Last updated: June 7, 2026
A salesperson may be telling you that a new roof, solar panels, windows, or an air conditioner will cost nothing today. The part that matters most may be buried in the paperwork: the bill could be added to your property taxes for years.
Do not sign at the door, on a tablet, or during a rushed phone call. A PACE loan or solar loan can be a real form of financing, but it is not a grant. It can raise your tax bill, affect your mortgage escrow, and make a sale or refinance harder.
Quick answer: what to do before agreeing
- Ask what kind of financing it is. Is it PACE, a solar loan, a lease, a power purchase agreement, a home equity loan, or an insurance claim?
- Ask for the total cost in writing. Get the cash price, financed price, interest rate, fees, repayment term, and first-year payment.
- Call your mortgage servicer. Ask how the new tax assessment or loan could affect escrow, refinance, and payoff.
- Call a housing counselor. HUD says you can find a HUD counselor by calling 800-569-4287.
- Check for local help first. Call 211, your county housing department, your utility, and a Community Action Agency before taking on a lien or long loan.
- Get more than one estimate. For roof, HVAC, window, electrical, and solar work, compare the scope of work, not just the monthly payment.
PACE can be useful for some homeowners who understand the cost, can afford the tax increase, and plan around resale. It can be dangerous when it is sold as “free,” when the owner is on a fixed income, when property taxes are already hard to pay, or when the project was not needed.
What a PACE loan is
PACE stands for Property Assessed Clean Energy. The CFPB PACE guide explains that PACE financing is paid back through your property taxes. That is the key point. It may look like a home improvement program, but it is a financing contract.
PACE programs are not available everywhere. They depend on state law and local approval. Some places allow residential PACE. Some allow only commercial PACE. Some counties or cities opt in, and others do not. In California, the California PACE guide warns that PACE lets homeowners finance certain improvements through property taxes, but it can involve risks. In Florida, the Florida PACE FAQ says local county rules affect whether the program can be offered.
PACE is often used for work tied to energy, water, safety, or storm hardening. Depending on state and local rules, examples may include solar panels, roofs, windows, doors, HVAC systems, insulation, water-saving improvements, or hurricane protection. The exact list is local. A contractor’s statement is not enough. Ask the official PACE administrator or local government office what is allowed.
Why property tax repayment matters
A normal loan may have a monthly bill from a bank or finance company. PACE is different. The charge is added to your property tax bill as an assessment. If your mortgage company collects tax escrow, your mortgage payment may rise when the escrow account adjusts. If you pay taxes yourself, you must save enough for the higher tax bill.
The CFPB says PACE loans have fees and interest and may run for five, 10, or 20 years. It also warns that a large tax increase can put some homeowners at risk of losing the home through a tax sale if payments are not made. The FHFA statement also notes concerns about PACE or PACE-like programs with priority liens and Fannie Mae and Freddie Mac loans.
| Offer you hear | What it may really mean | What to ask before signing |
|---|---|---|
| “No money down” | You may still be borrowing the full cost, plus fees and interest. | What is the total financed amount and APR? |
| “Paid through taxes” | The payment may appear on your property tax bill or escrow. | How much will my annual tax bill rise? |
| “The roof is free” | It may be an insurance claim, PACE financing, or a misleading sales pitch. | Who pays, and where is that written? |
| “Solar pays for itself” | Savings depend on system size, shade, rates, usage, utility rules, and loan cost. | Show the assumptions in writing. |
| “Sign today” | Pressure is a warning sign. | Can I take this to a counselor first? |
Why “free solar” and “free roof” offers are risky
The Federal Trade Commission warns that “free” or “no cost” solar panel offers can be scams and that the federal government does not install solar systems in homes for free. See the FTC’s solar scams warning before you accept a door-to-door offer.
A solar offer may still have value. But the numbers have to be real. The Department of Energy’s solar guide says solar savings depend on your electricity use, system size, whether you buy or lease, how much sun your roof gets, and utility rates. A salesperson cannot know your true savings from a quick visit.
The CFPB’s solar financing report warned that some solar loans have hidden markups, confusing tax credit assumptions, and payment changes if a homeowner does not make a large prepayment. That matters even more for lower-income homeowners, retirees, and anyone who does not owe enough federal income tax to use a credit.
