PACE Loans in Florida: What Tampa Bay First-Time Buyers Must Know Before Closing

# PACE Loans in Florida: What Tampa Bay First-Time Buyers Must Know Before Closing

Most Tampa Bay first-time buyers spend months thinking about credit scores, down payment programs, and interest rates. Few think to ask whether the home they are buying already has a hidden obligation attached to it — one that could derail their mortgage approval days before closing.

That obligation is a PACE assessment.

PACE stands for Property Assessed Clean Energy. It is a legitimate financing tool that homeowners use to pay for solar panels, hurricane-impact windows, roofing upgrades, HVAC systems, and insulation — all good things. The problem is not what it finances. The problem is how it is secured, and what that means for the next buyer.

What Is PACE Financing and How Does It Work in Florida?

PACE is a government-authorized financing program that lets property owners borrow money for qualifying home improvements and repay that money through a special charge added to their annual property tax bill. In Florida, programs are administered through entities like the Florida PACE Funding Agency and must be approved county by county before they can be offered to residents — a requirement established by Florida's SB 770 in 2024.

Eligible improvements typically include:

• Solar panels and battery storage systems
• Hurricane-impact windows and doors
• Roof replacements
• HVAC systems and heat pumps
• Insulation and air sealing

Repayment terms usually run 10, 15, or 20 years. Because the payments flow through the property tax bill rather than a monthly invoice from a lender, many homeowners find PACE convenient. The problem only becomes visible at resale.

Why Does a PACE Lien Matter When You Are Buying a Home?

In Florida, property tax obligations hold first-lien priority. That means a PACE assessment — structured as a non-ad valorem special tax — sits ahead of your mortgage in the payment hierarchy. If the property goes into foreclosure, the PACE creditor gets paid before your lender does.

This is a problem for mortgage lenders.

FHA, VA, Fannie Mae, and Freddie Mac all have policies that restrict or prohibit financing homes with first-priority PACE liens. The A CFPB rule that took effect in March 2026 introduced additional disclosure and consumer protection requirements for PACE programs, but it did not eliminate the lien priority issue.

When your lender orders a title search and discovers a PACE assessment on the home you are under contract to buy, the response is almost always the same: pay it off before closing or the loan cannot proceed.

That payoff obligation typically falls on the seller, who must cover the remaining PACE balance from their sale proceeds. If the seller cannot or will not pay it off, you may lose the deal — or be forced to renegotiate the price.

How Do You Find Out if a Home Has a PACE Assessment?

There are two places to look, and your agent and title company should check both.

The property tax bill: PACE assessments appear as non-ad valorem charges on the annual tax bill — a separate line item below the standard county, school, and municipal tax amounts. When reviewing a listing, ask for the most recent tax bill and look for any non-ad valorem amounts outside of HOA or CDD fees.

The title search: Any recorded PACE lien will appear in the title commitment. Your title company will order a full title search as part of the closing process, but flagging this early prevents last-minute surprises. If you are shopping in Hillsborough, Pinellas, Pasco, Manatee, Polk, or Hernando County — all areas where PACE programs have operated — ask your agent to request an early title check on any serious candidate before you go under contract.

Note that in Hillsborough County, PACE financing is currently only available in unincorporated areas. If the home you are buying is within the city limits of Tampa, Plant City, or Temple Terrace, it may not be PACE-eligible, but it is still worth confirming before making assumptions.

Can You Still Use FHA or Conventional Financing if a PACE Lien Exists?

Yes — but only after the lien is resolved. Here is what typically happens:

If the seller pays off the PACE balance at closing: The title company collects the payoff from seller proceeds, the lien is released, and your FHA or conventional mortgage can proceed normally.

If the seller cannot pay it off: You face a negotiation. You could ask for a price reduction equal to the remaining PACE balance, attempt to take over the lien as a cash buyer, or walk away. Unless you are paying cash, inheriting an unresolved PACE lien on an FHA or conventional purchase is not an option.

If you are paying cash: You can negotiate to assume the PACE obligation. Know that future buyers using traditional financing will face the same hurdle, which affects resale value and your buyer pool down the road.

Is PACE a Good Option for You as a New Homeowner?

Once you own your home, PACE can be a reasonable way to finance improvements — particularly solar panels or hurricane-impact windows — without using your savings. The no-money-down structure and long repayment terms make it accessible.

But go in with clear eyes. Before signing a PACE agreement, compare it to:

• FHA Energy Efficient Mortgage (EEM): Rolls energy improvements into your purchase loan with no separate lien
• Fannie Mae HomeStyle Energy: Similar roll-in financing available with conventional loans
• Utility rebates: TECO (Tampa Electric) and Duke Energy offer rebates for qualifying HVAC and efficiency upgrades
• Federal tax credits: The Inflation Reduction Act provides tax credits for solar, heat pumps, and other qualifying improvements

If you proceed with PACE, understand that when you sell, the lien issue will reappear for your buyers. Buyers using FHA, VA, or conventional financing will likely require you to pay off the remaining balance at closing — just like the seller you bought from had to do.

The Bottom Line

PACE assessments are not a reason to skip a home you love, but they are a reason to look carefully before you commit. A good buyer's agent will catch a PACE lien during due diligence, negotiate a seller payoff, and make sure you reach closing without a surprise that wipes out weeks of work.

Barrett Henry, REALTOR® with REMAX Collective, brings 23+ years of real estate experience to every Tampa Bay transaction. He knows where these liens appear, how to handle the negotiations, and how to protect your interests from offer to close. Call (813) 733-7907 or visit FirstTimeHomeBuyerTB.com to get started today.