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Funding and Financing

DC Green Bank: DC PACE Financing

Building Sector:

Commercial Office Hospital Hotel Industrial Institutional Multifamily Affordable Housing Multifamily Market Rate Housing

Energy Type:

Electricity Gas Solar Water

Financial Incentives:



DC Green Bank

Program Name

DC Property Assessed Clean Energy (PACE) Financing

Program Summary

DC PACE offers affordable, long-term, 100% financing for building upgrades, repaid through the property tax bill. It is a program of the Department of Energy & Environment and is independently administered by Urban Ingenuity.

Applicable building size



Building owners, property managers, investors, or project developers that have clean energy projects and are looking for long-term financing for their building upgrades or ECMs added to their new construction projects. Any measure that directly reduces utility costs or adds renewable-generating capacity is eligible. In addition, DC PACE can finance measures that are substantially related to or necessary for the installation of these energy and water conservation measures.


  • Incentive/funding details. DC PACE connects property owners with 100% private financing from a range of local and regional banks as well as PACE-specific lenders and other lending institutions.
  • Contract structure. PACE Closing Documents include a PACE Funding Agreement, PACE Agreement, memorandum of agreement, and special assessment (which is recorded in the land records), and a PACE Revenue Note signed by the mayor.
  • Amount (max, min, average). Typically, the minimum size for a PACE project is $100,000, though smaller projects focusing on a single measure are also eligible. There is no maximum size. Average is about $600,000.
  • Simple payback. The property owner will make semi-annual PACE special assessment payments. The Office of Tax and Revenue (OTR) will send the property owner the semi-annual PACE Assessment bill according to the normal property tax schedule. In most circumstances, the first PACE assessment payment will be due at the end of the next full half tax year following the PACE closing.
  • Tax and balance sheet. While the ultimate decision about how to treat PACE should be made by your accountant, there is precedent for treating PACE as off-balance-sheet financing. PACE is not traditional mortgage debt, but instead is a semi-annual special assessment obligation taken on by a property owner. As with real estate taxes, it is non-accelerating, and in the case of delinquency or default, only missed payments and penalties are due (future payments do not become due). In addition, PACE is tied to the property, not the borrower, and in most cases the payment obligation simply transfers to a new owner upon sale of the property.
  • Pairing with other sources.
    • DCSEU & other utility incentive programs: DC PACE is compatible with DCSEU rebates and incentives, many other local and federal subsidies and tax benefits, and more. Property owners are encouraged to take advantage of as many rebates and subsidies as possible, and the Administrator can help connect you to DCSEU. Note: the administrator is not liable for any loss of or change to a rebate or tax credit.
    • LIHTC deals: PACE can typically be used in the context of both 4% and 9% LIHTC transactions, a structure used in affordable housing finance.
    • Tax-exempt bond financing: DC PACE can be integrated into larger, tax-exempt revenue bond financed projects, to provide an additional source of proceeds beyond the revenue bond debt, and displace other capital contribution requirements. PACE may also be available at tax-exempt rates on a standalone basis for qualifying projects.
    • Traditional commercial lending for retrofit and new construction: PACE can finance a portion of project costs (e.g. up to 20%), reduce equity contribution or other high-cost capital, and can fill a gap in the capital stack.


  • When in the project process an application should be started/completed. Interested applicants are encouraged to seek approval from the program Administrator and close on PACE financing before starting construction. At minimum, the property owner should submit a Preliminary Application and receive a Letter of Preliminary Eligibility prior to beginning construction on the PACE project (or PACE-eligible project components, if PACE is to be part of a larger project). Construction may then proceed in parallel with the remainder of the PACE approval process. On a case-by-case basis, DC PACE may also approve new applications for projects that have already begun construction. However, property owners are advised that until an application has been submitted and approved, there is no guarantee that the project will be approved. In addition, prior to closing, there is no guarantee that a capital provider will provide the PACE funds. PACE may be used to refinance PACE-qualifying projects under certain circumstances. Guidance for determining PACE eligibility, qualifying investments, and calculating the savings-to-investment ratio will all be established on a project-by-project basis. Please contact the Administrator early in the project development process to discuss any PACE funding for refinancing projects.
  • Level of effort required. Funding may commence with draw requests and project execution.
  • Length of time to receive funding. Upon closing, the capital provider will make funds available as agreed in the PACE Funding Agreement.
  • Contractor requirements. Contractor requirements are as follows:
    • Be in good standing with regard to licensing applicable to the trades proposed; qualified to do business in DC; hold any other necessary permits, certificates, registrations, and approvals.
    • Fill out the DC PACE Contractor Registration form and submit supporting documentation, including three references or case studies.
    • Attend a contractor training within six months of registration. DC PACE contractor trainings are held quarterly. Contractors may also contact the Administrator to schedule individual trainings for their company.

Additional information

  • Advantages. Since PACE is tied to the property, not the borrower, in most cases the payment obligation simply transfers to a new owner upon sale of the property.
  • Disadvantages. Requires mortgage lender approval.
  • Ownership types or organizations are best suited for the program. Non-profit and special use; industrial; institutional; multifamily; commercial office/retail.
  • Program fit for customer. You want to reduce utility bills, improve cash flow, lower capital costs, extend capital budgets, increase property value, make your building or project more sustainable.

Take action

Visit the DC Pace website.

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