On March 3, Woodstock town voters will be asked whether they want to “opt in” to a state-sponsored loan program meant to save homeowners money on their energy bills.
At the request of the Woodstock Energy Group, the Woodstock Selectboard recently agreed to place the item on the March ballot for voice vote. The Woodstock Energy Group is associated with the larger Sustainable Woodstock community organization.
The Property Assessed Clean Energy program (PACE), approved by the State legislature two years ago, allows property owners in participating towns to borrow money — through the town — for home energy efficiency improvements, and pay those loans back via assessment on their tax bills. But first, an interested town must have the voters’ support to participate.
Chris Miller of the Woodstock Energy Group spoke to the Woodstock Selectboard Tuesday night, answering questions from town officials. He said two reserve funds are being created (one of which is through the state) to back up the towns if past-due payments in this program become an issue.
As with any loan program, the customer must first pass financial qualifications (credit score, etc.) in order to receive a loan.
However, Selectboard member Bruce Gould asked Miller whether these qualifications were as strict as some bank loan programs, which these days tend to turn large numbers of borrowers away?
Miller said the home’s current energy performance is given equal weight to the financial requirements, which are less rigid than some traditional loan programs. He added that the interest rate for these loans is likely to be 1 or 2 points higher than the typical rate of a 30-year fixed-rate mortgage. (This would fall around the 5- to 6-percent range). The limit on financing through the program is $30,000, or 15-percent of the assessed value of the property – whichever is less.
Below is an excerpt from a description the Woodstock Energy Group submitted for the town report about t he ballot measure:
PACE, or Property Assessed Clean Energy, is a voluntary program allowing individuals to opt in to a special tax assessment district created by their municipality. Using PACE, energy efficiency and/or renewable energy improvements can be funded by taxable municipal bonds or other municipal debt, and repaid over up to 20 years.
Property owners borrow money through the Town and pay it back as an assessment on their tax bills. PACE is an alternative to, but not a replacement for other standard commercial financing methods like home equity loans. The major difference between PACE and a bank loan is that the PACE assessment goes with the property, not the person, and stays with the property as a lien when the property is sold. Qualifying for PACE is based on the characteristics of the property and the proposed improvements, rather than the financial resources of the owner. For some homeowners, a PACE loan may better suit their needs.
The Vermont Legislature created the enabling legislation for PACE in 2009 and revised it 2011 to satisfy the concerns of the banking industry. Last year, 13 Vermont towns created PACE districts. This year, at least 40 more are looking to do the same. Town energy committees across the State, responding to the state energy plan, are bringing PACE to the voters. The Woodstock Energy Group endorses this program and encourages voters to provide this new opportunity to our homeowners. They will be available to assist the town in implementing the program.
Some details of the PACE program:
• There is no obligation on any taxpayer who does not sign up for the program.
• The administrative costs for the program will be paid for by the participants in the program.
• All projects funded through PACE need to meet some fairly strict requirements, and so financial risks should be minimal.
• If the Town chooses, it can contract with Efficiency Vermont for all administrative functions, leaving the Town with no extra responsibilities or costs.
• The cost of a project financed through PACE can be up to $30,000 or 15% of the assessed value of the property (AVP), whichever is less.
• The Loan-to-value ratio, of all outstanding mortgages plus the amount of the PACE assessment, can be up to 90% of the AVP.
From Sustainable Woodstock’s Energy Page: http://www.sustainablewoodstock.com/2012/01/energy-savings-new-opportunity-to-keep.html
Julia Carlisle
Woodstock Early Bird 