Typical Interest Rates and Terms for C-PACE Financing
C-PACE financing typically offers long-term fixed rates, which can vary based on the term of the loan. Here are the typical interest rates and terms for C-PACE financing:
Interest Rates:
- Short-term (e.g., 10 years): Interest rates range from 5% to 5.5%.
- Medium-term (e.g., 15 years): Rates are between 5.5% to 6%.
- Long-term (e.g., 20 to 25 years): Rates can range from 6% to about 8%.
- Specifically for 25-year loans: Rates are often priced at approximately 300 to 400 basis points over the yield on 10-year Treasury bonds, which could be around 7% depending on market conditions.
Terms:
- Loan Duration: Typically ranges from 10 to 25 years, often matching the useful life of the financed improvements.
- Repayment: C-PACE financing is repaid through a special assessment on the property’s tax bill. This is tied to the property itself, meaning the debt obligation remains with the property in case of a sale.
- Use of Funds: C-PACE financing is used for energy-efficient upgrades, such as solar panels, HVAC systems, and insulation. It can cover up to 30% of a project’s total cost.
Overall, C-PACE loans offer a stable and long-term financing option for property owners looking to implement energy-efficient improvements without bearing the upfront costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-typical-interest-rates-and-terms-for-c-pace-financing/