Solar tax credit warning for 2026
Many older sales materials still talk about a 30% federal residential solar tax credit. Check the current IRS credit page before relying on that claim. As of this guide’s last update, the IRS says the Residential Clean Energy Credit equals 30% for qualified property installed from 2022 through December 31, 2025, and is not available for property placed in service after December 31, 2025. The credit is nonrefundable, so it cannot be more than the federal tax you owe.
Be careful with any contract that subtracts a tax credit from your “net cost.” A tax credit is not a rebate check at signing. It depends on tax law, your tax situation, when the project is placed in service, and whether the property qualifies. A salesperson should not promise your tax result.
Roof offers and insurance claims
A “free roof” offer may involve a contractor trying to file an insurance claim, waive your deductible, or finance the roof through PACE. Those are different paths. Do not let a contractor control the whole process.
The National Association of Insurance Commissioners gives contractor scam tips, including checking licenses, proof of liability insurance, and workers’ compensation. Some states have specific rules about roof deductibles and contractor conduct. For example, the Texas Department of Insurance says it is illegal in Texas for roofers or contractors to waive or rebate a deductible. Your state may use different wording, so check your state insurance department.
If your roof is leaking now, stop the water safely, document the damage, and read our guide to a leaking roof. If storm damage is involved, our guide to insurance claims explains how estimates, adjusters, and documentation fit together.
What to check before you sign a PACE, solar, or roof contract
You do not have to understand every legal word before you make the first call. You do need to slow the process down and get the basic numbers.
- Get the cash price. Ask what the job costs if you pay without financing.
- Get the financed price. Ask for all fees, interest, points, administrative fees, recording fees, and closing costs.
- Get the repayment term. Ask how many years the charge lasts and when the first payment appears.
- Ask about escrow. If your mortgage includes tax escrow, ask how the assessment may change the monthly payment.
- Ask about selling. Will the balance have to be paid off before sale or refinance?
- Ask who owns the system. For solar, find out if you own the panels, lease them, or buy power through a power purchase agreement.
- Ask about cancellation. Get cancellation rights and deadlines in writing before signing.
- Verify the contractor. Check license, insurance, complaints, permits, and whether subcontractors will be used.
For contractor checks, see our guides to contractor permits and how to compare estimates. A PACE approval does not mean the contractor is the best choice, the price is fair, or the repair is urgent.
Documents to ask for
- The full PACE financing agreement, not only a summary.
- The total assessment amount.
- The annual property tax charge for each year.
- The interest rate, APR, fees, and total of payments.
- The cash price and financed price.
- The contractor’s license number and insurance certificate.
- The scope of work, materials, model numbers, warranties, and permit plan.
- For solar, the expected system size, production estimate, utility interconnection rules, lease or ownership terms, and maintenance terms.
- For roofs, photos, inspection notes, insurance estimate, and any deductible statement.
When PACE may be a poor fit
- You are already behind on property taxes, mortgage payments, or utility bills.
- You do not understand when the first tax payment is due.
- Your escrow payment is already hard to afford.
- You plan to sell or refinance soon.
- The contractor says the work is free but will not put the full cost in writing.
- You were told not to call your mortgage company, tax office, family, or counselor.
- You are signing for someone else who does not understand the contract.
When it may be worth a second look
- The repair is needed and you have compared other options.
- You can afford the higher annual tax bill even if utility savings are lower than expected.
- Your mortgage servicer confirms the escrow impact in writing.
- You have a written payoff rule for sale or refinance.
- A housing counselor, legal aid attorney, or trusted advisor has reviewed the papers with you.
Phone scripts that can help
Call a HUD-approved housing counselor: “I am being offered PACE financing or a solar loan for home repairs. The payment may be added to my property taxes. Can you help me review the tax bill impact, escrow impact, and safer options before I sign?”
Call your mortgage servicer: “I am considering a property tax assessment for home improvements. If I sign, how would it affect my escrow payment, refinance options, and payoff if I sell? Can you send the answer in writing?”
Call the local tax office or PACE administrator: “Is residential PACE active for my address? What will the yearly assessment be, when will it first appear, and what happens if I fall behind?”
