Los Angeles County has ended its controversial PACE home improvement loan program, after determining the program lacked adequate consumer protections.
The PACE program—Property Assessed Clean Energy—provided loans to homeowners who purchased energy efficient upgrades.
Homeowners repeatedly alleged the private home improvement contractors who signed them up for PACE misrepresented how the financing would work, saddling them with loans they could not understand or afford.
The decision doesn’t mean PACE totally ceases to exist within L.A. County. Homeowners with existing loans taken out through the county’s program must still pay back what they owe.
It also doesn’t mean homeowners can’t take out a new PACE loan. Some cities, including Los Angeles, not only took part in the county’s program, but also partnered with statewide PACE programs to offer additional financing within their cities.
The PACE program was launched in 2015, and the county has been sued in the past for allegedly failing to regulate private lenders it partnered with to issue loans, according to the Los Angeles Times. Often contractors themselves signed up homeowners for the program then misrepresented the loan terms or pushed them to take on debt they could not afford, according to the report.
The L.A. City Attorney’s Officesued one of those contractors last year for allegedly defrauding homeowners for the construction of so-called granny flats financed through the program. The contractor, Eco Solar Home Improvement, targeted Spanish-speaking homeowners, according to the allegation.
Some homeowners have also accused contractors of forging their signatures on loan documents. PACE programs in other California jurisdictions have been similarly criticized.
The county’s Department of Consumer and Business Affairs will also continue to assist homeowners with loan issues.