Selling a House With a PACE Loan on the Tax Bill
2 min read · Last updated 2026-08-05 · Reviewed by Camilo Palacio, Licensed Florida Real Estate Professional (License #3280644, REALTOR®)
A PACE loan doesn't transfer to the buyer automatically just because it's tied to your property tax bill. Most buyers' lenders require the remaining PACE balance paid off in full at or before closing, because PACE assessments typically sit ahead of the mortgage in lien priority. Get the exact payoff number from your PACE program administrator before you price the house.
| Factor | Traditional Route | Cash Flow Deals |
|---|---|---|
| How the PACE balance gets handled | Buyer's lender usually requires the full balance paid off before funding, which can eat into your proceeds or stall the loan | We work the payoff into the offer up front so it's already accounted for before we get to a contract |
| Timeline pressure | Buyers and lenders can be caught off guard by a PACE lien discovered mid-escrow, adding weeks to close | We pull the tax record and confirm the balance before we make an offer, so there's no mid-contract surprise |
| Who has to fix it | The seller is often expected to pay off or negotiate down the balance out of pocket before closing | The payoff comes out of the purchase price at closing through your local broker partner, not your bank account |
What a PACE loan actually is
PACE stands for Property Assessed Clean Energy. It's financing for solar panels, new windows, HVAC upgrades, or other energy work, and instead of a normal loan payment, the balance gets added to your property tax bill and paid off over years. The loan isn't attached to you personally. It's attached to the property itself, which is exactly why it becomes a closing issue when you go to sell.
Why it holds up your sale
Because a PACE assessment usually takes lien priority ahead of a mortgage, most conventional lenders won't approve a loan for a buyer until that balance is paid off or resolved. Fannie Mae and Freddie Mac have guidance addressing exactly this, and after a 2010 statement from their regulator, they generally will not purchase a mortgage secured by a property that still carries a first-lien PACE obligation. That means your buyer's financing can stall out until the PACE balance is handled.
Getting the real payoff number
Call your PACE program administrator, not just the tax collector, and ask for a written payoff quote good through your expected closing date. The number on your annual tax bill is just the current year's installment, not the full remaining balance. Get the full payoff figure in writing before you price the house or accept an offer, so nobody is surprised at the closing table.
Your options when you sell
You generally have two paths: pay off the PACE balance out of your sale proceeds at closing, or find a buyer willing to structure the deal around it. Most retail buyers using a mortgage won't have a choice, since their lender will require the payoff regardless of what anyone prefers. A cash buyer who isn't relying on a conventional mortgage has more room to work with the balance directly.
Where Cash Flow Deals fits
We pull the PACE payoff figure before we ever put a number in front of you, so it's already priced into the offer instead of showing up as a surprise deduction later. The purchase is arranged through a licensed local broker partner using a flat-fee novation structure, and the remaining PACE balance gets paid off at closing like any other lien, not out of your pocket separately.
Common questions
Does a PACE loan follow the house or the person who took it out?
It follows the house. PACE assessments are attached to the property through the tax bill, which is why a new owner can inherit responsibility for the remaining balance if it isn't paid off at closing.
Can I just let the buyer take over my PACE payments?
Only if the buyer's financing allows it, and most conventional mortgage lenders won't allow it because the PACE lien sits ahead of theirs. Check with your PACE program administrator and title company before assuming this is an option.
Will a PACE loan show up on a title search?
Yes. Because it's recorded against the property, it shows up in a title search the same way a mortgage or tax lien would, so it needs to be resolved before you can transfer clear title.
How do I find out my exact PACE balance?
Contact the PACE program administrator listed on your tax bill or original PACE paperwork and request a written payoff statement, not just your county tax office.
Does every state allow PACE loans?
No. PACE programs are enabled state by state, and the rules on residential PACE, priority, and disclosure vary. Check your state's specific PACE program rules before assuming a nearby state's process applies to you.