MinnPACE Lowers Equity Barriers for Energy Projects

Demand for PACE financing tends to rise when traditional lenders become more conservative, especially in sectors like senior living, hospitality, and multifamily housing. As banks reduce leverage and require larger equity contributions, PACE becomes an effective tool to fill the resulting gaps in the capital stack. Developers are increasingly using PACE to offset lower loan-to-cost ratios, particularly in construction financing where bank limits have tightened significantly. Clients appreciate that PACE can feel “too good to be true,” offering long-term, low-cost capital without giving up ownership. By reducing required equity and boosting project returns and IRRs, PACE strengthens a project’s financial performance. At the same time, it supports energy-efficient upgrades that improve the long-term value of the property.