Excerpt from the White House’s press release:
FACT SHEET: President Obama Announces New Actions to Bring Renewable Energy and Energy Efficiency to Households across the Country
- Unlocking Residential Property-Assessed Clean Energy (PACE) Financing: PACE is an innovative mechanism for financing energy efficiency and renewable energy improvements. PACE financing allows homeowners to benefit from energy improvements immediately and pay back the cost over time through their property taxes. When the property is sold, the remaining PACE loan stays with the more energy efficient property and the next owner is responsible for repaying the loan. PACE programs have the potential to unlock alternative sources of capital to accelerate renewable energy and efficiency retrofits for households, and reduce energy costs for consumers.To remove existing barriers and accelerate the use of PACE financing for single family housing, HUD’s Federal Housing Administration (FHA) is announcing today that, under guidance to be issued soon, properties with subordinated PACE loans can be purchased and refinanced with an FHA insured mortgage. HUD is issuing a preliminary statement indicating the conditions under which borrowers purchasing or refinancing properties with existing PACE assessments will be eligible to use FHA-insured financing. Secretary Castro is also sending aletter to Governorsdescribing the options the FHA offers to make it easier for consumers to undertake energy efficiency and renewable energy improvements in their homes. FHA’s evolving PACE guidance is also being informed by ongoing conversations with the Federal Housing Finance Agency.This action is distinct from the multifamily PACE guidance for the State of California that HUD released earlier this year. The guidance clarified the circumstances under which HUD will approve unsubordinated PACE financing on HUD-assisted and -insured multifamily housing in California in order to facilitate the establishment of a California Multifamily PACE Pilot.