Commercial property owners can request funding for projects that lower energy and water use under a new California programme called CaliforniaFIRST. This initiative will allow owners to use municipal bonds to finance projects for water efficiency, energy efficiency, and renewable-energy upgrades. The loans are paid through assessments on their annual property tax bills.
Projects which will be allowed under the programme include:
The programme will allow for loan term of up to 20 years. The interest rate charged will depend on the cost of capital provided by each lender, as well as the programme fees. Upfront costs are being covered by private lenders. Each one has committed $250 million to the programme.
Over 100 cities and counties are participating in CaliforniaFIRST. The initial launch will involve 14 counties. Commercial property owners can participate in the programme on a voluntary basis. There is no fee to apply for the programme.
Financing for the programme is made through assessments collected on the property tax bill. The assessment obligation may be passed on to the new owner when the property is sold. Participation is based on the property value and its tax history instead of the property owner’s personal credit.
The minimum amount that can be financed is $50,000. The maximum amount that can be borrowed depends on the property’s current value. The outstanding debt and the CaliforniaFIRST financing must be less than the property value and the value of the financed projects.
Each property owner can choose the financing option which best suits his or her needs. The repayment period ranges from 5-20 years, depending on the “expected useful life” of the improvements being financed.
