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Renovate America HERO Loan Program

Renovate America is the largest lender in Property Assessed Clean Energy, or “PACE” loan program; its loans are marketed to consumers as “HERO financing.”  Lenders in the PACE program team up with local governments to make loans to consumers to purchase solar panels and other energy-efficient appliances.   The three states with active residential PACE programs are California, Florida and Missouri.  Common purchases made with HERO financing, or PACE loans, include:

  • Heating and Cooling (HVAC) systems
  • Windows and doors
  • Roofing
  • Solar panels
  • Landscaping

When homeowners obtain PACE loans, a new assessment, or fee, is added to their property and they pay the assessment when they pay property taxes.  So instead of making a monthly payment, they re-pay the PACE loan with their property tax bill, which is higher because of the added assessment.

Complaints, Problems, Government Investigations into Renovate America HERO Loans

According to the Los Angeles Times and Wall Street Journal, consumers report that contractors who pitch the HERO loans and sign up consumers do not always disclose the loan terms, or misrepresent how the loans are paid back.  There are also concerns, according to these media reports, that those contractors who are selling the loans fail to explain that they are secured by a property lien, which can have a negative impact on a consumer’s ability to obtain a home mortgage or sell the home.  Additionally, consumers don’t understand or aren’t told that if the loan goes unpaid, it can result in home foreclosure.

According to the Los Angeles Times, because these loans are marketed and sold with a swift approval process and minimal underwriting, consumers are often approved on the spot and asked to sign documents on tablet computers, which can be confusing for many, especially elderly homeowners.

In addition to consumer complaints, media reports state that numerous governmental investigations are underway by several regulators involving these loans.  Specifically:

  • The California Contractors State License Board is reportedly investigating 50 cases in which consumers alleged solar contractors misrepresented PACE financing, according to the Los Angeles Times. Those making the complaints are often elderly or don’t speak fluent English.
  • FBI agents are currently seeking documents that show how Renovate America marketed its financing to homeowners, trained its sales force and outside contractors, and communicated with investors, according to a report by the Wall Street Journal.
  • The Wall Street Journal has also reported that an SEC investigation is questioning loan payments Renovate America made for some borrowers who were struggling with their debt.

 

Have a Renovate America HERO Loan?

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