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Here’s why the FHA has stopped lending on homes with energy-efficient PACE liens

REAL ESTATE TRIVIA: Before the FHA was created in 1934 ... A crisp green salad would be nice, which is where Cucumber, West Virginia comes in. Top it with the zesty red dressing of Catalina, the tiny island city off the coast of Southern California.

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By David WMyers Cowles Syndicate Inc. $(window).scroll(function() { var windowCurrentPos = $(window).scrollTop(); var scrollTopPos = $("#story-body-items").offset().top-50; var scrollEndPos = $("#commenting-container").offset().top; if(windowCurrentPos >= scrollEndPos || windowCurrentPos MYERS: We bought our home in 2015 with a Federal Housing Administration loan, and then added a new solar-panel system and made some other energy-saving improvements with a PACE loan earlier this yearNow, we’ve heard that the FHA will no longer insure mortgages that have a PACE assessmentSo, where does that leave us? Are we going to have to refinance our current FHA mortgage with a non-FHA lender? ANSWER: Don’t worryAlthough the federal government recently announced that it will no longer provide FHA loans on properties that also are encumbered by a PACE lien, the new policy won’t affect homeowners who already have a PACE assessment in place. PACE loans were created several years ago to fund energy-efficient home-improvementsThe various programs are typically operated by local governments but funded by private-sector banks or other companies. These offbeat loans usually don’t require any monthly paymentsInstead, the regularly scheduled payments are tacked on to the borrower’s property-tax bill, and the owner pays them as a line item when their annual or semi-annual bill comes due – just as they would for street improvements and the like. (function() { var randomUrl = getRandomUrl(',,'); var eventMethod = window.addEventListener ? "addEventListener" : "attachEvent"; var eventer = window[eventMethod]; var messageEvent = eventMethod == "attachEvent" ? "onmessage" : "message"; $("", { "class" : "col-xs-12", "src" : randomUrl, "scrolling" : "no", "frameborder" : "no" }).appendTo("#newsletter-signUpWidget"); eventer(messageEvent, function(e) { if (randomUrl.indexOf(e.origin) != -1 ) { var key = e.message ? "message" : "data"; var data = JSON.parse(e[key]); switch(data.messageid) { case 100: var signupevent = new CustomEvent( 'signup', {"detail": data} ); window.dispatchEvent( signupevent ); break; case 200: $('#newsletter-signUpWidget iframe').css('height', data.iframe.height); break; } } }, false ); })(); Never miss a local story. Sign up today for unlimited digital access to our website, apps, the digital newspaper and more. SUBSCRIBE NOW The repayment process, though, can lead to some serious problems The first is that, if the tax bill goes into default and the tax collector must foreclose, the PACE lien must be paid off first from the tax sale’s proceedsThe lender that issued the 30-year mortgage for the borrower to purchase the house earlier would get only “second-dibs” on the proceeds from the sale, which means it would suffer a loss if the property didn’t sell for a price that’s high enough to cover the PACE loan, the original mortgage and related costs. In many instances, even if sellers with a PACE lien can find a buyer before going into foreclosure, the lien is effectively transferred to the new buyersThe buyers then are obligated to make those payments through their property-tax bills, again putting the bank that issued the purchase mortgage at risk if the buyers default later. The Federal Housing Administration’s home-loan program is financed by government funds, which means it depends on taxpayer dollarsWhen the FHA loses money on the sale of a home, all of us do. FHA acknowledged that fact when announcing its new restrictions on PACE-encumbered properties earlier this month, noting in a statement that the agency “can no longer tolerate putting taxpayers at risk by allowing [lien] obligations like these to be placed ahead of the mortgage itself in the event of a default.” Most consumer groups applauded the FHA’s decision, but said that the agency needs to go much fartherTheir “wish list” includes a lower cap on the rate that PACE lenders can charge, better state and federal regulation, and a ban on contractors and salespeople who make unfounded promises that the cost of the owner’s energy-saving improvements will soon be recouped through lower monthly utility bills. REAL ESTATE TRIVIA: Before the FHA was created in 1934, most home loans carried a payback term of