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Local Option - Special Improvement Districts

Savings Category 
Other EE
Program Info
Sector Name 
Programs administered locally
Program Type 
PACE Financing
Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENow for more information about PACE financing, and for a comprehensive list of all PACE programs across the country.

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. Hawaii has authorized certain local governments to establish such programs, as described below. (Not all local governments in Hawaii offer PACE financing; contact your local government to find out if it has established a PACE financing program.)

Existing Hawaii law authorizes counties to create special improvement districts for financing a variety of projects that serve the public purpose and benefit the county. The counties can also issue bonds and collect special taxes on property within the special improvement districts. Renewable energy and energy efficiency improvements are not specifically mentioned in the enabling law, though these improvements appear to be eligible.

As of September 2011, no local governments in Hawaii have created PACE financing programs.