A PACE assessment outranks your mortgage, which can block a refinance or a sale. Zero percent often means deferred interest. And the dealer fee is already in your quote.
Hommy
July 16, 2026 · 12 min read
Three roof financing products cause most of the regret: PACE assessments that take priority over your mortgage, promotional "zero percent" offers that are actually deferred interest, and contractor financing whose cost is already baked into the price you were quoted.
None of them are scams exactly. All three are legal, marketed hard, and routinely explained badly at the kitchen table.
For the full menu of ways to fund a roof, see how to pay for a new roof. This article is about the parts that bite.
PACE: the one with real teeth
PACE stands for Property Assessed Clean Energy. In Florida it is available to homeowners and explicitly covers wind resistance improvements, which is why hurricane-resistant roofing qualifies and why Florida roofers pitch it door to door.
In Texas there is no residential PACE at all. The Texas program is limited to commercial, industrial, and multifamily properties with five or more units. If someone offers PACE for a Texas single-family home, something is wrong.
Why it is different from a loan
You do not repay PACE as a loan. It becomes a non-ad valorem assessment on your property tax bill. That sounds like a convenience. It is actually the whole problem, because non-payment is a tax delinquency rather than a loan default, and the assessment takes priority over your mortgage.
What that priority does to you
The federal housing regulator stated back in 2014 that Fannie Mae and Freddie Mac policies prohibit purchasing a mortgage on a property with a first-lien PACE obligation attached, and said it would enforce that. Fannie Mae selling guide, updated in October 2025, still bars purchase unless the PACE program does not take priority over first mortgages.
Translated into everyday consequences for a Florida homeowner:
You generally cannot refinance into a conventional mortgage without paying the PACE balance off first.
A buyer generally cannot use a conventional mortgage to buy your house without the balance being cleared, which in practice usually means out of your proceeds at closing.
The obligation follows the property, so "it transfers to the next owner" is only true if that owner can finance around it.
The selling point you will hear is that PACE needs no traditional credit approval, because it is secured by the property rather than your credit. That is not a feature. That is the reason the terms are what they are.
Ask directly: does this assessment take priority over my mortgage, and what happens if I want to refinance or sell before it is paid off? Get the answer in writing. A salesperson who will not put it in writing has told you what you need to know.
Zero percent that is not zero percent
There are two different products marketed the same way, and the difference is thousands of dollars.
True zero percent intro APR: when the promotional period ends, interest starts accruing on whatever balance remains. Ordinary and fine.
Deferred interest: if any balance remains when the promo ends, or if you go more than 60 days late on a minimum payment, interest is charged retroactively, all the way back to the purchase date. The Consumer Financial Protection Bureau puts it plainly: you could have to pay all of the interest you expected to be deferred.
Store and contractor-arranged cards commonly use the deferred structure, with underlying rates in the mid twenties or higher. Consumer advocacy work has documented this as a persistent trap, and the CFPB has formally encouraged retail card issuers to move to transparent zero percent instead.
The question that separates them takes five seconds: if I have one dollar left at the end of the promotional period, what do I owe? If the answer is retroactive interest on the whole original amount, you are looking at deferred interest.
Also worth checking: promotional periods often assume a payment well above the stated minimum in order to clear in time. Paying the minimum through a deferred-interest promo is the single most reliable way to trigger the retroactive charge.
“Ask what you owe if a single dollar is left when the promo ends. True zero percent charges interest on that dollar. Deferred interest charges you for the whole roof, backdated.”
The Hommy Team
The dealer fee is already in your quote
When a roofer offers financing, the roofer is not the lender. Underwriting is done by a third party, and the contractor acts as a dealer earning a merchant fee on the transaction.
That fee is not free to you. Industry sources report standard-rate plans costing the contractor around zero to three percent of contract value, while promotional zero percent and low-APR plans commonly run in the range of five to fifteen percent, with roofing often quoted at five to twelve. Those figures come from contractor trade sources rather than regulators, so treat them as directional.
