August 28, 2015
The FHA has issued a press release announcing new guidelines for FHA borrowers who want to add energy-efficient upgrades to their homes.
According to HUDNo.15-112, the announcement comes as part of the White House National Clean Energy Summit. The Obama Administration and FHA have new guidelines, “supporting borrowers seeking to make energy efficient improvements to their homes. In todays announcement, FHA expressed the intent to allow borrowers to use Single Family FHA financing for properties with existing Property Assessed Clean Energy (PACE) loans that meet certain conditions” according to the press release.
These new tools will help homeowners make smart choices for their pocketbooks and for the environment, said HUD Secretary Julin Castro, quoted in the press release. Castro adds, HUD and the Obama Administration are proud to invest in American families and in the future of our planet.
As early as 2009, several states passed laws, “allowing local governments to implement PACE programs using their (tax) assessment authority. PACE can vary from state-to-state, but generally allows homeowners to finance energy efficiency improvements for up to 20 years through assessments attached to the property.”
“PACE allows homeowners to benefit from the improvements immediately and spread the cost over time. When the property is sold, the PACE loan remains with the property and the next owner is responsible for repaying the loan.”
New rules to be published in the FHA single-family home loan guidebook allow participating lenders, “to evaluate the conditions under which borrowers purchasing, refinancing properties, or modifying their loans with existing PACE assessments will be eligible to use FHA-insured financing.”
The FHA plans to issue guidance at a future date that includes the following instructions for lenders:
–PACE liens that preserve payment priority for first lien mortgages through subordination are eligible;
–PACE assessments must be fixed-rate and fixed repayment schedule;
–PACE assessments must be recorded and identifiable to the lender; and
–PACE assessments must be attached to single family properties, as defined by FHA, which are 1- to 4 unit dwellings.”
More information is available at the FHA/HUD official site at http://portal.hud.gov/hudportal/documents/huddoc?id=FTDO.pdf
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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