Selling a House With a PACE or HERO Loan in California: What the Line on Your Tax Bill Means

This page is for owners in Redding, Anderson, Red Bluff, Corning, and nearby who have a PACE or HERO assessment and want to sell, or who just heard about it from a buyer’s lender. Solar panels, a roof, or a new HVAC that was “paid through the county” often shows up this way.

I’m a home buyer, not a lawyer or a lender. This is general information, not legal or financial advice. Talk to your escrow officer, a real estate attorney or a HUD-approved housing counselor about your situation.

The basics

What is a PACE loan (and the HERO program)?

PACE stands for Property Assessed Clean Energy. California’s Department of Financial Protection and Innovation (DFPI) says PACE programs let homeowners finance energy-efficient, water-saving, and other improvements, such as solar panels, windows, or HVAC, through their property taxes.

DFPI is direct about the cost:

PACE is NOT a free government program. Homeowners must pay for a PACE contract through increased assessments in their annual property tax bills.

PACE programs are run by program administrators on behalf of a public agency. DFPI has licensed those administrators since 2019.

HERO, short for Home Energy Renovation Opportunity, was the PACE product Renovate America marketed. DFPI says so in the September 8, 2021 settlement that revoked Renovate America’s license. What happened to existing HERO assessments is farther down this page.

One local note: under the heading “Senate Bill 645 (Jackson, Chap 837, Stats. 2018),” DFPI says PACE can cover wildfire safety improvements in high fire hazard areas, with a sunset of January 1, 2029. That is still an assessment on the tax bill, not a free grant. It matters in Shasta and Tehama.

Your tax bill

Why it’s on your property tax bill (and how to spot it)

The PACE payment is collected as a special assessment on your property tax bill. DFPI says the cost is added to your annual property taxes. The Shasta County Tax Collector says a secured bill shows “voted special taxes, and city or district special assessments.” A PACE or HERO line is one of those special assessments. It is separate from the regular 1% tax.

Check your own bill. The names below are the ones on the county lists. If none of them are on your bill, the charge may be something else.

Who to call about the bill itself

• Shasta County Tax Collector, (530) 225-5511, 1450 Court St., Room 227, Redding. Secured taxes page.
• Tehama County Treasurer-Tax Collector, (530) 527-4535. Treasurer-Tax Collector page.

The tax collector bills and collects. Questions about the PACE balance go to the number listed for that assessment, not to the tax collector.

Can’t afford the higher tax bill? DFPI warns that homeowners who cannot afford the increased property taxes “could lose their homes through a foreclosure action.” If you are behind on property taxes or other liens, start there. If you are facing foreclosure on the mortgage, that timeline is separate. Your tax collector has the delinquency dates.

Selling

Can you sell a house with a PACE loan?

Yes, but the lien stays on the home until the PACE contract is paid off. DFPI says it in one sentence:

PACE assessments can also make it more difficult to sell or refinance a property because a lien is placed on your home until the PACE contract is paid off.

Why buyers’ lenders care

This is the “PACE lien” problem. Fannie Mae’s Selling Guide, section B5-3.4-01, says PACE loans “typically have automatic first lien priority over previously recorded mortgages.” Fannie Mae will not buy a mortgage on a property with an outstanding PACE loan unless the PACE program does not give that loan priority over first mortgages.

FHA’s rule changed effective January 1, 2018. DFPI’s PACE FAQ says a borrower must pay off the entire PACE obligation and remove the lien to get an FHA-insured mortgage, purchase or refinance. HUD Mortgagee Letter 2017-18 (December 7, 2017) says: “Properties encumbered with PACE obligations will no longer be eligible for FHA-insured forward mortgages.”

Background, in one line: on July 6, 2010, the Federal Housing Finance Agency directed Fannie Mae, Freddie Mac, and the Federal Home Loan Banks to address PACE first liens, and called those liens “unlike routine tax assessments.”

In plain English: if your buyer uses an FHA loan or a conventional loan sold to Fannie Mae, expect their lender to require the PACE balance paid off. The payoff can come out of your sale proceeds at closing. Ask your escrow officer how it will be handled. I am not stating VA, USDA, or current Freddie Mac rules.

The number you need

How to get a PACE or HERO payoff amount

1. Find the line on your property tax bill and its name. Use the county table above.
2. Call the number the county lists for that assessment. Ask for a written payoff (prepayment) amount good through your expected closing date.
3. Give it to your escrow officer early, before you accept an offer, so your net proceeds are clear.
4. Ask whether this year’s installment is already on your current tax bill, so it isn’t counted twice. Ask. Don’t assume.
5. Keep copies of the PACE contract and any payoff letter.

I am not stating prepayment fees, penalties, or how long a payoff letter takes. The written payoff is the number that counts.

HERO

What happened to HERO and Renovate America?

Renovate America, which marketed HERO, told its public agencies it was withdrawing from PACE as of October 2020. It filed for bankruptcy on December 21, 2020. DFPI revoked its California license, CFL license 60DBO-91914, in a settlement dated September 8, 2021.

The Western Riverside Council of Governments (WRCOG), the public agency behind CA HERO, says on its August 20, 2025 FAQ: “The HERO Program is no longer offered through WRCOG.” WRCOG’s number on that page is (951) 405-6700.

Existing HERO assessments are still on the tax rolls. Shasta’s 2026/2027 list and Tehama’s 2025-26 list both still show a CA HERO line. If you have one, it still has to be dealt with when you sell. Call the number your county lists. I am not speculating about lawsuits, refunds, or forgiveness. None of that was verified for this page.

