C-PACE (Commercial Property Assessed Clean Energy) financing can indeed be used for refinancing existing loans, especially in many states. This tool allows property owners to refinance existing debt by using C-PACE proceeds to pay back existing loans on the property. The flexibility of C-PACE in capital stacking makes it valuable for refinancing construction debt or other high-interest loans, often providing more favorable financing terms, such as longer repayment periods (typically 20 to 30 years) and lower interest rates.
Key Points for Using C-PACE for Refinancing:
- Eligibility: C-PACE is available for commercial properties, including office, multifamily, industrial, and more. It does not cover single-family residential properties.
- Retroactive Financing: In many states, C-PACE can be applied retroactively to cover improvements made up to three years prior, allowing property owners to monetize past investments and free up capital.
- Benefits:
- Low-cost financing with non-recourse terms.
- Long-term fixed-rate financing, which can help stabilize cash flows.
- Ability to bridge gaps in the capital stack or replace more expensive debt.
- Banks’ Perspective: C-PACE allows banks to recycle capital by refinancing existing loans, maintaining a healthy lending relationship with clients and balancing their portfolios.
Overall, C-PACE offers a versatile and cost-effective way to refinance existing debt related to energy-efficient and sustainable upgrades for commercial properties.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-c-pace-financing-be-used-for-refinancing-existing-loans/