Call the contractor: “Please send the cash price, financed price, scope of work, permit plan, warranty, license number, and proof of insurance. I will not sign until I compare this with at least one other estimate.”
Safer options to check before PACE
PACE is only one path. It is usually not the first place to start if you are low-income, disabled, older, disaster-affected, or already behind on housing costs. Some programs have long waits or narrow rules, but they may reduce how much you need to borrow.
| Option | Best for | Where to start | Limits to expect |
|---|---|---|---|
| Weatherization | Insulation, air sealing, energy checks, and some health or safety energy work | Weatherization Assistance | Local waitlists; not full remodeling |
| LIHEAP | Heating, cooling, energy crisis, and sometimes minor energy-related repairs | LIHEAP | State rules and seasonal funding |
| USDA Section 504 | Very-low-income rural homeowners; grants are limited to older homeowners for health and safety hazards | USDA repair program | Rural eligibility, income limits, and funds vary |
| HUD counseling | Understanding mortgage, tax, foreclosure, refinance, and affordability issues | HUD counselor | Counselors advise; they do not guarantee funds |
| Local housing rehab | Code, safety, accessibility, roof, plumbing, electrical, or emergency repairs | City or county housing department | Income limits, liens, inspections, and waitlists |
| Utility programs | Energy audits, rebates, HVAC tuneups, appliance help, or bill savings | Your electric or gas utility | Rules change by utility and service area |
| Legal aid | Misleading contracts, tax sale risk, foreclosure risk, or contractor fraud | legal aid | Income rules and case priorities |
For energy work, our weatherization guide explains the local intake process. If the repair cannot wait, our urgent repairs guide explains what to do while slower programs review your application.
How local and state administration changes the answer
PACE is local by design. A neighbor in one county may have a program while you do not. A contractor may be approved for one program but not another. Some states require specific disclosures, calls, license rules, or administrator oversight. Some states have consumer complaint forms for PACE. Some local governments do not allow residential PACE at all.
Because of these differences, do not rely on a national advertisement. Confirm the offer with the official program administrator, county tax collector or treasurer, city or county housing department, and your mortgage servicer.
Ask this exact question: “Is this a voluntary tax assessment that becomes a lien on my property?” If the answer is yes, treat it as a serious housing decision, not a quick home repair purchase.
If you already signed and feel trapped
Act quickly. Your options may depend on state law, the contract, and how much time has passed. Do not ignore tax bills, escrow notices, contractor calls, or letters from the PACE administrator.
- Find every document. Save the contract, financing agreement, tax assessment notice, work order, texts, emails, flyers, and photos.
- Write a timeline. Include who came to your home, what was promised, when you signed, and whether the work was done.
- Check cancellation rights. Some contracts have short cancellation windows. Do not wait.
- Call the PACE administrator. Ask for the dispute process, payoff amount, assessment schedule, and complaint contact.
- Call your mortgage servicer. Ask whether your escrow will rise and whether the assessment creates any default risk.
- Contact legal aid. This is especially important if you are older, disabled, limited-English, facing foreclosure, or believe you were misled.
- File complaints if needed. You can report fraud to ReportFraud. For a financing issue, you can submit a CFPB complaint.
If work has not started, say in writing that you dispute the contract and do not authorize work until the dispute is resolved. If work has started and it is unsafe or incomplete, document conditions with photos and contact your local building department about permits and inspections.
Common mistakes that cause trouble later
- Only looking at the monthly number. PACE may hit through taxes, not a normal monthly loan bill.
- Trusting a tax credit promise. Tax credits depend on current law and your tax situation.
- Skipping the mortgage servicer. Escrow changes can surprise homeowners months later.
- Believing “approved” means affordable. Approval does not prove the repair is necessary or the price is fair.
- Signing for someone else. A caregiver or adult child should not sign documents the owner does not understand.
- Letting a contractor handle insurance alone. You, not the contractor, are responsible for your policy duties and deductible.
- Ignoring sale or refinance issues. A buyer, lender, or title company may require payoff or special handling.
