PLEASANTVILLE, NY (PRWEB) AUGUST 27, 2015
On Monday, August 24, 2015, President Obama announced plans to unlock residential PACE (Property Assessed Clean Energy) financing to make it easier for Americans to invest in energy efficiency and clean energy technologies for their homes. Under guidance to be issued soon by the Department of Housing and Urban Development’s Federal Housing Administration (HUD/FHA) properties that subordinate PACE project financings will be eligible for an FHA insured mortgage when sold or refinanced. Today, the FHA provides mortgage insurance for more than 7.6 million households and insures more than 20% of new mortgage originations in the United States.
PACE has already proven its effectiveness for homeowners in California, where over $1 billion in PACE funding has helped more than 50,000 households save money by reducing energy costs. PACE provides 100% funding that is repaid for up to 20 years with an assessment linked to their property tax bill, so homeowners can begin saving money on energy costs immediately.
Because they are linked to the property, PACE assessment should transfer to a new buyer upon sale of a home, but resistance to PACE from Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency (FHFA) has made this valuable option unavailable to some homeowners. FHA guidance will establish clarity and should allow established senior lien PACE programs to contractually subordinate PACE assessments, an option that is already being embraced in California by the HERO PACE program, and pending guidelines, by the CaliforniaFirst PACE program. Read more.