The Quick Read: The right provider for a home with a PACE assessment depends on whether the assessment gets paid off before closing, how much equity remains afterward, and how title is held. Many lenders treat the assessment as a payoff-first item because it sits ahead of any new line. A few niche programs will lend behind it and count the balance against your equity. This guide explains how that works and how a broker matches your file to a program.
- A PACE assessment is repaid through the property tax bill and usually outranks a new junior lien, so lenders ask about it first.
- A bank statement line changes how income is documented. It does not change the credit, equity, title, or valuation review.
- On an investment property, the network ceiling is 70% CLTV (combined loan-to-value). The 90% ceiling exists only on primary residences and second homes, and only at a 720 score or better.
- Title matters. The borrower must hold title to the property as an individual or through a revocable living trust, and an LLC cannot hold it.
- A DSCR cash-out refinance is the natural alternative when the PACE payoff has to happen inside the same transaction.
Why a Ranked List Won’t Help You
A ranked list of providers cannot tell you who will lend on your property, because the answer depends on the file and not on a brand. Lenders handle PACE differently, and the same lender may handle it differently by occupancy and leverage.
How large a line the equity supports.
An equity line is sized by combined loan-to-value, occupancy, and credit — not by rental coverage. Switch the occupancy or the credit band and the ceiling moves with it.
Investment-property lines require a 700 minimum credit score; second-home lines start at a 640 minimum and primary-residence lines at 600, and the combined-LTV ceiling steps down as the credit band drops on primary-residence and second-home lines and holds on investment-property lines; the line cap steps down on primary-residence lines and holds at every tier on investment-property and second-home lines.
A debt-to-income ratio above 45% requires 680+ credit. Profiles under 640 are limited to single-family homes. At least 75% of the approved line is drawn at closing. Ceilings, floors, and caps update from Lendmire’s centralized guideline source.
Line estimate
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. The rate is an editable assumption; equity-line pricing is variable through both the draw and repayment periods and never converts to fixed. Occupancy and credit drive the ceiling together: an investment property tops out at 70% combined LTV (minimum credit 700, line cap $500,000); a second home tops out at 90% combined LTV (minimum credit 640, line cap $500,000), with the ceiling stepping down as the credit band drops (the cap holds at every tier); a primary residence tops out at 90% combined LTV (minimum credit 600), and its $750,000 maximum line is available only at 75% combined LTV or below with a 700-or-better credit profile (720 on the longer-runway program) and a full appraisal. Lines above $500,000 require a full appraisal. Credit, debt-to-income, property type, and full underwriting review all affect the final line.
Lendmire is a mortgage broker, not a lender. It works with a network of wholesale HELOC lenders and matches a scenario to the program whose rules fit. The best program for your situation turns on property type, credit profile, how much you want to borrow against the home, and how you document income. The lenders that write a PACE home depend on those same variables.
So this guide skips the ranking and shows how these lenders think. You will see what they require, which questions sort one lender from another, and what to have ready. That makes you a better shopper whether you work through a broker or on your own.
Key Terms Defined
PACE (Property Assessed Clean Energy): a financing method for improvements like solar panels or windows, repaid through an assessment added to the property tax bill.
Lien priority: the order in which claims on a property get paid. Higher-priority claims get paid first in a sale or foreclosure.
CLTV (combined loan-to-value): all loans secured by the home, divided by its value. It counts the first mortgage, the new line, and any other lien that stays in place.
Payoff statement: a written figure from the PACE administrator showing what it takes to clear the assessment in full on a stated date.
Release: written confirmation from the PACE administrator that the assessment is satisfied, which the title company needs.
Bank statement HELOC: a home equity line that documents income from 12 to 24 months of deposits instead of tax-return income. It is a documentation method, not a separate kind of line.
DSCR (debt service coverage ratio): monthly rent divided by the monthly housing payment, meaning principal, interest, taxes, insurance, and any association dues.
What a PACE Assessment Does to Your Title
PACE is repaid through the property tax bill. That is the detail that drives everything else, because lenders treat a tax-bill obligation differently from a recorded mortgage.
According to Consumer Finance & Fintech Blog, the obligation attaches to the property rather than the owner. Typical terms run 10 to 20 years, and the assessment stays with the property if the home is transferred.
Priority is the part that surprises people. A county government FAQ from Palm Beach County explains that a PACE assessment outranks most other liens, including a mortgage. It also warns that unpaid PACE can trigger foreclosure even when the mortgage is current. Priority is set by state law, so the details are not uniform everywhere.
Now picture a new home equity line. It is a junior lien. With PACE on title, the line sits behind the first mortgage and behind the assessment. A lender cannot move ahead of PACE, so many lenders require it to be paid off before they fund.
PACE does not show up as a recorded deed of trust or a UCC filing. You find it on the tax bill and in county tax records. That is why a title search that looks clean can still miss it, and why the tax bill is the first document to pull.
How a Bank Statement Line Works
A bank statement line is a standard revolving line underwritten with a different income method. The lender reads 12 to 24 months of personal or business deposits to establish income. The file is reviewed on documented income under the applicable program, subject to lender guidelines.