How to compare a PACE offer with a regular loan
Ask each lender or program for the same numbers. Then compare the full cost, not just the payment.
| Question | PACE | Regular loan | Why it matters |
|---|---|---|---|
| How is it paid? | Usually through property taxes | Usually monthly to lender | Tax bills and escrow can change |
| Is there a lien? | Often tied to a property tax assessment | Depends on loan type | Lien priority can affect mortgage issues |
| What is the term? | May last many years | Varies | Longer terms can lower payments but raise total cost |
| Can I sell? | May need payoff or buyer/lender approval | Depends on loan | Resale can be harder than expected |
| Can I dispute work? | May be complicated after assessment | Depends on contract and lender | Bad work can leave you owing anyway |
Special cautions for seniors and caregivers
Older homeowners are often targeted because they may have home equity, need urgent repairs, and want lower energy bills. A fixed income makes a higher tax bill more dangerous. Adult children, caregivers, and trusted relatives should not take over the decision, but they can help slow it down.
If the owner is confused, pressured, or unable to read the contract, stop the process. Call a HUD counselor, legal aid, or Adult Protective Services if you suspect financial exploitation. Our guide to senior scams explains other warning signs.
Questions to ask a solar company
- Do I own the panels, lease them, or buy power from you?
- What happens if I sell the home?
- Who gets any tax credit or incentive?
- What happens if the system produces less power than promised?
- Will I still have a utility bill?
- Who repairs roof leaks caused by installation?
- Does my roof need replacement before panels go on?
- What are the exact payment changes over the full term?
Questions to ask a roofing contractor
- Are you licensed for roofing in this state or locality?
- Will you pull the permit?
- What materials and underlayment are included?
- What decking repairs are included or excluded?
- What is the warranty for labor and materials?
- Are you asking me to sign over insurance benefits?
- Are you promising to waive, rebate, or cover my deductible?
- What happens if insurance pays less than expected?
What to do if you are denied, delayed, or overwhelmed
If a safer program denies you, ask why in writing. You may need proof of income, ownership, occupancy, insurance status, utility bills, tax bills, or repair estimates. If a city, county, utility, or nonprofit is out of funds, ask when the list opens again and whether emergency cases are referred elsewhere.
If you are already facing a tax sale, foreclosure, shutoff, or unsafe condition, tell every intake worker that it is urgent. Use clear words: “tax sale,” “foreclosure notice,” “no heat,” “active leak,” “unsafe electrical,” “no working toilet,” or “medical equipment needs power.” Do not describe a dangerous repair as a general home improvement.
Keep a contact log with names, dates, phone numbers, and next steps. If you cannot get through, call 211 and ask for housing stabilization, utility assistance, legal aid, and emergency home repair referrals.
FAQs about PACE loans and free solar or roof offers
Is a PACE loan free?
No. PACE is financing. It may require no money down, but the amount financed, interest, and fees are usually repaid through your property tax bill.
Can a PACE loan make my mortgage payment go up?
Yes, it can. If your mortgage payment includes escrow for property taxes, your servicer may raise your monthly payment when the tax bill increases.
Are free solar panels from the government real?
Be very careful. The FTC says “free” or “no cost” solar panel offers can be scams and that the federal government does not install solar systems in homes for free.
Can I use the federal solar tax credit in 2026?
Check the current IRS page before relying on any offer. As of this guide’s last update, the IRS says the Residential Clean Energy Credit is not available for property placed in service after December 31, 2025.
Can a contractor waive my roof deductible?
Some states prohibit deductible waivers or rebates, and insurance companies may require proof that you paid your deductible. Check your state insurance department before agreeing to any “free roof” insurance offer.
Who should review a PACE contract before I sign?
Start with a HUD-approved housing counselor, your mortgage servicer, the local tax office or PACE administrator, and legal aid if you feel pressured or confused.
About This Guide
HomeRepairGrants.org created this guide to help homeowners slow down, understand PACE financing, and compare safer repair options before signing a contract. This guide uses official federal, state, local, and high-trust nonprofit/community sources mentioned in the article, including CFPB, FTC, IRS, DOE, HUD, USDA, ACF, 211, state PACE and insurance resources, and legal aid sources.
Next review: August 17, 2026
HomeRepairGrants.org is not a government agency, does not guarantee eligibility, and is not legal, financial, tax, medical, insurance, disability-rights, or government-agency advice.
Corrections: Email info@homerepairgrants.org with corrections.