only three to five yearsA lump sum in cash to pay off the loan was then due, and the term “refinancing” hadn’t even been invented yet. DEAR MRMYERS: What is a “one-hour door”? ANSWER: It’s a fire-resistant door that can hold back a blaze for a minimum of 60 minutesSome manufacturers and builders also offer one-hour walls. DEAR MRMYERS: My kids and I drove across the country for our fall vacation this year and passed through a town in Texas called “Turkey.” We didn’t see any turkeys thereWhat gives? ANSWER: There still are some turkeys around there, even if you didn’t see themThe town (population: 400) in the Texas Panhandle was named after settlers in the 1890s, who were greeted by huge flocks of the big birds from nearby Turkey Creek. The tiny town is best-known as the home of the late country singer Bob Wills, the “King of Western Swing.” Turkey also is one of the more than 100 U.Stowns whose names might have appeared in your holiday feastIf you enjoyed a smaller dinner, you might want to visit Chicken, AlaskaOr you might want get a nice slab of ham in Pig, Kentucky. No great meal can begin without an appetizerStart with a fruit plate from Citrus Heights, California, and cheeses from the fine cities of Colby, Wisconsin and Monterey, CaliforniaThey’re good with a glass of bubbly from Champaign, Illinois. A crisp green salad would be nice, which is where Cucumber, West Virginia comes inTop it with the zesty red dressing of Catalina, the tiny island city off the coast of Southern California. Of course, you’ll need to have some side dishes to complement the entreeCorn, Oklahoma, would be a good place to startOr maybe Spuds, Florida; Rice, Texas; or Fries, Virginia. Dessert could come from Cookietown or Pietown, both in New MexicoThey also make terrific sweet treats in Sugar Land, TexasWash them down with a cup of java from Hot Coffee, Mississippi, or a spot of Tea, South Dakota. David WMyers’ column is distributed by Cowles Syndicate Inc !function(){var TOUT=window.TOUT=window.TOUT||{},utils={getCanonicalLinkHref:function(){for(var links=document.getElementsByTagName("link"),i=0;i-1}}}(); !function(){var TOUT=window.TOUT=window.TOUT||{};if(console&&console.log&&console.log("Tout SDK: "+ +new Date),!TOUT._sdkScriptTagParsedAt){TOUT._sdkScriptTagParsedAt=new Date,TOUT.EMBED_CODE_VERSION="1.2.0";var sdkHost=TOUT.SDK_HOST||"",sdkProtocol=TOUT.SDK_PROTOCOL||("https:"==window.location.protocol?"https:":"http:"),analyticsHost=TOUT.SDK_ANALYTICS_HOST||"",analyticsProtocol=TOUT.SDK_ANALYTICS_PROTOCOL||sdkProtocol;TOUT.onReady=TOUT.onReady||function(func){return TOUT._onReadyQueue=TOUT._onReadyQueue||[],TOUT._onReadyQueue.push(func),TOUT},TOUT.fireSimpleAnalyticsPixel=function(trigger_name,attrs){var img=new Image,url=analyticsProtocol+"//"+analyticsHost+"/events?trigger="+trigger_name;for(var attr in attrs)attrs.hasOwnProperty(attr)&&(url+="&"+attr+"="+encodeURIComponent(attrs[attr]));return img.src=url,img},TOUT.init=function(brandUid,options){options=options||{};var sdkScriptId="tout-js-sdk";if(document.getElementById(sdkScriptId)&&!options.forceInit)return TOUT;if(brandUid=TOUT.SDK_BRAND_UID||brandUid,"undefined"==typeof brandUid||"string"!=typeof brandUid||0===brandUid.length||brandUid.length>7)return TOUT.fireSimpleAnalyticsPixel("sdk_log",{log_level:"error",log_message:"BRAND_UID_NOT_DEFINED",content_page_url:window.location.href}),console&&console.error&&console.error("TOUT - Invalid Brand UID: "+brandUid),TOUT;TOUT._initOptions=options;var script=document.createElement("script");script.type="text/javascript",script.src=sdkProtocol+"//"+sdkHost+"/sdk/v1/"+brandUid+".js",,script.className="tout-sdk";var firstScript=document.getElementsByTagName("script")[0];return firstScript.parentNode.insertBefore(script,firstScript),TOUT.fireSimpleAnalyticsPixel("sdk_initialized",{content_brand_uid:brandUid,sdk_embed_code_version:TOUT.EMBED_CODE_VERSION,content_page_url:window.location.href}),TOUT}}}(); (function(){ var brandUid = "9e1338"; TOUT.mapAsyncFetchApp.init(brandUid); TOUT.init(brandUid); TOUT.mapAsyncFetchApp.fetch(); })(); ! function() { var tagalongWidth = 325; if (window.innerWidth 320 && window.innerWidth 768 && window.innerWidth 325) { tagalongWidth = 325 } document.body.addEventListener('ToutSDKLoad', function(evt) { //wait for SDK to load TOUT.model.setMixinSettings('TagAlong', { //change width of tagalong unit before player is created popoutWidth: tagalongWidth }) }) }(); Suggested for you lazyLoadingModule("zerg-template", "zerg-target", "zerg",500, undefined, undefined, undefined, "53333", undefined , undefined );   Comments   Needs to be visible to set the correct height of the comment