FHA transactions not permitted to close with outstanding PACE obligation.
In accordance with FHA Mortgagee Letter 2017-18, FHA transactions will no longer be permitted to close with an outstanding Property Assessed Clean Energy (PACE) obligation. The change applies to all case numbers issued on or after January 7, 2018. The following sections of the New Penn Financial FHA product profile have been updated with all applicable requirements:
1.4 Ineligible Transactions
Updated to reflected properties with outstanding PACE obligations are ineligible for financing.
Updated requirements for properties being purchased that have an outstanding PACE obligation.
2.8 Rate and Term Refinances
Added requirement for payoff of outstanding PACE obligations. Payoff of PACE obligations eligible for consideration as a rate and term refinance.
2.9 Cash Out Refinances
Added requirement that outstanding PACE obligations must be paid in full.
Additional information can be found in the supplement attachment to the Mortgagee Letter by clicking Here. Refer to the New Penn Financial FHA Product Profile for all specific details not contained within the Mortgagee Letter.