Missouri Clean Energy District

Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA’s concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation for more information about PACE financing, and for a comprehensive list of all PACE programs across the country.

The Missouri Clean Energy District offers a wide variety of project financing programs with forms and structures designed to address a range of market needs. But its’ premier financing mechanism is the eponymous PACE program:

Property Assessed Clean Energy – PACE – is a financing tool that allows property owners to borrow money for renewable energy and energy efficiency property improvements with no upfront cost.

Membership

Any county, city, or incorporated town or village in Missouri may join MCED at no membership cost, allowing residents to benefit from PACE financing without requiring the local government to take on additional work load, budget impact, or liability. The Board provides the necessary administrative functions so that communities have access to funding while avoiding the burden of running another new program. A unique feature among PACE program providers nationally, MCED members have the PACE program design, administration, marketing, and financing administration provided at no cost.

MCED has engaged municipal counsel to produce specimen ordinances for the use—at no cost—of cities, towns, and counties wishing to join as a member of MCED. Current members can be found here.

Administration

The MCED operates as a political subdivision, with District Board members elected by member municipalities annually. To ensure local representation, each member municipality of the District designates an advisory board member. The Missouri Clean Energy Funding, LLC was selected as Missouri’s first PACE administrator.

Eligible Projects and Terms

Applications for qualifying commercial, industrial, agricultural, multi-family, not-for-profit, and public facility properties will be accepted for energy efficiency and renewable energy projects proposing any acquisition, installation, or modification on public or private property designed to reduce the energy consumption of the property. Nearly any project which can show an energy saving with a reasonable payback qualifies.

Property owners repay PACE financing over a period up to 20 years through additional payments on their property tax bills.