Directional is enough to matter. On a 20,000 dollar roof, an eight percent dealer fee is 1,600 dollars, and it is embedded in the price you were quoted whether you finance or not.
Which leads to the most valuable question in this article: what is your cash price, and what is your financed price? A contractor who will not differentiate the two has answered you.
How to turn a monthly payment into a real number
The pitch is almost always a monthly payment, because a monthly payment is not a price and cannot be compared to anything.
Force out three numbers: the amount financed, the monthly payment, and the number of payments. Then:
Multiply payment by number of payments. That is the total you will pay.
Subtract the amount financed. That is your total cost of credit.
Ask for the Truth in Lending disclosure, which lenders are required to give you. The APR is on it, and the APR is the number that compares across offers.
Now compare the cash price plus an outside loan against the financed price at the offered APR.
That last step is where zero percent frequently loses. The gap between the cash price and the financed price is the dealer fee, and it can easily make a "zero percent" offer more expensive than borrowing at eight percent from a credit union.
Where rates actually sit, as of July 2026
Rates move weekly, so treat these as a snapshot rather than a quote, and check current figures before you decide.
Thirty-year fixed mortgage: around 6.55 percent in mid July 2026.
HELOC: roughly 7.2 to 7.5 percent, and variable.
Home equity loan: roughly 7.4 to 8.1 percent fixed. Note that different rate trackers disagree meaningfully here, which is why this is a range rather than a figure.
Personal loans: benchmark around 12.3 percent for good credit, with credit unions averaging lower at about 10.7 percent and capped at 18 percent federally.
The practical takeaway: a credit union personal loan is often the quiet winner. No lien on your home, funding in days, a rate you can actually see, and it lets you negotiate as a cash buyer.
Why a cash-out refinance is usually wrong right now
Most existing mortgages carry rates well below current ones. A cash-out refinance reprices your entire balance at today rate to extract fifteen or twenty thousand dollars, and closing costs run on the whole loan rather than the cash taken out. It only makes sense if your current rate is already higher than today, or the roof is part of a much larger cash need.
Two things people get wrong about the tax side
Home equity interest is not automatically deductible. IRS guidance allows it only to the extent the proceeds were used to buy, build, or substantially improve the home, and only if you itemize, within the overall mortgage debt caps. A roof replacement generally qualifies as an improvement, but the deduction is worth nothing to the large majority of filers who take the standard deduction.
There is no federal tax credit for a roof. The residential energy credits ended after December 31, 2025, and a standard roof had not qualified since tax year 2023.
Rates, programs and tax rules change, and the right answer depends on your finances. This is general information, not financial, tax, or legal advice. Talk to a professional about your situation.
One Florida program worth knowing, with a caveat
My Safe Florida Home offers grants up to 10,000 dollars for wind mitigation improvements, with low-income applicants receiving the full amount without a match and others receiving two state dollars for every dollar they spend.
The nuance that catches people: roof covering replacement is not a standalone eligible category. It is covered when the inspection recommends roof-deck attachment or secondary water barrier work that requires removing the covering, in which case replacing the contiguous covering comes along with that project. So it is a wind-mitigation program that sometimes pays for a roof, not a roof program.
Two honest caveats. The backlog is long, with tens of thousands of homeowners holding completed inspections and waiting on funding. And reporting on the program has noted that the average premium discount following a roof grant came out around 18 dollars a year, which is a useful reality check on the insurance-savings pitch generally.
Ask for the cash price and the financed price as separate numbers.
Ask what you owe if a dollar remains when a promotional period ends.
Ask for the Truth in Lending disclosure and compare APRs, not monthly payments.
If PACE is offered, ask in writing whether it takes priority over your mortgage and what happens if you sell or refinance.
Get one outside quote from a credit union before accepting contractor financing. It costs an afternoon and it is the only way to know what the convenience is costing you.
