PACE Home Improvement Loan Program in Florida Criticized by Consumer Advocates for Needing Fixes

Florida PACE Program

Florida’s PACE Home Improvement Loan Program, which enables homeowners to pay for home improvement costs through their tax bills, has more participants than any other state but also the least amount of consumer protections in the US. PACE financing, which is available only in three states (California, Missouri, and Florida), has garnered criticism from consumer advocates, including investigations, lawsuits, and complaints. However, bills aimed at strengthening consumer protections have failed to pass in Tallahassee. This program appeals to homeowners because it does not require a credit check or money down. Hurricane-resistant roofs and windows and energy-efficient AC units are popular items homeowners purchase with PACE financing.

Consumer advocates are concerned that PACE operates under more relaxed approval and disclosure regulations than traditional lenders. PACE providers are not held accountable under the Truth in Lending Act, which guarantees that lenders confirm that borrowers can pay back the loan and comprehend its cost, leaving borrowers without the option of suing PACE providers if they realize they cannot afford the loan. This lack of protection resulted in a class-action lawsuit against one of the nation’s leading PACE providers and a Federal Trade Commission order finding the company guilty of fraud. Florida’s Attorney General’s office has no dedicated watchdog overseeing PACE providers, leaving the South Florida Green Corridor Board as the only agency with oversight over Ygrene Energy, the state’s largest PACE provider. However, other states, such as California and Missouri, have taken more stringent measures.

Florida’s oversight of PACE varies county by county, with some being more aggressive than others. The Pasco County tax collector’s office, for instance, hired a full-time staff member to call homeowners after placing a lien on their homes to explain the PACE loan’s impact on their taxes. Following Pasco’s lead, other counties have enacted stricter consumer protections, such as Palm Beach County’s mandatory disclosure form for all PACE customers and Broward County’s regulations requiring that contractors charge market prices for products and that total costs not exceed a specific limit. Nonetheless, Collier County and Hernando and Hillsborough counties banned the program due to complaints about liens on homes and forged signatures. Meanwhile, Miami-Dade requires that PACE materials be presented in various languages. PACE providers, who claim their programs serve a critical niche for homeowners and the environment, face criticism from consumer advocates, who are calling for stronger regulations and oversight.

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