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The Next Evolution of C-PACE: Resiliency, HUD, and the SSBCI

Guest Post by Jessa Coleman, Senior Manager of Programs, PACE Financial Servicing, and Marcus Glomset, Communications and Research Associate, PACE Financial Servicing

A number of key events transpired in the last year that will bolster and expand the MD-PACE program and enable a greater number of projects to be financed with C-PACE than ever before. Chief among these updates is a legislative amendment enables commercial property owners to use C-PACE to finance resiliency, environmental remediation, and air or water quality improvements in addition to the clean energy improvements. Further, the MD-PACE program was approved in 2020 by the U.S. Department of Housing and Urban Development (HUD) under its regulations on consenting to the placement of C-PACE assessments on HUD-insured properties. This allows HUD-insured properties in Maryland to access C-PACE, a groundbreaking utilization that will reduce operation costs and energy burdens for tenants. Finally, the State Small Business Credit Initiative (SSBCI) action in the American Recovery Act of 2021 has earmarked over $400 million of small business funds for the D.C., Maryland, and Virginia region. This is a potential multiplier of the C-PACE effect, either as a source of funds for C-PACE financing or as a source of funds that can be used alongside C-PACE financing for maximum impact.

Introduced to the Maryland legislature in 2021, Senate Bill 0319, sponsored by Senator Hester of Maryland’s ninth district, was passed in a somewhat chaotic and condensed legislative session, as legislatures across the country – in Maryland included – struggled to address a deep bench of needs in the wake of the covid-19 pandemic. The passage of this bill was a clear indicator of the priority that C-PACE can take in rebuilding economies challenged by the pandemic. Thanks to the new legislation, Maryland commercial property owners are able to utilize C-PACE capital to finance remediation projects intended to remove environmental and/or health hazards; measures intended to increase a property’s ability to withstand natural disasters and the effects of climate change; and projects that promote indoor air and water quality. Additionally, the legislation allows property owners to refinance previously completed C-PACE eligible projects. This legislation takes effect October 1st, 2021.

Another expansion of the MD-PACE program allows HUD-insured properties in Maryland to apply for HUD’s consent to the levying of a C-PACE assessment on the property. Most C-PACE programs in the country require that the mortgage holder consent to the levying of a C-PACE assessment on a given property. In some scenarios, particularly low-income multifamily housing, those mortgages are held by federally insured institutions such as Fannie Mae or Freddie Mac. HUD released guidance in 2017 that requires each C-PACE program to apply for HUD approval under HUD Notice: H 2017-01. After a program has been approved, individual properties applying for C-PACE must then also apply to HUD for mortgage holder consent. Maryland’s receipt of HUD’s approval of the MD-PACE program lays the groundwork for HUD-insured properties to apply for C-PACE financing. The advantages are clear: several data-backed studies find that the energy cost burden to low-income households is greater than was formerly thought (Hernández and Bird, 2010; Gold, 2019).

Most recently, the American Rescue Plan (ARP) of 2021 revives the Obama-era State Small Business Credit Initiative. As part of the 2021 ARP, the District of Columbia, Maryland, and Virginia region (DMV) will receive more than $400 million in SSBCI funds (U.S. Department of the Treasury: State Small Business Credit Initiative). These funds are being issued in a similar manner and with comparable metrics used by the 2010 SSBCI allocation that ran between 2010-2017. This development promises to provide some relief to the small businesses of the region and can be compounded by pairing with C-PACE . For example, a manufacturing center using SSBCI funds to invest in technology to improve operations can see if components of the proposed project are C-PACE eligible..

These expansions to C-PACE programs are underway not only in Maryland, but across the country. With the first decade of C-PACE policy behind us, now is the time to think critically about how C-PACE programs can evolve to meet the needs of tomorrow.

If you wish to learn more about the MD-PACE program or want to see if your project is eligible for financing, please visit


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