The federal government has announced new guidelines that will make it easier for the sale and financing of homes with existing property-assessed clean energy (PACE) loans, through the Federal Housing Authority (FHA) and the Veterans’ Administration (VA).
Seniority has been a sticking point for PACE loans since California enacted Assembly Bill 811 of 2008, allowing such financing, and the pioneering Sonoma County Energy Independence Program launched in March 2009.
“This guidance provides resolution on how PACE financings will be handled in the event of a property’s sale, refinance or foreclosure and upholds PACE’s senior lien position,” said Stacey Lawson, CEO and president of Ygrene Energy Fund, a Santa Rosa-based PACE financing provider. “This is confirmation for the homeowners and local governments that have realized enormous, positive benefits of PACE financing for energy and water-related improvements.”
PACE programs enable homeowners to finance up to 20 years water and energy-efficiency projects, paying for the improvements along with their property taxes.
The new guidelines say that a senior PACE lien can be secured to a property with an FHA-insured mortgage in a manner consistent with traditional special property-tax assessments. Additionally, the announcement reinforces lien transferability by stating that in the event of a sale — including a foreclosure sale — that the outstanding PACE obligation will remain with the property and the new homeowner will be responsible for the balance.
The Obama administration, in collaboration with state agencies, also announced a new goal to bring 1 gigawatt of solar — enough to power roughly 700,000 homes — to low- and moderate- income families by 2020. The Clean Energy Savings for All Americans Initiative is a joint partnership between the department of Energy, Housing and Urban Development, Agriculture, Health and Human Services and Veteran’s Affairs, and the Environmental Protection Agency.