C-PACE FAQs

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 of directors. You may download a copy of our C-PACE program guidelines.  

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

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.

• 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.
• Products or devices that are not permanently fixed to real property are not eligible for financing.

Types of equipment that may qualify as part of an energy conservation project include, but are not limited to:

• High efficiency heating, ventilating and air conditioning systems
• High efficiency chillers, boilers, and furnaces
• High efficiency water heating systems
• Energy management systems and controls
• Distributed generation systems
• High efficiency lighting system upgrades
• Building enclosure and envelope improvements
• Water conservation and wastewater recovery and reuse systems
• Combustion and burner upgrades
• Heat recovery and steam traps
• Water management systems and controls (indoor and outdoor)
• High efficiency irrigation equipment
• Solar energy systems

More information is available on the Project Eligibility page. 

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 for purposes of calculating the amount of the C-PACE financing.

The property owner must submit an energy assessment or renewable energy feasibility study 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. The project must be shown to be cost-effective in that the estimated monetary savings of the project will be equal to or greater than the cost of the project over the life of the improvement(s).

All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property prior to the closing of the project financing. The lender consent template for property owners is available for download.

The financing term cannot exceed the expected life of the proposed improvements as described in the energy assessment. 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.

The following costs may be rolled into the financing:

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

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.

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.

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 energy conservation measure’s 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.

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

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 for purposes of calculating the amount of the C-PACE loan.

Applicants must submit an energy assessment or renewable energy feasibility study for the C-PACE project that evaluates the proposed improvements to be financed and is consistent with the requirements set forth in the program guidelines. The C-PACE project must be shown to be cost-effective in that the estimated monetary savings of the project will be equal to or greater than the cost of the project over the life of the improvement(s).

All property owners must provide the written consent of the existing mortgage lender or other real property lienholder of record on the eligible property prior to the closing of the C-PACE financing. The lender consent template that property owners need to complete is available in the program guidelines. 

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.

The C-PACE financing term cannot exceed the expected life of the proposed improvements as described in the energy assessment. 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.

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.

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.

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.

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 and renewable energy improvements.

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.

Local governments adopt the authorizing 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.

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.

Last Best PACE requires no credit exposure, nor 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.

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.

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.