C-PACE for new construction: how much of a ground-up build it can fund

C-PACE is usually explained as a way to pay for a new boiler or a roof of solar panels on an existing building. In a growing number of programmes it can also fund a meaningful slice of a ground-up development, if the building is designed to beat the energy code. This guide is for the developer weighing that option: why new construction qualifies, how four programmes size the financing, how C-PACE closes and draws next to a construction loan, and when it is not worth the trouble. All sources were checked on 14 October 2026. Programme rules differ by state, so check yours on our state pages.

Why new construction qualifies at all

On a retrofit, the C-PACE case is the energy saved by replacing something old. On a new building there is nothing old to replace, so the programmes measure the design against the energy code instead. The financing is a reward for building better than the law requires.

Connecticut. Connecticut Green Bank says developers demonstrate energy performance with whole-building energy modelling, or the HERS Index for multifamily, and that the building’s designed energy performance and the technologies used determine the share of costs that can be financed. The entry point is a design at least 5 percent better than a code-compliant baseline under IECC 2021, or 10 percent better for IECC 2018 and earlier codes.

New Jersey. The Garden State C-PACE Supplemental Guidelines require the Whole Building Model approach: one model of the building as it would be if it just met the State Energy Subcode, and a second of the building as designed. The difference between the two decides the financing percentage.

Utah. The state’s new-construction brochure says C-PACE is available if the building is designed to meet or exceed current energy code, which it gives as 2021 IECC and ASHRAE 90.1-2018.

New York City. The NYC PACE Program Guidelines (version 4.0, revised 26 June 2026) take a different line: all New Construction and Major Renovation projects must result in “all-electric” buildings that meet the programme’s Low Carbon Building requirement, with listed exemptions such as commercial kitchens and laboratories.

How the programmes size it

The caps below are not measured against the same thing. Connecticut and Utah state their caps as a share of eligible construction cost. New Jersey and New York City cap the financing against the appraised value of the finished, stabilised property. A 35 percent cap on cost and a 35 percent cap on value can produce very different loan amounts for the same building.

Programme	Measured against	Cap
Connecticut Green Bank	Total Eligible Construction Costs (TECC)	20% to 35%, by energy performance and bonus technologies
New Jersey (Garden State C-PACE)	Appraised value as of stabilisation	20% to 30% base, plus 2.5% per bonus technology, not to exceed 35%
Utah	Total eligible construction costs	Up to 35%
New York City	Loan-to-value as stabilised	35%, plus reasonable financing costs and capitalised interest

Connecticut’s tiers. A design at least 5 percent better than an IECC 2021 baseline unlocks 20 percent of TECC. At least 10 percent better (20 percent above IECC 2018 and earlier) unlocks 25 percent. Two bonus technologies add another 5 percent of TECC, and up to four add 10 percent. An all-electric, net-zero design can reach up to 35 percent. The Green Bank’s bonus list includes Level 2 or better EV charging, behind-the-meter battery storage, facility-wide high-efficiency heat pumps and solar PV sized for the project. TECC can include engineering and design, energy modelling, energy-using equipment such as HVAC, lighting, elevators and windows, landscaping, insurance, and legal and administrative fees. Land acquisition, marketing and items not affixed to the property are excluded.

New Jersey’s tiers. For permits under the current State Energy Subcodes, a design that beats code by less than 2.5 percent gets a 20 percent base; 2.5 to under 5 percent gets 25 percent; more than 5 percent gets 30 percent. Under the prior subcodes, the thresholds are less than 7.5 percent (20 percent base) and more than 7.5 percent (30 percent base). Each bonus technology, such as EV charging infrastructure, behind-the-meter energy storage, facility-wide heat pumps or solar sized for the project, adds 2.5 percent. If the project also includes water conservation or resiliency improvements, those costs are counted separately and added on, with the combined total not to exceed 90 percent.

Utah. The brochure gives a single figure: up to 35 percent of total eligible construction costs.

New York City. The loan may fund only eligible improvements, energy audits and feasibility studies and related eligible soft costs, and, unless the programme’s Technical Guidance Supplement says otherwise, cannot exceed 35 percent of loan-to-value as stabilised. The value must come from an accredited third-party appraisal acceptable to the administrator, completed within two years of project submission. Soft costs are counted pro rata: the eligible share of total soft costs follows the ratio of eligible hard costs to total hard costs.

