Residential PACE loans got a big boost in July when the U.S. Department of Housing and Urban Development (HUD) and Veterans Affairs (VA) announced that their loan programs would insure homes with PACE assessments attached to them in states that have authorized the program.
PACE provides a special fixed-rate loan that is normally longer term and is secured with a lien attached to the property itself. The property owner then repays the loan through a property-tax assessment. With the national push to make buildings more energy efficient, several states have enacted legislation that allows for PACE energy-efficiency loan programs. PACE loans are more common for energy upgrades to commercial buildings. California and a few other states, however, have started PACE programs for residential properties.
Residential PACE is controversial, however. Some mortgage-banking groups and legal associations that represent lower-income borrowers have raised concerns about PACE loans. David Gabrielson, executive director of the nonprofit information clearinghouse PACENation, spoke with Scotsman Guide News about the special nature of PACE loans and why the industry shouldn’t be afraid of them.
Read the full article at The Scotsman Guide.