On Friday afternoon (6/15/12), FHFA released proposed rules (again) restricting Fannie & Freddie from holding mortgages on properties encumbered by Property Assessed Clean Energy (PACE) loans. PACE loans have been authorized in Florida for several years and recently over $2 Billion of PACE bonds were approved.
Here are the key provisions of the proposed rule:
(a) The Enterprises [Fannie/Freddie] shall immediately take such as actions as are necessary to secure and/or preserve their right to make immediately due the full amount of any obligation secured by a mortgage that becomes, without the consent of the mortgage holder, subject to a first-lien PACE obligation. Such actions may include, to the extent necessary, interpreting or amending the Enterprises’ Uniform Security Instruments.
(b) The Enterprises shall not purchase any mortgage that is subject to a first lien PACE obligation.
(c) The Enterprises shall not consent to the imposition of a first-lien PACE obligation on any mortgage.
The entire Federal Register report can be found here