The CFPB adopted rules governing residential Property Assessed Clean Energy (PACE) transactions. Per the rule adoption, the CFPB:
- Amended the Truth-in-Lending Act’s (TILA) exclusion of tax assessments and tax liens from the definition of credit (to clarify that voluntary tax assessments and tax liens, such as PACE financing, are not excluded under TILA);
- Stated that PACE financing meets the definition of credit under TILA;
- Prescribed ability-to-repay requirements for residential PACE financing;
- added model Loan Estimate and Closing Disclosure forms for used in PACE transactions; and
- Made other clarifying amendments and exemptions to make clear how other TILA rules apply to PACE financing.
The rule adoption is effective March 1, 2026.
Click to view the CFPB Residential Property Assessed Clean Energy (PACE) Financing Reg Z: https://www.tenaco.com/wp-content/uploads/2024/12/CFPB-Residential-Property-Assessed-Clean-Energy-PACE-Financing-Reg-Z-Final-Rule-12-17-24.pdf
