Elana Echols has made a point of improving the efficiency of her 66-year-old home near the University of Toledo during the 10 years she has owned it.

Last on her list was replacing her old furnace with a new, energy-efficient model, but she didn’t think she could afford the more than $5,000 price tag for the unit and its installation.

Then she heard about Property Assessed Clean Energy, a program that allows property owners to invest in efficiency upgrades like insulation, new windows, or low-flow toilets for their homes and pay off those improvements as property-tax assessments rather than as up-front costs.

“I love it. I didn’t have the money at the time — I still don't have the money — but paying it through my taxes is really good,” Ms. Echols said.

Ms. Echols is one of 39 property owners who has participated in a small pilot program for residential PACE in Lucas County. The Toledo-Lucas County Port Authority has helped arrange PACE financing for energy upgrades at commercial and industrial properties over the years, and in 2015 they teamed up with the Lucas County Land Bank on a pilot program to expand such benefits to homeowners.

The port authority brokered more than $400,000 in loans to 39 dwellings, with each loan averaging about $10,500. The port authority paid for the work up-front, and the homeowner then pays off the principal and interest on their tax bills.

Ms. Echols said the lower energy bills she paid during the winter offset the higher amount on her property tax.

“I think it’s a great program. I think it opens up the door for people that may be working but can’t afford to come off a large amount of money at one time,” she said. “It makes it easier.”

Port authority leaders are now working to expand the residential PACE program to a statewide initiative, following in the footsteps of California, Florida, and Missouri.

Officials contracted with Renovate America, the country’s largest PACE lender, which will issue loans to the homeowners and pay contractors. Renovate America needs a public agency to issue bonds to finance the project, which is where the port authority comes in. Property owners still will pay back the loan and interest through property-tax assessments.

So far Toledo, Cleveland, Columbus, Akron, and Canton have signed on to participate, and officials are hopeful that Dayton and Cincinnati will soon join. Each home improvement project authorized by Renovate America in Ohio will be reviewed and signed off on by port authority staff.

David Mann, the land bank’s president and chief executive, said homeowners who have older heating and cooling systems, old or leaky windows and doors, or little to no insulation make great candidates for the program. Landlords who want to improve to their rental properties but are deterred by up-front costs could benefit from the program too, he said.

“It’s good for homeowners, it’s good for our neighborhoods because they need so much investment, and it’s good for the planet because every amount of energy that we save will help,” Mr. Mann said.

Toledo City Council added its support to the statewide program last month by approving an ordinance to allow the initiative to move forward.

“Ultimately when we’re talking about our neighborhoods and improving housing stock and improving the quality of our neighborhoods, the PACE program is really going to lead to these improvements that will make lives easier for our citizens,” said Councilman Nick Komives, who sponsored the legislation. “I’m very proud of this body for taking this first step.”

Councilmen Peter Ujvagi, Rob Ludeman, and Sandy Spang also spoke in favor of PACE, but at least one councilman is concerned the program won’t have enough oversight and could leave homeowners saddled with debts they can’t pay off.

Councilman Larry Sykes said he has read and heard things about the program in other states that give him pause. He cited lawsuits in both California and Florida, where Renovate America or contractors participating in PACE have been accused of misrepresenting the program and not being transparent with property owners about the expense.

Consumers have complained they were misled into taking on financing they couldn’t afford or were left with contractors abandoning projects mid-work because they were already paid.

The central California city of Bakersfield stopped participating in PACE in the last few years after consumers sounded alarms about having difficulty selling homes with PACE loans attached.

Mr. Sykes said there needs to be strict oversight and accountability in Ohio, or property owners will be at risk.

Paul Toth, the port authority’s outgoing president and chief executive, said he is aware of the concerns raised in California and Florida regarding PACE, but said consumer protections were not as robust when the program first started as they are now.

In order to participate in Ohio’s residential PACE program, property owners must be current on their mortgage payments, have no involuntary liens higher than $5,000, have no notice of default, and have a minimum credit score of 620. Officials also will conduct income-to-debt ratio calculations to ensure borrowers will be able to make their payments.

Participants also will receive calls to go over their agreements’ terms before the port authority signs off on their projects, and contractors must obtain completion certificates before they’re paid to ensure work is done properly.

“We have found the upgraded Renovate [America] process to be very protective of the homeowners, and any contractor that does not meet the program standards will be immediately removed from the program,” Mr. Toth said.

Ms. Echols said she was comfortable with the PACE process. The land bank made sure she understood the terms of her payments, and local officials signed off on the work and came back to make sure it was completed, she said.

She is active in the Scott Park District Block Watch and has been encouraging her neighbors to take advantage of the program if they want to improve their homes’ efficiency.

“I tell my people every month when we have our meeting, ‘That program is still available, and it’s still good,’ ” she said.

Mr. Toth said he believes the full program will be up and running by the end of the year. He encouraged anyone looking for more information about PACE to visit renovateamerica.com.

First Published July 14, 2019, 4:33 p.m.