C-PACER Program Benefits
Program Benefits
Property Owners
Up to 100% Financing:
For new construction, this means less developer equity is required to advance the project forward. For improvements to existing structures, 100% of the eligible project costs can often be financed via a C-PACER transaction.
Long Term Financing:
C-PACER financing allows property owners make long term investments that pay for themselves. The maximum term of C-PACER financing is determined by the lender, and can extend up to thirty (30) years.
No Personal Guarantee:
C-PACER financing is property-based financing supported by the assessment lien on the property itself. This means the property owner typically does not provide a personal guarantee once construction is complete.
Transfer Upon Sale:
If a property owner sells the property, the assessment lien transfers to the next owner unless voluntarily paid off upon the sale. This allows developers to make long-term improvements to projects even if they do not intend to be long-term owners.
Cost Recovery:
In well-executed projects the utility cost savings and other financial benefits generated by C-PACER financing exceed the cost of the payments, resulting in positive cash flow from day one.
Capital Providers
C-PACER financings are secured by an assessment lien on the property. The assessment has the same priority status as a lien for any other ad valorem tax, except that it shall be junior to any lien for property tax or other taxes or assessments by the municipality. As a result, C-PACER capital providers are willing to provide attractive, long-term loans.
Mortgage Holders
C-PACER financing serves as a valuable complement to senior lenders and can significantly contribute to the capital stack for a project. In the event of a default, only the delinquent assessment payments may be enforced; the remaining amount of the C-PACER financing does not accelerate. Mortgage holders therefore continue to enjoy the security benefits of their 1st position mortgage, while simultaneously benefitting from an overall lower loan-to-value related to that mortgage. C-PACER’s unique structure allows it to fill gaps in financing, providing additional funds that can enhance project viability and accelerate its progress. Projects utilizing C-PACER financing typically yield total savings that exceed the payment obligations associated with the C-PACER financing, leading to increased net operating income, debt service coverage ratio, property value, and collateral coverage.
Communities
Local Governments can enable C-PACER financing in their community to incentivize development and grow the tax base. C-PACER financing allows smart, efficient projects to proceed using private capital rather than taxpayer dollars. Eligible projects include traditional commercial and retail structures, manufacturing facilities, and multi-family housing of five or more units.