FAQs

Q: What are the program guidelines?

A: The program guidelines set forth the Last Best PACE requirements and processes for which property owners seeking to complete a project may receive information to utilize financing. The program guidelines are subject to approval by the Montana Facility Finance Authority Board. You may download a copy of the C-PACE program guidelines.  

Q: What property types are eligible for financing?

A: Any property located in an approved C-PACE District that is utilized for general commercial purposes such as retail, industrial, office, nonprofit, agricultural and hospitality uses as well as certain multifamily properties with five or more dwelling units.

Q: What are eligible projects?

A: Eligible projects are available for renovations, expansions and new construction projects, including those that have been completed in the prior 36 months. Financing may be used to pay for energy conservation projects; the installation or modification of an energy conservation measure; or the acquisition, installation or improvement of a renewable energy system; or public safety and resiliency improvements.

• An energy conservation measure is a permanent, cost-effective improvement fixed to real property, including new construction, and intended to decrease energy or water consumption and demand, including a product, device or interacting group of products or devices on the customer's side of the meter that use energy technology to generate electricity, provide thermal energy or regulate temperature.
• A renewable energy system is a fixture, produce, device or interacting group of fixtures, products or devices on the customer's side of the meter that uses one or more forms of renewable energy to generate electricity or to reduce the use of nonrenewable energy. The term includes a biomass stove but does not include an incinerator or a digester.
• Public safety and resiliency improvements means one or more fixed installations or modifications to eligible commercial real property that are designed to improve a property's public safety or resiliency by improving the eligible real property's structural integrity for seismic events; indoor air quality; durability to resist wind, fire, and flooding; ability to withstand an electric power outage; stormwater control measures, including structural and nonstructural measures to mitigate stormwater runoff; and firearm storage infrastructure for use by the public pursuant to a firearm hold agreement as provided in 27-1-748, MCA.
• Products or devices that are not permanently fixed to real property are not eligible for financing.

Examples of eligible improvements can be found in the program guidelines.

Q: Can projects qualify for utility rebates, tax incentives and other funding programs?

A: Yes, projects can qualify and receive additional rebates and incentives including grants, tax credits and rebates from utility providers. Property owners are encouraged to obtain all applicable government, utility provider or manufacturer rebates and other upfront cost reductions to reduce the total project cost.

Q: Requirements for Last Best PACE financing

A: All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property for the project to proceed with a C-PACE financing. A copy of the lender consent template is available to download.

The property owner must submit an energy assessment, renewable energy feasibility study, or public safety or resiliency documentation for the project that evaluates the proposed improvements the owner is seeking to finance and is consistent with the requirement set forth in the program guidelines.

Q: When is mortgage lender consent required?

A: All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property for the project to proceed with a C-PACE financing. A copy of the lender consent template is available to download.

Q: What is the maximum loan term for financing?

A: The financing term cannot exceed the expected life of the proposed improvements as described in the energy assessment, renewable energy feasibility study, or public safety or resiliency documentation. For projects that include multiple improvements, the weighted average useful life of the improvements must equal or exceed the term of the financing. Depending on the equipment installed, terms are often made for 20+ years.

Q: Which project costs can be included in financing?

A: The following costs may be rolled into the financing:

• Energy assessments/renewable energy feasibility studies/resiliency documentation
• Equipment costs
• Installation costs
• Operation and maintenance costs
• Feasibility costs
• Recording fees
• Energy evaluations
• Design, drafting, engineering and labor costs
• Permit fees
• Inspection charges
• Appraisal costs

Q: What fees does Last Best PACE charge?

A: Origination Fee

The origination fee is paid to the Last Best PACE Program at or prior to the financing closing date. This fee represents an up-front administration fee that equals one and one quarter percent (1.25%) of the financing amount. The minimum origination fee shall be $1,000, with no maximum fee amount. The origination fee may be capitalized into the financing amount for the project.

Administrative Fee

For each current project, an administrative fee of one percent (1.0%) of the annual payment, up to an annual maximum of $3,000, will be charged each year until the assessment is paid in full. This will be calculated and included in the project amortization schedule. Upon receipt of the funds from the local government, the Last Best PACE Program will deduct the fee prior to remitting the loan payment to the lender.

The origination and administrative fees outlined above do not include any specialized professional services that may be necessary should the circumstances of any project require them. For example, and without limitation, should any participant in a project submit substantive comments to the Last Best PACE Program documentation, request a legal opinion from program counsel or require other time and resource intensive review of a transaction, the record owner shall be responsible for covering such Last Best PACE Program expenses at cost. Prior to a financing closing, evidence that such expenses will be paid before the closing is required. These specialized professional services expenses may be paid out of the proceeds of the financing.

Q: Can financing be used for new construction projects?

A: Financing is available for the construction of new buildings as well as the substantial (gut) renovation OR adaptive reuse of vacant buildings. New construction projects, unlike existing-building retrofits, do not benefit from a history of pre-improvement energy consumption data from which baseline energy consumption can be formulated. Without the benefit of this baseline building performance data, additional energy assessment requirements are necessary.

