CPACE Legal Framework 2

Question 1

Under PACE financing, the special assessment is attached to which entity?

Accepted Answer

The real property itself

Answer

The property owner personally

Answer

The contractor who installed improvements

Answer

The local government entity

Question 2

Which federal law requires lenders to provide loan disclosures and has been debated in the context of PACE residential financing?

Accepted Answer

Truth in Lending Act (TILA)

Answer

Community Reinvestment Act (CRA)

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Bank Secrecy Act (BSA)

Question 3

A property owner defaults on a PACE assessment. In most jurisdictions, the PACE lien is treated with what priority relative to a first mortgage?

Accepted Answer

Senior or superior to the first mortgage

Answer

Junior to the first mortgage

Answer

Equal priority with the first mortgage

Answer

Senior only if the project is solar-related

Question 4

Which California statute is considered the foundational enabling law for commercial C-PACE programs in that state?

Accepted Answer

AB 811 and SB 77 (Improvement Act for Commercial Properties)

Answer

California Environmental Quality Act (CEQA)

Answer

California Mello-Roos Community Facilities Act

Answer

California Environmental Protection Act

Question 5

When a commercial property with a PACE assessment is sold, who is generally responsible for the outstanding PACE obligation?

Accepted Answer

The new property owner assumes the obligation as part of the property

Answer

The original property owner remains personally liable

Answer

The PACE program administrator absorbs the remaining balance

Answer

The local municipality pays off the balance at closing

Question 6

Which government-sponsored enterprise (GSE) policy significantly affected PACE financing by restricting purchase of mortgages on PACE-encumbered properties?

Accepted Answer

Fannie Mae and Freddie Mac conservatorship guidance

Answer

Federal Home Loan Banks policy

Answer

Federal Deposit Insurance Corporation rules

Answer

HUD Mortgagee Letter 2010-34

Question 7

A PACE program operates through a 'contractual assessment district.' What governmental body must typically authorize this district?

Accepted Answer

Local city or county government

Answer

State environmental agency

Answer

Federal Energy Regulatory Commission

Answer

State utility commission