Good News on Residential PACE Financing!Submitted by Coby Tue Aug 25 2015 13:34:22 GMT-0400 (EDT) by Coby
Yesterday President Obama laid down a marker in support of residential Property Assesed Clean Energy (PACE) financing. The White House announced that people using Federal Housing Authority (FHA)-insured loans will be able to buy property with PACE liens that meet certain restrictions. FHA currently insures approximately 5 million mortgages in the U.S.
You might remember that back in 2010, the Federal Housing Finance Authority (FHFA, not to be confused with FHA), issued rules blocking Fannie Mae and Freddie Mac from buying mortgages with PACE liens attached, effectively killing momentum for residential PACE across the U.S. Since then some residential PACE programs have launched and performed very successfully, including those in California.
This action by the White House is a big deal for PACE financing. While the announcement only impacts FHA-insured loans, the White House included mention that there are ongoing conversations with FHFA about PACE -- a promsing sign that, as more and more data proves that PACE liens don't adverse;y impact mortgage default rates, FHFA could loosen it's guidance as well.