Bill to Create Protections for Residential PACE Loans

COLUMBUS – State Representative Al Cutrona (R-Canfield) recently introduced House Bill 646 which has been referred to the Ohio House Civil Justice Committee.   

Residential Property Assessed Clean Energy (R-PACE) loans are used to fund energy-efficient home improvement projects by adding the loans onto the borrower’s property tax bill. Subsequently, the loans are paid through tax installments, which are added to a borrower’s escrow payments if they have a mortgage. 

“R-PACE loans can lead to homeowners at risk of losing their homes to foreclosure due to the increases that will be incurred on their mortgage payments. It is clear that the risks associated in many of these loans do not justify the oftentimes needless energy-saving improvements they are used for. We hope to protect Ohio property owners from being unable to make increased property tax payments, or even lose their homes.” said Cutrona.

Currently, the laws governing R-PACE loans throughout the United States are uneven thus leading to congress encouraging the Consumer Financial Protection Bureau to implement rules on R-PACE. 

Given this direction from congress, it would not be wise of any municipality to entertain adopting R-PACE programs without further rules being created, vetted, and tested, added Cutrona. “R-PACE loans are in need of serious regulation, and their negative consequences to be understood by Ohio consumers, especially by middle and middle-lower class homeowners.”  

House Bill 646 will create numerous rules and regulations regarding R-PACE loans to ensure Ohio Homeowners have protections in place, should they choose to accept such loans. 

The bill has been referred to the Ohio House Civil Justice Committee and will likely be heard over the coming weeks.