Everything else still applies. Credit, equity, title, and valuation are all reviewed. Debt-to-income runs up to 50% on the programs in Lendmire’s network. It drops to 45% for credit profiles from 600 to 679. The ratio is calculated on the interest-only payment at the maximum draw. A PACE installment rides on the tax bill, so it can feed the housing-expense side of that review. Ask the lender how it counts it.
Valuation is the other mechanical point. Lines at or below $500,000 ordinarily run an automated valuation, and a full appraisal is required on every line above that amount. You can request a full appraisal in any case.
The draw structure is worth knowing. Across the wholesale network, one program offers a 3-year interest-only draw followed by a 17-year repayment. Another offers a 5-year draw followed by a 25-year repayment. Investment lines run the 5-year draw and 25-year repayment structure only. At least 75% of the line is drawn at closing, so this is not a line you open and leave idle. Pricing floats and never converts to fixed. If you want the product basics first, how a bank statement HELOC works covers them.
Where the Network Ceilings Sit by Occupancy
Occupancy sets the ceiling, so the table shows all three types: primary residence, second home, and investment property. These are typical guideline ranges from select wholesale partners, subject to lender guidelines and full file review.
| Occupancy | Max CLTV | Minimum credit | Line ceiling |
|---|---|---|---|
| Primary residence | 90%, only at 720+ | 600 | $500,000 at 90% CLTV; $750,000 at 75% CLTV, 700+ (720 on the longer-runway program) |
| Second home | 90%, only at 720+ | 640 | Up to $500,000 |
| Investment property | 70% | 700 | Up to $500,000 |
Those are the top ceilings, and lower credit tiers carry lower caps. A 700 score on an investment property still tops out at 70% CLTV. Lines above $500,000 are primary residence only and carry added credit and appraisal conditions.
A rental owner should read the investment row and nothing above it. The 90% figure applies to homes you live in or use as a second home, and it requires a 720 score or better. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
Three Ways a Lender Can Treat PACE
Lenders fall into three camps on a PACE home. Your job is to find out which camp a lender is in before you spend time on the application. Treat this as file matching, not a ranking.
| Lender approach | PACE treatment | Typical fit |
|---|---|---|
| Payoff-first | Full payoff and release before funding | Owners who can clear the assessment |
| Behind-PACE niche | Lends behind PACE, counts balance against equity | Strong equity, low combined leverage |
| Decline outright | Will not write a home with PACE | Not a fit; move on |
Payoff-first lenders want the full balance cleared, because a partial paydown does not remove the priority claim. They also want written proof, which is why the payoff statement and release matter.
A few niche programs lend behind PACE. They subtract the balance from your equity, so the combined leverage math gets tighter. Availability varies by lender and by program, and this camp is the smallest. A broker that shops several wholesale lenders can tell you quickly which camp a given program sits in.
A Worked CLTV Example
Run the numbers on an investment property, using modeled assumptions rather than market data. Say the first mortgage is 50% of the home’s value and the PACE balance is 6% of value. The investment ceiling is 70% CLTV.
If PACE stays and the lender lends behind it: the first mortgage plus PACE equals 56% of value. That leaves 14% of value as the most the new line could add, before any lender-specific haircut.
If you pay PACE off first: only the 50% first mortgage counts. The line could add up to 20% of value, so paying off the assessment frees 6 points of room.
The payoff changes the math, and it also changes who will consider the file. Paying off PACE moves you from the narrow behind-PACE camp into the much larger payoff-first group. The cash for the payoff has to come from somewhere. Some borrowers use savings. Whether line proceeds can fund the payoff at closing depends on the lender and on what title requires, so ask directly.
The Payoff and Release Steps
Each step has a gate, and skipping one stalls the file. The order below keeps the title company and the lender looking at the same documents.
1. Pull the tax bill and county records. Confirm the assessment exists and identify the PACE administrator.
2. Request the PACE agreement and payment history. Check that the balance matches what you expect.
3. Ask for a written full-payoff statement. A quote that covers part of the balance is not enough.
4. Pay the administrator in full as the lender’s instructions direct, either before closing or through title at closing.
5. Obtain the release. The title company needs written confirmation that the assessment is satisfied.
6. Order the line. With PACE out of the CLTV math, the lender can run the equity review on a clean position.
A recorded lien release is not the same thing. A UCC-3 termination or similar release clears a UCC filing, not a tax assessment. If someone hands you that document and calls the PACE cleared, ask for the administrator’s payoff confirmation instead.
Where the General Rule Breaks
The payoff-first rule has real exceptions. These are the ones that change outcomes.
Not every solar lien is PACE. Solar financing can appear as a UCC fixture filing, a county fixture filing, a recorded deed of trust, or PACE. Each clears differently. Identify the instrument before you assume anything about the payoff.
New PACE on a home with a mortgage. Adding a PACE assessment after you already have a mortgage can breach the loan’s covenants and trigger a default clause. This is a first-mortgage matter. Read the mortgage terms before signing for new PACE.
Delinquent PACE. A missed installment can lead to a tax-lien foreclosure even if your mortgage payments are current, according to the Palm Beach County FAQ. A delinquent assessment will stop most line files until it is cured.
