The White House on July 19 announced the Clean Energy Savings for All Initiative, a joint effort from the Environmental Protection Agency and the departments of Energy, Agriculture, Veteran’s Affairs, Housing and Urban Development and Health and Human Services to increase access to solar energy, promote energy efficiency and ensure homeowner access to solar options.
To continue supporting all American communities in deploying renewable energy while creating jobs and reducing carbon pollution, the Administration is announcing the following actions:
Supporting the Scale Up of Property-Assessed Clean Energy (PACE) Financing: Since 2009, the Obama Administration has been working to provide homeowners the opportunity to finance solar and energy efficiency improvements at no upfront cost through a mechanism called PACE, including through the Middle Class Taskforce and by releasing a Policy Framework for PACE Financing Programs. Today, the Obama Administration is taking a number of new actions to allow American homeowners, including low- and moderate- income households and veterans to use PACE financing. This innovative financing mechanism allows homeowners to benefit from energy improvements immediately and pay back the cost over time through their property taxes. If the property is sold, including through foreclosure, the remaining PACE assessment will stay with the more energy efficient property and the next owner will become responsible for the remaining PACE assessment. The PACE initiatives announced today will unlock alternative sources of capital for low- and moderate- income Americans and veterans to scale up solar, promote energy and water efficiency retrofits, and create more resilient homes, leading to reduced energy bills, more empowered consumers, and cleaner communities.
Issuing Guidance on how to Use FHA Mortgage Insurance with PACE Financing: For more than 80 years, the Federal Housing Administration (FHA) has provided low- and moderate- income households and underserved communities access to safe and affordable housing through FHA mortgage insurance. Each day, more than 3,000 people close on a home for which the mortgage is insured by FHA. Today, FHA is releasing guidance outlining how properties with PACE assessments can be purchased and refinanced with an FHA-insured mortgage. This action is intended to support renewable energy and energy efficiency investments in single family housing, support retrofits that boost resilience to climate risks, and remove existing barriers to using PACE financing. The key requirements outlined in FHA’s guidance are: the PACE assessment does not take first lien position ahead of the mortgage and the assessment transfers from one property owner to the next, including through a foreclosure sale. The guidance also requires appraisers to analyze and report on the impact of PACE-related improvements to the value of the property.
Unlocking PACE Financing for Veterans: Today, in support of the Administration's longstanding commitment to create a clean-energy economy and help Americans take advantage of clean energy technologies, the Department of Veterans Affairs (VA) is issuing policy guidance on PACE-financed homes. Today's guidance will clarify the circumstances under which Veterans are able to take advantage of PACE programs in conjunction with their VA Home Loan Guaranty benefit, providing a new opportunity for veterans to participate in the clean energy economy and save on their energy bills.