Closing with the construction lender

New-construction C-PACE almost always sits next to a senior construction loan, and that lender has to agree.

Consent comes first. NYC’s guidelines require every mortgage holder on the property to consent to the PACE loan on the programme’s current consent form. Writing on 27 May 2026, lawyers at Mintz say that because the assessment ranks ahead of the mortgage lien, the senior lender’s written consent is a prerequisite to closing, and that construction-phase deals must also address draw mechanics, completion guaranties and the coordination of the C-PACE and senior loan closing timelines. Our lender consent guide covers that negotiation from the owner’s side, and our capital stack guide shows where the assessment sits.

One draw package, one inspector. Two Nuveen Green Capital managing directors, writing in the Construction Lender Risk Management Roundtable’s 2026 journal, say borrowers submit a single monthly progress report and draw requisition package to both the senior lender and the C-PACE provider, and that typically one mutually agreed third-party inspection agency is retained to conduct site visits and verify completed work.

Capitalised interest. In New York City, lenders may allow interest-only periods during construction and may permit interest to capitalise during a reasonable construction or stabilisation period. Capitalised interest and reasonable financing costs can be added on top of the 35 percent cap. The loan term, not counting the construction period, must not exceed the weighted average useful life of what is financed.

Delayed draws, as reported in named deals

None of the programme documents cited here defines a “delayed-draw” C-PACE loan. What exists is deal press:

• Commercial Observer reported on 13 April 2026 that North Bridge originated $13.8 million of C-PACE alongside a $25 million senior loan from Old National Bank for The Pike, a ground-up multifamily project in Nashville, structured as the first delayed-draw C-PACE financing in Tennessee and, by the article’s account, the second transaction of its kind.
• The same article says North Bridge’s first delayed-draw deal was a $108 million construction loan for Fisher Brothers in early 2025, to expand the Area15 District on the Las Vegas Strip, and describes the structure as letting a borrower draw funds when needed without paying interest on the full amount.

The point for a developer: if the C-PACE money is funded at closing and sits idle while you build, you may pay interest on money you have not used. Ask each capital provider how and when its funds are drawn, and what you pay on undrawn amounts.

Recent deals as illustrations

• Cal Neva, Lake Tahoe (reported 27 May 2026). Mintz says the $298 million financing for the redevelopment of the historic Cal Neva Hotel into Lake Tahoe Proper Resort and Casino included $223 million of C-PACE from Nuveen Green Capital and a $75 million senior construction loan from Banc of California. Mintz calls it the largest C-PACE financing in Nevada’s history.
• The Pike, Nashville (reported 13 April 2026). $13.8 million of C-PACE beside a $25 million senior loan, with preferred equity from Eldridge Acre Partners and common equity from the co-developers. Commercial Observer says the project is slated for completion in 2027.

On the Cal Neva deal the C-PACE piece was larger than the senior loan. The Nuveen Green Capital authors say that in new construction C-PACE now frequently provides as much as, and sometimes more than, the senior lender. These are illustrations, not quotes: your sizing depends on your programme and your appraisal.

When new-construction C-PACE does not pencil

• The design does not beat code by enough. Connecticut’s tiers start at 5 percent better than IECC 2021 (10 percent for IECC 2018 and earlier codes). In New York City, new construction must be all-electric, apart from the listed exemptions such as commercial kitchens and laboratories. Upgrading the design costs money, so weigh it against the extra financing it unlocks.
• The construction lender will not consent. Without the senior lender’s written consent, there is no closing.
• Most of your budget is not eligible. Land, marketing and loose equipment do not count in Connecticut’s TECC. In New York City only the eligible share of soft costs counts. If the eligible base is small, the cheque is small.
• The cheaper option is already in the stack. Mintz says C-PACE is often replacing otherwise unavailable mezzanine debt or preferred equity. If you can fill the gap more cheaply, or cannot carry another long-dated senior assessment on the property, compare it on cost first; our comparison of C-PACE, mezzanine and preferred equity sets out the trade-offs.
• Your programme does not size new construction the way you assumed. The four programmes above use different bases and tiers, so check your own programme’s rules before you model the deal.

Next step

If you are pricing a ground-up project and want to know whether C-PACE fits, and how much your programme would size, get in touch. C-PACE Desk is an advisory and placement service, not a lender and not a programme administrator. We can read your programme’s rules against your budget and bring you term sheets from capital providers.