HB 646 Summary: Residential PACE Loans

• Creates comprehensive regulatory framework for residential Property Assessed Clean Energy (PACE) loans in Ohio, establishing licensing requirements for PACE administrators through the Department of Commerce Division of Financial Institutions.

• Requires PACE administrators to verify homeowner ability to repay through debt-to-income ratios not exceeding 43%, sufficient residual income for basic living expenses, and use of reliable income documentation before loan approval.

• Establishes consumer protections including 3-day rescission rights, mandatory disclosures on separate one-page documents, recorded telephone confirmations of loan terms, and prohibitions on deceptive marketing, steering, and payments to encourage participation.

• Creates residential PACE lien structure that is subordinate to pre-existing mortgages and first mortgages recorded after the lien, with repayment collected through special assessments over up to 20 years through property tax bills.

• Requires $100,000 to $200,000 surety bonds for administrators, establishes civil penalties up to $10,000 per violation, and provides homeowners private right of action for statutory damages of $5,000-$10,000 plus attorney fees for violations.