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Property Evaluation Flashcards

7 cards from real CPACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Property Evaluation flashcards as text

  1. Which scenario would most likely REDUCE the eligible CPACE financing amount after property evaluation?

    Answer: Discovery of asbestos-containing materials requiring abatement before installation

    Hazardous material abatement increases project costs but may not be CPACE-eligible, reducing the portion of the project that qualifies for financing.

  2. In evaluating a multi-tenant commercial property for CPACE, what key lease provision must the evaluator review?

    Answer: Triple net (NNN) lease clauses that determine who pays utility and tax costs

    NNN leases pass property tax costs (including CPACE assessments) to tenants, so understanding lease structure is essential to assess repayment feasibility and tenant relations.

  3. What is the purpose of a 'desktop appraisal' versus a 'full appraisal' in CPACE property evaluation?

    Answer: A desktop appraisal uses existing data without a site visit and is faster but less thorough

    A desktop appraisal relies on existing records and comparables without an interior inspection, making it quicker but generally less reliable than a full MAI appraisal.

  4. When a CPACE project includes a battery energy storage system (BESS), how is the resiliency benefit typically quantified in the property evaluation?

    Answer: By estimating avoided downtime costs and backup power duration in outage scenarios

    BESS resiliency benefits are quantified by estimating the economic value of avoided business interruptions and the hours of backup power the system can provide.

  5. A CPACE evaluator reviews a building with a 'green lease' provision. Why is this relevant to the evaluation?

    Answer: Green leases may align landlord and tenant incentives, improving the viability of energy savings projections

    Green leases share energy cost savings between landlord and tenant, reducing the split-incentive problem and making projected savings more credible in the evaluation.

  6. Which element is NOT typically included in a CPACE Project Completion Certificate?

    Answer: Owner's personal income verification

    CPACE is property-secured, not personally underwritten, so the owner's personal income is not verified in the Project Completion Certificate.

  7. How does seismic retrofitting factor into CPACE property evaluation in eligible jurisdictions?

    Answer: It can be eligible as a resiliency improvement, and its value is quantified through reduced expected annual loss (EAL)

    In states like California, seismic retrofitting qualifies as a resiliency improvement under CPACE, with economic benefit quantified using Expected Annual Loss reduction methodologies.