Q: Can I use financing for projects that have already been completed?

A: Yes, property owners with retroactive projects may apply to Last Best PACE to be approved for financing. Retroactive projects are subject to the following additional requirements:

• All such retroactive financings must occur within 36 months of the time elapsed between the later of the completion of the installation or the certificate of occupancy for the eligible property and application of the financing, unless otherwise approved by the authority.
• For any such retroactive project, the term of the financing will be reduced to account for any of the eligible improvement's useful life that has elapsed between the time of installation and the close of a financing. For example, if a financing is funded one year after the later of either the installation of the energy conservation measure(s) or certificate of occupancy, the eligible term of the financing will be reduced by one year.

Q: Do I need to register or qualify with Last Best PACE to be a contractor for C-PACE projects?

A: The requirements set forth in the Last Best PACE Program Guidelines require contractors and project developers to register. Contractor registration is a brief process.

Q: Can C-PACE projects qualify for utility rebates, tax incentives and other funding programs?

A: Yes, C-PACE projects can qualify and receive additional rebates and incentives from utility providers and other sources. C-PACE borrowers are encouraged to obtain all applicable government, utility provider or manufacturer rebates, and other upfront cost reductions to reduce the total project cost.

Q: Requirements for Last Best PACE Financings

A: All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property for the project to proceed with a C-PACE financing. A copy of the lender consent template is available to download.

The property owner must submit an energy assessment, renewable energy feasibility study, or public safety or resiliency documentation for the project that evaluates the proposed improvements the owner is seeking to finance and is consistent with the requirement set forth in the program guidelines.

Q: Is mortgage lender consent required?

A: All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property for the project to proceed with a C-PACE financing. A copy of the lender consent template is available to download.

Q: How is the interest rate established for a C-PACE financing?

A: Lenders may charge a market interest rate on C-PACE financings, plus applicable fees. The C-PACE lender must disclose this interest rate in its financing proposal made to the property owner.

Q: What is the maximum loan term for a C-PACE financing?

A: The C-PACE financing term cannot exceed the expected life of the proposed improvements as described in the energy assessment, renewable energy feasibility study, or public safety or resiliency documentation. For projects that include multiple improvements, the weighted average useful life of the new equipment must equal or exceed the term of the C-PACE financing. Depending on the equipment installed, terms can be for 20+ years.

Q: How is the C-PACE loan repaid?

A: The property owner pays the assessment to their county as part of their property taxes. The county then routes the payment to Last Best PACE, which then pays the lender.

Q: What happens if the C-PACE payment is delinquent?

A: The C-PACE statute establishes that a C-PACE assessment is a lien on the property, with the same priority and status as other property tax and assessment liens. Upon a default, the local government and the C-PACE lender would certify the amount of the delinquency to the Last Best PACE Program, which would then work with the appropriate local government to place the amount of the C-PACE financing delinquency on the next available tax roll for collection pursuant to the existing statutory tax collection procedures.

Q: What occurs once a C-PACE financing has been paid in full?

A: In compliance with the terms of the C-PACE financing agreement, upon full repayment, the Last Best PACE Program will file a record of termination for the C-PACE tax assessment with the local government.

Q: What is the legal authority for C-PACE in Montana?

A: C-PACE financings are authorized in the State of Montana pursuant to MCA 90-4-13 (the “C-PACE statute”). The C-PACE statute enables cities and counties to impose an assessment on real property to secure loans made for energy efficiency, water conservation, renewable energy improvements, and public safety and resiliency improvements.

Q: How do local governments establish a C-PACE district?

A: Under MCA 90-4-1306, to create a C-PACE district, a local government must:

• Adopt a resolution of intent;
• Hold a public hearing at which the public may comment on the proposed program and the program plan; and
• Adopt a resolution establishing a C-PACE Program and setting the terms and conditions of the program.

Q: How does the C-PACE resolution work?

A: Local governments adopt the resolution as noted above to authorize C-PACE projects in their area. The resolution authorizes the county to impose a C-PACE tax assessment, collect payments for the tax assessment in installments, place those installments on the tax roll and delegate that authority to the MFFA.

Q: Which property owner(s) pay the C-PACE assessment?

A: Property owner participation in Last Best PACE is 100% voluntary. No property owner is obligated to take any action. Only those property owners who choose to use C-PACE financing to improve their property pay the tax assessment.

Q: What costs do local governments incur to offer Last Best PACE in their communities?

A: Last Best PACE requires no credit exposure, dedication of general funds or allocation from constricted budgets for local governments to implement C-PACE. To help promote no-cost, efficient implementation, local governments can choose to charge fees as part of a financing.

Q: Who is the C-PACE lender?

A: C-PACE loans are provided by third-party private lenders such as banks, credit unions and national C-PACE capital providers. C-PACE financings do not use funds from local governments to finance projects.

Q: Is the local government responsible for the assessment with the C-PACE lender?

A: No. C-PACE lenders recognize that neither the Last Best PACE Program nor local governments have an obligation to settle or reimburse C-PACE tax assessments to C-PACE lenders.