If a solar salesperson tells you the financing goes on your property tax bill, no money down and no credit check, stop and ask one question before you sign anything. Does this record an assessment against my house?
If the answer is yes, you’re being sold PACE, and in most programs the lien it records sits ahead of your mortgage.
PACE stands for Property Assessed Clean Energy. A local government program fronts the cost of the panels, usually through a private company that runs the program on the government’s behalf, and you pay it back as a line on your property tax bill. Terms run 5 to 25 years, rates land somewhere around 6.5 to 9 percent, and a residential solar job runs about $25,000. The pitch sounds like a government incentive because technically it moves through one. That’s the whole reason it works on people.
Here’s the catch. Because the debt rides on the tax bill, it inherits the tax bill’s priority. Fannie Mae’s selling guide says flatly that it will not buy a mortgage on a property with an outstanding PACE loan “unless the terms of the PACE loan program do not provide for lien priority over first mortgage liens.” Translation: when you go to sell or refinance, that balance usually has to be cleared first, out of your money, on the buyer’s timeline.
For years none of this came with mortgage paperwork. PACE sellers argued it wasn’t credit at all, just an assessment, so no Truth in Lending disclosure and no check on whether you could afford it. It took an act of Congress to change that. The CFPB didn’t volunteer for this rule, it was ordered to write one.
That ended on March 1, 2026. The CFPB’s residential PACE rule now treats these deals as credit under the Truth in Lending Act. The creditor and the PACE company have to make “a reasonable and good faith determination of a consumer’s ability to repay,” verify what you told them against third-party records, and hand you a Loan Estimate and a Closing Disclosure, the same two forms you get on a mortgage.
One line in that rule tells you exactly how these deals were landing on people. The CFPB requires the affordability check to account for the hit to your escrow. If your taxes are escrowed, a PACE assessment drops into that account, triggers a shortage, and your monthly mortgage payment jumps. “No money down” showed up later as a bigger house payment nobody had explained.
So if you’re getting pitched right now, especially with the 30 percent federal credit gone and every salesperson hunting for a way to say zero down, ask for the Loan Estimate. Since March they owe you one. No form, no signature, walk.
Then compare it honestly. Put the PACE quote, a plain solar loan, and paying cash side by side in our solar calculator and judge them on total paid over the full term, never the monthly. Our solar hub covers the rest, including which financing types zero out your panels at appraisal.
Residential PACE only runs in a handful of states, California and Florida being the big ones, so most of the country will never see this pitch by that name. The assessment is the tell, not the map.
And if you already have one and a move or a refinance is coming, call the program administrator for the payoff figure now. Find out what it costs while you still have time to plan around it, not the week the buyer’s lender finds it on the title report.
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