Page 12 - JanuaryBuilderBrief
P. 12
FHA to Halt Insuring New Mortgages
with PACE Obligations
FHA
On Dec. 7, the Federal Housing Administration have adopted specific legislation allowing local
(FHA) issued Mortgagee Letter 2017-18 announcing governments to fund home energy improvements
the agency will no longer insure new mortgages and structure repayment by assessments collected
on properties that include Property Assessed through homeowners’ property tax bills.
Clean Energy (PACE) assessments. This reverses The liens generally travel with the property when
policy announced by the agency in July 2016. The the home is sold and subsequent home owners
directive applies only to new mortgages and is continue to pay for the improvements in their tax
effective 30 days after the date of announcement. assessments.
However, in a press release announcing the NAHB policy supports using PACE programs to
decision, HUD noted concerns with PACE obligations finance energy retrofits as long as the programs do
on outstanding FHA-insured mortgages. “FHA not impair the housing finance system. However,
intends to monitor this carefully to determine NAHB has expressed concerns about the potential
whether further action is warranted,” the press negative impact of properties with first-lien PACE
release stated. financing that could impair the mortgage lender’s
PACE programs provide home owners financing ability to recover the outstanding loan obligation
to make energy-efficient improvements to their in the event of a default.
homes. PACE programs are available in states that NAHB DEC 2017
“Building Dreams One Home At A Time”
Portfolio Loans Construction Loans
9110 IH 10 West, Ste 100 San Antonio, TX 78230 (210)593-3710 www.tapfcu.coop
12 JANUARY 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION