Reminder about Mortgages with PACE Obligations
August 20, 2014
Today we issued an Industry Letter to remind you that mortgages with Property Assessed Clean Energy (PACE) and PACE-like obligations that provide for first-lien priority are not eligible for sale to Freddie Mac. The only exception is a Freddie Mac Relief Refinance MortgageSM – Open Access subject to the eligibility requirements in Section 24.9 of the Single-Family Seller/Servicer (Guide).
The Industry Letter is being published in light of recent energy retrofit programs announced by certain California counties that permit a first lien position for loans that support energy efficient home improvements.
It is important that you check state and local laws to determine whether a jurisdiction has a PACE program that provides for first lien priority.
We continue to purchase mortgages on properties with PACE and PACE-like obligations, provided that these obligations are in a subordinate lien position and the mortgage meets our other eligibility requirements.