componentI'm hiding it on document readyAppending it later did not work--> (function(){ var $commentingContainer = $('#commenting-container'), $commentContainerChevron = $commentingContainer.find(".glyphicon-chevron-down"), $fbComments = $("#fb-comments"); if($("meta[property='fb:app_id']").length === 1 && $("meta[name='allow-comments']").prop("content") === "true") { $commentingContainer.on('click', 'a.comments-toggle', function(){ if (typeof mi.commenting === "undefined") { mi.commenting = new mi.Commenting(); mi.commenting.setConf( { accountName: mi.pageInfo.getConf('marketInfo.domain'), fbapp_id: mi.pageInfo.getConf(''), fb_comment_div: {'data-width': '100%'} }); mi.commenting.display(); FB.XFBML.parse(document.getElementById("fb-comments")); } toggleComments(); }); $(document).ready(function(){ toggleComments(); }); } else { var disabledText = 'Comments have been disabled for this story.'; $fbComments.prepend("" + disabledText + ""); } //toggleClass() wasn't working in IE the first time if it has the class function toggleComments(){ if ($fbComments.hasClass('in')) { $fbComments.removeClass('in'); $commentContainerChevron.removeClass("rotate"); }else { $fbComments.addClass('in'); $commentContainerChevron.addClass("rotate"); } } })(); Videos More Videos Video Link copy Embed Code copy Facebook Twitter Email How many Whatcom County businesses closed in 2017? More brick-and-mortar stores closed in Whatcom County this year than any time since 2009, according to an informal survey by Business Editor Dave Gallagher of The Bellingham Herald. if ( typeof allowAds === 'undefined' ) { var allowAds = true; } wpsRequire([ 'video' ], function ( video ) { return[{"id":"190910264","asset_type":"videoIngest","url":"","duration":"0:50","image":"//","title":"How many Whatcom County businesses closed in 2017?","description":"How many Whatcom County businesses closed in 2017? 0:50","displayDescription":"More brick-and-mortar stores closed in Whatcom County this year than any time since 2009, according to an informal survey by Business Editor Dave Gallagher of The Bellingham Herald.","videographer":"Jim Donaldson","credit":"","published":1514059200,"sources":[{"file":"//"},{"file":"//"},{"file":"//"}],"mediaid":"uGxiOoSp","ads":[{"publication":"bellinghamherald","tag":"//","lang":"en","sz":"400x300","vpos":"preroll","cust_params":"sect=business&id=190910264&eid=192190684&vidlength=short&pl="}]},{"id":"186347298","asset_type":"videoIngest","url":"","duration":"1:36","image":"//","title":"Crowds, discounts and marathon shopping — Black Friday 2017 is here","description":"Crowds, discounts and marathon shopping — Black Friday 2017 is here 1:36","displayDescription":"More than half of America plans to shop this holiday weekendThe discounts may not be as good as last year, but that's not stopping the 164 million who say they'll shop online or visit a store.","videographer":"Nicole LCvetnic and Caitlin Healy","credit":"McClatchy","published":1511548353,"sources":[{"file":"//"},{"file":"//"},{"file":"//"}],"mediaid":"NCOwHX9n","ads":[{"publication":"bellinghamherald","tag":"//","lang":"en","sz":"400x300","vpos":"preroll","cust_params":"sect=business&id=186347298&eid=192190684&vidlength=long&pl="}]},{"id":"184805118","asset_type":"videoIngest","url":"","duration":"1:43","image":"//","title":"Domino's and Ford try driverless pizza delivery","description":"Domino's and Ford try driverless pizza delivery 1:43","displayDescription":"No tipsNo small talkSelf-driving cars are surprising some Domino's customers with pizza deliveriesThe company is working with Ford to experiment with applications for autonomous driving technology.","videographer":"","credit":"","published":1510779757,"sources":[{"file":"//"},{"file":"//"},{"file":"//"}],"mediaid":"dOf0Ai35","ads":[{"publication":"bellinghamherald","tag":"//","lang":"en","sz":"400x300","vpos":"preroll","cust_params":"sect=business&id=184805118&eid=192190684&vidlength=long&pl="}]}], {"wpsInclude":false,"wpsArea":null,"autoPlay":false,"pubName":"bellinghamherald","embed":false,"cacheBust":"77bbab1","iterator":10,"uniqueID":"-1514701566366","paywallEnabled":true,"domainName":"","pubId":"43","baseTemplate":"story"}, [], true ); }); 7 days ago How many Whatcom County businesses closed in 2017? 0:50 7 days ago How many Whatcom County businesses closed in 2017? 1:36 a month ago Crowds, discounts and marathon shopping — Black Friday 2017 is here 1:43 2 months ago Domino's and Ford try driverless pizza delivery View More Video Business Here are seven key stories that show Whatcom’s economy moved beyond recovery in 2017

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