U.S. Department of Housing and Urban Development Announces The Federal Housing Administration Will Cease Insuring Mortgages On Homes With PACE Assessments
PACENation is dismayed to learn that HUD has abruptly reversed FHA’s PACE policy, which was put into effect by the Obama Administration in 2016, and will no longer insure mortgages for homes with Property Assessed Clean Energy (PACE) assessments. The new guidance is set to go into effect on January 6, 2018.
PACENation finds it disappointing that HUD has made a determination that will eliminate one of the principal benefits of PACE, which is transferability of the PACE assessment upon resale, for homes that have used FHA financing. It is well documented that PACE is a successful tool for helping homeowners make energy efficiency, renewable energy and water conservation improvements that save money and make their homes safer and more comfortable to live in.
The mortgagee letter released by HUD yesterday names two reasons for the policy change: concern about losses to FHA’s Mutual Mortgage Insurance Fund, and concern with the lack of consumer protections related to PACE.read more