Property Assessed Clean Energy (PACE) Lending
MBA believes energy efficient home improvements can be beneficial for homeowners, but significant concerns exist when these improvements are financed with Property Assessed Clean Energy (PACE) loans-a financing structure lacking vital consumer protections and presenting lien priority risks to lenders, investors and guarantors.
Overview: Federal consumer protection regulations are needed, because all PACE loans are not subject to appropriate, standardized consumer protections. Following enactment of S.2155 during 2018, the CFPB is now authorized to issue rules to shield consumers from the well-documented dangers posed by PACE loans. Without such federal standards, more states will continue to act independently and create a patchwork unequal and divergent safeguards. Also, PACE loans upend traditional lien priority, exposing investors and guarantors to increased loss severities. MBA supports the continued ban on PACE loans in housing programs offered through the GSEs, FHA and VA.
Recent MBA Activity Related to Property Assessed Clean Energy (PACE) Lending
- Joint Trades Letter: Coalition to FHFA on GSE Treatment of PACE Programs (March 16, 2020)
- Comment Letter: MBA to CFPB on Proposed Rulemaking for PACE Financing (May 7, 2019)
- Comment Letter: MBA to CFPB on Inherited Rulemaking RFI (June 25, 2018)
- Testimony: David H. Stevens, CMB at U.S. House Committee on Housing and Insurance (November 2, 2017)
- Letter: MBA to U.S. Senate Committee on Transportation, Housing and Urban Development Appropriations Bill for FY 2018 (July 26, 2017)
- Joint Trades Letter: MBA et al. to U.S. House in Support of Property Assessed Clean Energy (PACE) Legislation (April 24, 2017)
- Letter: MBA to HUD on PACE Loans (March 20, 2017)
- Comment Letter: MBA to Department of Energy on PACE Financing Programs (August 19, 2016)