Alabama rebuilt its PACE financing program — and kept condominiums shut out
Alabama rebuilt its PACE financing program — and kept condominiums shut out
2026-09-10 · Alabama · Legislation
Alabama reworked its property-assessed financing statute in 2026 to bring in private capital. Condominium and cooperative associations remain outside it, and the exclusion is written into both the definition and the applicability clause.
HB 163 became Act 2026-265, signed on March 17, 2026 and effective June 1, 2026.1 It passed the House 99–0 and the Senate 30–0. It renames the Property Insurance and Energy Reduction Act of Alabama as the Property Insurance Reduction and Capital Expenditure Act of Alabama, amends Ala. Code §§ 11-81-240 through -246 and -249, adds §§ 11-81-251 and -252, and repeals §§ 11-81-247 and -248.
The exclusion
The definition of qualifying property at § 11-81-241 and the applicability clause at § 11-81-242 both carve out the same properties. The program
“excludes residential property consisting of fewer than five units and individual residential units of condominiums or cooperatives and limited common elements and common elements attached to or related to the condominium or cooperative units.”
That reaches further than the unit. Limited common elements and common elements — the roof, the envelope, the shared mechanical plant, the very components a wind-mitigation or energy retrofit would target — are named.
This is the only enacted Alabama act in the past fourteen months that uses condominium terms operatively rather than in a passing list.
What the act opened up
For everyone else, the program got considerably more usable. The act lets private capital providers finance qualified improvements, requires liens to be placed on qualifying property to secure assessments assigned to those providers, adds new construction and adaptive reuse to the categories of qualified project, bars public money from funding private loans, and repeals the loss-reserve-fund and state-regulatory-jurisdiction provisions.
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