HUD-Financed Apartments Eligible for Favorable Loans
Digested from "Federal decision could mean a windfall for apartment-building owners"
Sacramento Business Journal (5/4/15) Anderson, Mark
Apartment buildings financed with federal money can now use a federal loan program with favorable borrowing terms to finance energy-efficiency improvements.
California Governor Jerry Brown successfully lobbied the U.S. Department of Housing and Urban Development (HUD) to allow building owners with mortgages from HUD to use the Property Assessed Clean Energy (PACE) program to install solar panels, efficient HVAC systems, energy-efficient windows and insulation. Nonprofits are often the owners of HUD-financed apartment buildings that provide senior, low-income and mixed-income housing.
Apartment owners do not need to provide a down payment on PACE loans, and the interest on the loan is tax deductible. In addition, owners have up to 20 years to repay the loan through their property-tax payments.
PACE financing of up to 9.9 percent of a building's equity is available to owners now.