-PACE projects. These C-PACE projects add value to the mortgage holder-building owner relationship by:
- Increasing borrower’s repayment ability
- Reducing borrower’s default risk
- Increasing mortgage holder’s collateral value
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