Freddie Mac Industry Letter Regarding Mortgages with PACE
On August 20, Freddie Mac released an Industry Letter regarding mortgages with PACE.
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 (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.
For More Information
- August 20, 2014, Industry Letter.
- Guide Bulletin 2010-20 and Bulletin 2011-2.
- May 5, 2010, Industry Letter.
- July 6, 2010, FHFA Statement on Certain Energy Retrofit Loan Programs.
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