Choices

Your options when selling a house with PACE

Compare them with your escrow officer before you pick one.

• Pay it off from the sale at closing, when the buyer’s lender requires it. Get the written payoff first.
• Sell to a buyer whose financing allows it. Some buyers or loans may not require payoff. Fannie Mae’s rule depends on whether the PACE loan has priority over the first mortgage. The buyer has to agree, and their lender decides.
• Pay it off before listing, if you have the cash. Ask the administrator how that works for your contract.
• Refinance is about staying, not selling. Fannie Mae says a lender must first try to pay off a PACE loan in a refinance when the borrower has enough equity. That is one line, not a plan I can set up for you. I am not a lender.

A cash sale can be one option. If you’d rather sell as-is, I’ll look at your house and your PACE or HERO balance and tell you honestly whether a cash offer makes sense. Houses with PACE or HERO assessments are reviewed case by case. If it works, we can close in as little as 7 days once you accept and title is clear. You help choose a closing date that fits your move; staying after closing is handled case by case. On a sale to us, we pay both the buyer’s and the seller’s closing costs. See how our cash offers work, how to spot a fake house buyer, and about Derek.

If your house is in great shape and you have time, listing with a local agent may net more, even after the PACE payoff. I’ll tell you if that’s the case. The comparison is on cash offer vs. listing.

Selling because you are downsizing or moving does not change the PACE lien. It still has to be handled.

Before you sign

If you’re thinking about getting PACE (or just signed)

DFPI says to check the contractor’s license with the Contractors State License Board and the PACE administrator’s license with DFPI before you sign. Ask the term, the total cost, and how much your property taxes will go up. Request a paper contract.

DFPI also says: “PACE contracts are signed financing agreements that are difficult to void.” For help, DFPI lists consumer advocacy groups on its PACE page. Call DFPI at 1-866-275-2677 or email PaceHelp@dfpi.ca.gov.

On ability to pay, DFPI’s page on AB 1284 and AB 2063 says administrators must determine that you have a reasonable ability to pay when they approve the financing, and before any work starts under the contract. If someone skipped that step, DFPI says to call the same number.

Talk to Derek

Questions about a PACE or HERO lien? Talk to Derek.

PACE or HERO on your tax bill? Get a no-pressure cash offer, reviewed case by case. Or call (530) 999-7694.

We buy single-family homes; mobile and manufactured homes on their own land (not in parks); rural homes on acreage and small ranches; and duplexes and small rentals. We don’t buy vacant land. Unpermitted additions are reviewed case by case.

Local cash buyer for 10+ years · 100+ NorCal homes purchased · BBB A+ rated. Read our Google reviews.

Sources we checked (October 9, 2026)

• DFPI, “PACE: Property Assessed Clean Energy: What Homeowners Need to Know” — what PACE is, that it is not a free program, the tax-bill assessment, the lien until payoff, foreclosure risk if taxes go unpaid, license checks, contracts that are hard to void, 1-866-275-2677, licensing since 2019, ability to pay (AB 1284 and AB 2063), and wildfire improvements under the heading Senate Bill 645 (sunset January 1, 2029).
• DFPI, “PACE – Frequently Asked Questions” — FHA policy effective January 1, 2018: pay off the entire PACE obligation and remove the lien for an FHA-insured mortgage.
• HUD Mortgagee Letter 2017-18 (December 7, 2017) — “Properties encumbered with PACE obligations will no longer be eligible for FHA-insured forward mortgages.”
• Fannie Mae Selling Guide B5-3.4-01, Property Assessed Clean Energy Loans — first-lien priority, when Fannie Mae will not buy the mortgage, and the refinance payoff rule.
• FHFA statement, July 6, 2010 — direction to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; PACE first liens called “unlike routine tax assessments.”
• DFPI settlement agreement, Renovate America, Inc. (September 8, 2021) — HERO marketing, withdrawal from PACE in October 2020, bankruptcy on December 21, 2020, CFL license 60DBO-91914 revoked.
• WRCOG FAQ (August 20, 2025) — “The HERO Program is no longer offered through WRCOG.” Phone (951) 405-6700.
• Shasta County Auditor-Controller, Property Tax Reports: 2026 Special Assessments Contact List (2026/2027) — CALFIRST - SHASTA COUNTY, CA HERO Res Shasta, FORTIFI CSCDA - SHASTA COUNTY, PACE FUNDING- SHASTA COUNTY, PACE - WHITE OAK, and the listed phones.
• Shasta County Tax Collector, “Secured Taxes” — bills show voted special taxes and city or district special assessments. (530) 225-5511, 1450 Court St., Room 227, Redding.
• County of Tehama, Special Assessments on the 2025-2026 Secured Tax Roll — CSCDA-CA FIRST, CSCDA – PACE FUNDING, CSCDA-OPEN PACE E3, CA HERO PROGRAM, each listed at (800) 969-4382.
• Tehama County Treasurer-Tax Collector — (530) 527-4535.
• Contractors State License Board — where DFPI says to check a contractor’s license before signing a PACE contract.

NorCal Home Offer is a home buyer, not a law firm, lender or PACE administrator. This page is general information, not legal or financial advice. PACE terms vary by contract. Talk to your escrow officer, a real estate attorney or a HUD-approved housing counselor. Last reviewed: October 10, 2026.