PACE funds energy upgrades to buildings that create jobs, make properties more valuable, and help states achieve policy goals. It’s 100% voluntary and it’s being adopted in every region of our nation.

PACE Updates

RMI: FHA Should Reconsider their About Face—About PACE

Source: Rocky Mountain Institute (By Jacob Corvidae and Martha Campbell)

Last week, the Federal Housing Administration (FHA) announced it will stop insuring new mortgages on homes with property assessed clean energy (PACE) loans. As to what motivated its decision—according to its letter to the U.S. Department of Housing and Urban Development—the FHA is “concerned with the lack of consumer protections associated with the origination of the PACE assessment, which are far less comprehensive than that of traditional mortgage financing products.” This announcement directly contradicts guidance issued by the FHA in 2016.

Rocky Mountain Institute feels this decision is misguided for three key reasons.

  1. The FHA overstates the risk of PACE to taxpayers while failing to acknowledge or account for the significant default risk that the excessive energy expenditures of inefficient homes can create for a homeowner.
  2. This will inhibit homeowners from making valuable home improvements, while curbing PACE’s job-creation potential in the construction and renovation industry.
  3. It undermines existing state-level consumer-protection standards that are in place and federal standards that are in development, and may in fact guide homeowners toward more risky financing solutions, such as high-interest rate credit cards, that lack such standards.
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MikeRMI: FHA Should Reconsider their About Face—About PACE

PACENation Disappointed with FHA Policy Reversal By HUD

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.

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MikePACENation Disappointed with FHA Policy Reversal By HUD

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Resources & Downloads

PACENation’s Consumer Protection Policies

PACENation’s consumer protection policies (CPP Version 2) represent the strongest protections and disclosures for homeowners investing in energy efficiency or renewable energy.

Study: PACE Makes Homes More Valuable

In the first economic study of homes with PACE upgrades, three different methodologies and three home price indices were examined and all turned up the same results; PACE is good for the resale value of homes, even after taking into account the financing costs. Published in the Journal of Structured Finance January 2016.

Whitepaper: Benefits of PACE for Commercial Real Estate Companies

For commercial real estate property owners, PACE financing can remove the typical barriers to the implementation of energy efficiency improvements. In this whitepaper, George Caraghiaur explains how to take advantage of the many benefits PACE provides to commercial real estate companies.

2009-2016 C-PACE Market Overview

From 2009-2016, the commercial PACE market provided financing for 1020 commercial projects that amounted to $340 million in total funding.

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