ICBA Statement on FHA Property Assessed Clean Energy Policy


Washington, D.C. (July 20, 2016)—Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine released this statement on the Federal Housing Administration’s (FHA) policy concerning FHA insurance for mortgages with Property Assessed Clean Energy (PACE) obligations.

“ICBA appreciates the additional clarification of the acceptance of properties securing mortgage loans eligible for FHA insurance which may be encumbered by a PACE obligation used to finance energy improvements.  

“However, ICBA remains concerned that under certain circumstances the PACE lien may supersede the FHA lien, potentially reducing the collateral coverage for lenders, and could increase costs to the FHA insurance fund and taxpayers.  Further, ICBA believes that PACE “loans” may jeopardize borrowers by placing them into obligations that they do not fully understand, may not be able to afford, and are not clearly disclosed.

“ICBA encourages the Secretary to continue to work with all stakeholders to refine its policy regarding PACE obligations to safeguard consumer protections and ensure that borrowers fully understand the scope of their obligation.”

About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.