Texas has strengthened its C-PACE framework, delivering greater capital access for property owners, developers, and lenders while preserving the program’s energy and water conservation integrity. Keeping PACE in Texas, the state’s C-PACE standards body, has approved significant enhancements to the PACE in a Box program, aligning financing terms with market realities and reinforcing underwriting discipline.
Higher LTV Cap – Maximum LTV increased from 25% to 35%, providing additional leverage. Projects remain subject to standard appraisal requirements under banking regulations.
Expanded Repayment Options – Capitalized interest and I/O periods extended up to five years, improving alignment with lease-up and stabilization timelines.
Refined Savings-to-Investment Ratio (SIR) – Interest expense removed from the cost side of SIR calculations, improving eligibility on capital-intensive projects.
Principal Payment Start Date – Repayment must begin within five years of closing:
Up to 3 years for construction.
Additional 2 years for stabilization if needed.
For refinances, stabilization may extend up to 3 years.
Texas now stands among the most competitive C-PACE markets nationwide.
Higher leverage reduces reliance on mezzanine debt or dilutive equity.
Longer I/O periods enhance cash flow flexibility during lease-up.
Stronger underwriting safeguards program sustainability and market confidence.
These updates are designed to work as a package and are incorporated into the model PACE in a Box program to ensure uniformity statewide. Municipalities updating statutory PACE Reports should adopt the full package to maintain compliance, transparency, and program integrity.
With these enhancements in effect, stakeholders should reassess capital stack strategies for Texas-based projects. For analysis on how these changes could strengthen your financing execution, contact deals@c-pace.com.
Sources: Texas PACE Authority, LoneStar PACE
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Clearwater is a New York-based national direct lender specializing in C-PACE Financing for Commercial Real Estate, spanning all asset types and geographies across the U.S. We offer low-cost, fixed-rate, long-term loans ideal for new construction or recapitalizations of recently completed projects. Our team of seasoned real estate investment professionals, with extensive expertise in structured finance, crafts tailored solutions that align with the Sponsor’s needs, including hedging away negative arbitrage and flexible prepayment options.
For more information, please visit us at www.c-pace.com or email us at info@c-pace.com.
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Clearwater is an institutionally capitalized direct C-PACE Lender focused on deploying fast, flexible capital for bold, sustainable projects spanning all asset types and geographies across the U.S.
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