In a recent report, “Clearing the Air – Addressing Three Misconceptions of PACE,” Morningstar ABS Research clarified a few important points about PACE financing.
Read an excerpt, then click through to see the whole report:
As financing of energy-efficient projects through property assessments becomes more widespread, concerns and misconceptions regarding its use and oversight have become more common. Morningstar Credit Ratings, LLC explores three misconceptions we have heard from market participants regarding the residential property assessed clean energy sector. First, we note that a PACE assessment is an asset-based obligation, rather than a mortgage loan, so lien-to-value ratio, more than an individual’s credit score, is a more appropriate risk indicator.