John Oliver warns against the well-intentioned horrors of PACE home renovation loans

The Property Assessed Clean Energy (PACE) program "was originally designed to provide low-income homeowners a way to make their homes more environmentally friendly," but there are "huge problems" with it, mostly that it could cost you your home, John Oliver said on Sunday's Last Week Tonight. PACE loans started in California, and Missouri and Florida have active programs, too, but the other states considering starting their own PACE initiatives — New York and Ohio, say — should stop, he said, "because when PACE loans go wrong, they can go very wrong."

"Unfortunately, the story of PACE is a cautionary tale about how good intentions, when not paired with careful, smart design, can end in disaster," Oliver said. There are several companies that offer PACE loans, but "the majority of actual sales to customers are done by individual contractors who will be performing the renovations — and think about what that means for a moment," he said. "The people with responsibility for pitching a very complicated financial product, a pseudo-loan that's technically a tax lien, are contractors, whose training is not in finance," and crucially, there's no independent energy audit to determine if the renovations will, in fact, pay for themselves through lower energy bills.

Signing up for the loans, sometimes done quickly on an iPad offered by a contractor, "isn't like agreeing to the terms and conditions of an iTunes update, this is like sitting across the table from a banker potentially signing your house away," Oliver said, explaining that the "priority lien" on houses mean PACE lenders get their money first when customers lose their house.

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States and counties can improve some of these systems, but "I would argue the flaws of this program are baked into how it operates," Oliver said. "The fact is, this business model is fundamentally flawed. And I'm not saying that affordable clean energy isn't something we shouldn't be investing in — it absolutely is. But we shouldn't be putting vulnerable people in a position where they are risking their homes." There's a little NSFW language and a little less George Clooney. Watch below.