FHA Should Reconsider Its About-Face—About PACE

The Rocky Mountain Institute (RMI) argues that the Federal Housing Administration's (FHA) decision to stop insuring new mortgages on homes with property assessed clean energy (PACE) loans is misguided. RMI contends that the FHA overstates the risks of PACE while ignoring the significant default risks associated with high energy costs in inefficient homes.

• The Federal Housing Administration (FHA) announced it will no longer insure new mortgages on homes with property assessed clean energy (PACE) loans, citing concerns that consumer protections for PACE origination are "far less comprehensive than that of traditional mortgage financing products."
• RMI argues that the FHA's decision ignores the financial risk posed by inefficient housing. A University of North Carolina’s Center for Community Capital study using CoreLogic data found that default risks are 32 percent lower in energy-efficient homes on average; conversely, non-efficient homes have a 47 percent greater default risk.
• Residential PACE (R-PACE) has financed $4.2 billion in home energy improvements and created over 36,000 jobs in enabled states. Since 2008, it has financed more than 158,000 retrofits across three states, with significant growth in California, Florida, and Missouri.
• PACE financing often addresses urgent needs; a 2017 Research Into Action study found that 37 percent of PACE financing is used for emergency repair or replacement, and 23 percent is used for items likely to fail in the near future.
• RMI suggests that instead of restricting PACE, the FHA should help integrate energy use into the appraisal process to better reflect the real cost of homeownership and reduce default risks.

APA

RMI (2017). FHA Should Reconsider Its About-Face—About PACE. https://rmi.org/resources/fha-reconsider-face-pace/

Chicago

RMI. FHA Should Reconsider Its About-Face—About PACE. 2017. https://rmi.org/resources/fha-reconsider-face-pace/.

Wikipedia

{{cite press release |author=RMI |title=FHA Should Reconsider Its About-Face—About PACE |date=14 December 2017 |url=https://rmi.org/resources/fha-reconsider-face-pace/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{rmi2017fha, author = {{RMI}}, title = {{FHA Should Reconsider Its About-Face—About PACE}}, publisher = {RMI}, year = {2017}, month = dec, url = {https://rmi.org/resources/fha-reconsider-face-pace/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }