ORLANDO, Fla. – Some Central Florida county tax collectors have warned residents about a state-approved home improvement loan that could result in some borrowers losing their homes.

Property Assessed Clean Energy loans – or PACE loans – were approved by the Florida legislature in 2010 as a way for some homeowners to make clean energy home improvements.

The loan amounts are attached to county tax rolls as liens, and the borrowers make one large payment each year that is billed with their property taxes.

News 6 found out, though, that the large payment is taking some residents by surprise.

Orlando mother & grandmother

An Orlando woman – who asked not to be named – said she was blessed to work with Habitat for Humanity to secure the home she has lived in with her family in the city’s Parramore area for the last three decades.

She said that the 30 years took a toll on her air conditioner.

“They just going around the neighborhood, and they was checking to see who all needed new air conditioning units,” she said. “I was like, ‘OK, I have had the same air conditioner for 30 some years, so why not?’”

She signed up for a nearly $17,000 PACE loan through the Florida PACE Funding Agency for new attic insulation and a new AC unit.

The term of her loan is 15 years, and her one-time-a-year payment of $1,521 is added to her Orange County property tax bill.

She said she thought it was a grant, and when News 6 spoke with her, she had no idea she was two years past due and in danger of losing her home.

“I feel like I have been duped,” she said. “I never got anything in writing.”

FPFA said Wiley did receive paperwork outline the terms of the agreement.

Counties respond

Orange County Tax Collector Scott Randolph said PACE loans tend to target lower income homeowners, people with poor credit and those that do not have a mortgage or escrow.

“I would say it’s very advantageous for the lender, and not necessarily the consumer,” he said.

News 6 showed him records from his office showing the mother’s delinquency on her payment.

“What goes through my mind is the unfortunate situation that these homeowners have been put in, perhaps without all the information?” he said. “I think PACE isn’t necessarily bad on its face, but once again, here in Florida, we’ve allowed a program to come up with very little oversight by the state.”

He said if a consumer is late on their yearly installment, their property would go to a tax deed sale, and at that point, the house would be sold at auction.

“There comes a time when you take an oath of office, and something is so glaring you have to stop and say, ‘Hold on,’” said Lake County Tax Collector David W. Jordan.

His comments came during a county commissioners meeting in September, where the panel crafted a resolution claiming FPFA posed “an immediate danger” to residents, and they banned future PACE loans in the county.

“I don’t think a lot of people really understand what the ramifications are once they sign up, and they can’t fulfill their obligation,” Commissioner Kirby Smith said.

Florida PACE Funding Agency

Mike Moran is the executive director of the Florida PACE Funding Agency, one of the avenues homeowners can choose when deciding to borrow money under the PACE program.

He also serves as a county commissioner for Sarasota County.

He told News that 6 PACE assessments are often the best option.

“The roof is leaking, it’s making the drywall wet, it’s $40,000 to replace the roof,” he offered as an example. “What it comes down to is that they are going to either pay cash, but if they don’t have it, they’re going to borrow it from friends and family members who are struggling with it, as well. They’re going do a home equity line of credit, which is very difficult for some people, and it’s underwritten, and they might not get approved. Basically, what it’s going to come down to is the last two choices -- they’re going to put it on a 29% credit card, or they’re going to finance it through the Property Assessed Clean Energy program with us, and that’s 9%. It is literally that drastic of a difference.”

He said the loans are backed by private investors, who are attracted to them because the risk is low, and the return on their investment is virtually guaranteed.

If a home is sold at auction, back-taxes and assessments are paid, including a PACE loan.

News 6 asked Moran if clients have experienced trouble repaying the loan with the large, one-time-a-year payment.

“Actually, folks that have a PACE assessment have less of a default rate under normal people and under the normal financial stresses of homeownership and owning a business,” he said. “All of our closings — all of them — have an audio tape phone call a behind it. So, what happens is, when these folks get into the financing solutions for their family, details of that financing are crystal clear.”

A spokeswoman for FPFA added that some contractors and marketing groups are using FPFA’s logo without their permission and offering to help consumers.

Moran said he asked local governments to let him know if this happens in their area.

Heading to court

In 2022, Florida PACE Funding Agency filed a Complaint for Validation with Leon County, where FPFA claimed the judge’s eventual ruling allowed them to process loans in every county in Florida without obtaining any county agreements.

FPFA filed that opinion with several Central Florida tax collectors.

Last October, 14 counties, including Brevard, Lake, Orange and Volusia, and 19 county tax collectors, filed a motion asking Circuit Judge Lee Marsh to clarify his ruling.

“In an abuse of bond validation process, Florida PACE Funding Agency sought through its bond validation proceeding to invalidate the constitutional and statutory rights of the Counties and Tax Collectors because FPFA finds those rights inconvenient,” the motion reads.

Marsh has scheduled a hearing on Feb. 2 for arguments in the case.

Moran would not comment on the pending case.

Mother’s future

Back in Parramore, the homeowner in danger of losing her home worked with her church and neighbors to help pay her bill, but she now worries about her next installment.

“I can’t afford it,” she said. “There’s too many homeless people already on the streets, and I can’t be another number.”

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