Commercial PACE. The federal residential PACE rule does not cover commercial PACE, as Husch Blackwell notes. If the assessment is commercial, the lender treats it as a separate question.
The federal rule and your line. The CFPB’s executive summary of its residential PACE rule explains that PACE counts as credit and that originators must assess ability to repay. The rule took effect on its scheduled date, subject to ongoing litigation. It governs how PACE gets originated. It does not tell a line lender how to treat an existing assessment, and it does not change lien priority.
Title and vesting. The line must be held by an individual or an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. A rental deeded to an LLC needs a vesting change or a different product.
Other Network Rules That Can Block a PACE File
PACE is only one gate. The same file has to clear the rest.
Eligible property types include single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural zoning are not offered. A borrower is limited to three lines, and a borrower with more than 15 financed properties is not eligible.
Credit history matters too. A bankruptcy needs 4 years of seasoning from discharge or dismissal. Foreclosure-family history splits by program, so ask which seasoning path applies. These HELOC programs are also offered in a narrower set of states than Lendmire’s DSCR footprint, which spans 41 markets including Washington, D.C. Confirm availability early.
Bank Statement Line or DSCR Cash-Out?
Choose the line when you want to keep an existing first mortgage in place and borrow a smaller amount against equity. Choose a DSCR cash-out refinance when the PACE payoff has to happen inside the same transaction. The cash-out pays the assessment at closing as a settlement line item and replaces the first mortgage in one move.
DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Across most of the network, a cash-out on a standard rental tops out around 75% LTV, with about 6 months of seasoning as the common expectation. Purchases mostly land at 75% to 80% LTV. Coverage of 1.00 is where select programs start, and stronger ratios open better pricing and leverage. The ratio compares rent to the housing payment only. Clearing it does not mean positive cash flow, because repairs, vacancy, management, utilities, and capex sit outside the math.
A DSCR loan can also be made to an LLC, subject to lender program eligibility. That is the sharpest difference from the line. If you hold rentals in an LLC, the cash-out route often fits the structure better. The complete DSCR loans guide covers the full qualification picture.
The decision comes down to a few points. How much equity remains after the payoff? How is title held? Do you need to keep the first mortgage? Each answer points toward one product or the other.
Questions to Ask Any Lender, and Documents to Bring
Ask these before you apply.
- Do you require PACE to be paid off in full before closing?
- Do you lend behind PACE, and how do you count the balance in CLTV?
- Will you accept a payoff from the PACE administrator and its release as proof?
- Does the line need to be in an individual’s or a revocable trust’s name?
- Is a full appraisal required, or does the line run on automated valuation?
- How does the PACE installment count in debt-to-income?
Bring these documents.
- 12 to 24 months of personal or business bank statements
- The latest property tax bill showing the PACE line
- The PACE agreement, payment history, and a written payoff statement
- A mortgage statement for the first lien
- Title or vesting documents for the property
Frequently Asked Questions
Can I get a bank statement HELOC on a home that has a PACE assessment?
Yes, but the path depends on the lender. Many lenders require the assessment to be paid off in full before they fund the line. A few niche programs lend behind it and subtract the balance from your equity. A broker that works with several wholesale lenders can match your file to the right camp.
Do I have to pay off PACE first?
Usually, yes. PACE sits ahead of a new junior lien, so payoff-first lenders want the assessment cleared and released before closing. A partial paydown does not remove the priority claim. Ask each lender whether it requires a full payoff and what proof it wants.
Does it matter whether the home is a rental or my primary residence?
Yes, a great deal. The ceiling on an investment property is 70% CLTV with a 700 minimum score. Primary residences and second homes can reach 90% CLTV, but only at 720 or better. The PACE issue is the same across all three. The leverage you can reach is not.
Does my first-mortgage lender need to approve anything?
It can matter. Taking on new PACE after you already have a mortgage can breach the loan’s covenants and trigger a default clause. Review your mortgage terms before you sign for new PACE. An assessment that predates your mortgage is a different situation.
What if my rental is deeded to an LLC?
The line cannot be written to an LLC. A property already deeded to an LLC needs a vesting change before the line, or a DSCR cash-out refinance instead. Check program terms before you move title, because a transfer can affect other loans on the property.
Matching Your File to a Lender
The honest answer to which provider is best is a screening process. You pull the tax bill, identify the assessment, decide whether to pay it off, and then match the cleaned-up file to a program with the right ceiling for your occupancy.
If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
The takeaway for any owner with a PACE assessment is simple: the assessment is a payoff item to plan for, not a reason to stop looking.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges home equity lines of credit in its 16 full-service states through wholesale lenders, on primary residences, second homes and investment properties. Every line is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Consumer Finance & Fintech Blog
2. Palm Beach County, PACE Frequently Asked Questions
4. CFPB Residential PACE Rule Executive Summary
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Top Bank Statement HELOC Providers With Only 15 Percent Equity in the Home · Top Bank Statement HELOC Providers for Business Owners With Uneven Monthly Revenue · How to Get a Bank Statement HELOC When a Co-Owner Won’t Sign
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.