“PACE Doesn’t Put Lenders at Risk,” Study Says

A recent post by Katherine Tweed in Greentech Media reports the results of a study intended to determine if having a PACE Assessment on the property adversely affects the existing mortgage lender. Here are a couple of excerpts (read the full post here):

One of the outstanding questions is this: if a home with a PACE lien goes into foreclosure, would the lender be worse off than if the home had no PACE lien?

A new study offers the first answer to this. The study by economist Laurie Goodman compared sales of homes with PACE retrofits to similar non-PACE homes….

When compared to comparable homes in the zip code, the researchers found that PACE offered a sale premium of between $200 to more than $8,000….

While the study was limited to a sample of 770 homes,

Even with the limitation of the small data set, the takeaway is that homes with PACE improvements see a price premium that at least covers the cost of the improvement and perform at least as well as the general market, according to Goodman, lead author of the study. For the few homes with PACE financing that went into foreclosure, they also garnered a price premium.

The article also notes that:

In Washington, D.C., the U.S. Department of Housing and Urban Development (HUD) has approved the use of PACE for a HUD-assisted mixed-finance public housing property for the first time. The Phyllis Wheatley YWCA will receive $700,000 in financing secured through the DC PACE program. Washington, D.C. has already been a leader in multi-family PACE financing, being the first jurisdiction to use PACE for that sector two years ago.

(Source: http://www.greentechmedia.com/articles/read/pace-doesnt-put-lenders-at-risk-study-finds?)

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