NYC Revises C-PACE Rules. What Changes for Borrowers?

September 4, 2026

Executive Insights Finance Investment New York More Northeast Policy

Two Nuveen executives examine how staged funding could improve project economics and where financing challenges remain.

New Work City’s revised C-PACE rules took effect Aug. 8, introducing installment funding and other changes intended to expand the program’s reach. Previously, the full loan amount was considered disbursed at closing. Under the new structure, interest accrues only on funds that have actually been advanced, reducing financing costs for borrowers drawing capital over time.

That distinction could be particularly relevant for lengthy, capital-intensive projects, including new construction, office-to-residential conversions and adaptive reuse. Still, reduced financing expenses address only one part of the development equation. High construction costs, elevated interest rates and tight yields continue to challenge project economics.

Commercial Property Executive spoke with Senior Director of Northeast Originations Mike Doty and Vice President of Policy Dave Schatz, both at Nuveen Green Capital, about the amendments’ practical implications, the projects that could benefit most and what additional changes are still needed.

How did experience in more established C-PACE markets help shape NYC’s latest amendments?

Schatz: The city itself took action to review and amend its program. As we’ve completed transactions across nearly every C-PACE-enabled state, we’ve been able to bring our experience from other C-PACE programs to administrators across the country and convey best practices from the most efficient, highest-performing programs. With these most recent changes, the city has aligned its program with some of those best practices.

Which elements of the revised framework are most likely to expand the program’s reach and increase the impact of C-PACE financing?

Schatz: There is no doubt that the changes NYC has put forward will expand the eligibility of the program, opening it up to more and larger projects. The change to a loan-to-value basis for calculating proceeds and the ability to go up to 35 percent LTV will certainly increase the impact of C-PACE on the cost of capital for projects in the city.

The expansion of eligible measures for adaptive-reuse projects is an innovative way to recognize and give value to the unique benefits of low-carbon building materials. The city has shown a real willingness to reduce friction and create efficiencies to draw more projects into the program.

How much could installment funding reduce interest carry on a typical C-PACE construction loan?

Doty: Construction loans typically average being 50 percent drawn during their term. Because of that, this rule change has the ability to reduce interest costs associated with a C-PACE transaction by 50 percent. This makes utilizing the program significantly more competitive.

Which types of projects stand to benefit most from the new structure and which might see relatively little difference?

Doty: New construction and adaptive-reuse projects stand to benefit the most. The longer the construction schedule and the more intensive the go-forward capital expenses, the stronger the benefit will be.

Projects where C-PACE is being used for recapitalization may see less benefit, though there could still be some upside if funds are being held back for tenant improvements—a use case we’ve seen in other markets.

Could the savings from staged C-PACE funding be large enough to influence whether a conversion pencils, or are they more likely to improve the economics of a project that was already viable?

Doty: It has the potential to affect both. Cutting interest carry in half is significant and would have a meaningful, albeit single-digit, impact on total development cost.

In a market where overall yield on cost is tight, I can see some projects going from infeasible to feasible given this change. Equity remains tight in the market even with strong liquidity. Given those two factors, deals with stronger yield-on-cost metrics have a better chance of moving forward.

The amendment removes one financing hurdle, but what challenges should owners and developers be careful not to assume it has resolved?

Doty: Rising construction costs and interest rates remain significant factors. This is a move in the right direction, but projects whose economics were predicated on construction costs 10 percent lower and permanent interest rates of around 4 percent will still struggle to find an equity return that makes sense.

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The city has revised the program within the limits of existing law. Which additional state-level changes could further move the needle?

Schatz: At the state level, the legislation addresses existing friction points, while the city has taken action on the program within the confines of existing law.

The bill that passed overwhelmingly in Albany this year and is awaiting the governor’s approval expands eligible measures, increases potential proceeds by shifting to LTV as a basis for calculations for all projects, and eliminates the need for a cost-benefit ratio. These three factors have materially held back the program.

Addressing them in statute would address them for the city and give the city the ability to dramatically improve on the amendments it has already made.

Given the length of the development cycle, what indicators would demonstrate over the next 12 months that the amendments are having an impact?

Doty: I would expect that we’ll have closed a few meaningful transactions in New York, with a pipeline suggesting accelerated growth heading into 2028.

C-PACE transactions and development in general operate on a long cycle, but I would expect to see data points showing the NYC C-PACE market growing to a place closer to its program peers relative to the size of the addressable market.