Green-improvement Loans May Cause Problems for Consumers

A story in the Press-Enterprise highlights some of the difficulties real estate agents and consumers are having when it comes time to refinance or sell a home with a HERO or PACE loan. The Property Assessed Clean Energy, or PACE, program upgrades include HERO loans. The HERO program allows a homeowner to install “green” improvements at a low out-of-pocket costs, but with a payment program attached to a homeowner’s property-tax bill.

Real estate professionals say well-meaning green energy loan and lease programs crafted to put idled contractors to work and pump up home values need to be scrutinized carefully. The new, energy-efficient products to lower utility payments and increase the value of a home are written into property tax bills as an added assessment, and payments can stretch out for up to 20 years. The cost, plus an administrative fee, and interest, is tax-deductible. But it also takes a first-lien position.

The first-position is so important the Federal Housing Finance Agency prohibits Fannie Mae and Freddie Mac from purchasing mortgages or notes with PACE liens. Months ago, an FHFA statement pointed out the risk first-lien status poses to taxpayers, real estate agents, banks, and homeowners about the marketability of a house.

More info here--
http://www.pe.com/articles/hero-768415-program-home.html?page=1

Comments

Post a Comment

Popular posts from this blog

Historical Average and Median Prices for Detached Homes in Fremont

Image
A request from a client to run a historical chart of the average and median prices for detached homes in Fremont last year has opened a lot of conversations.  This is the first time since BayEast MLS started recording sales data in 1997 that Fremont's average detached home (aka: single family homes) sale has officially reached the $1M mark.  As always, I don't have a crystal ball, I'm not a lawyer or accountant, so I can't interpret this chart for you.  This chart has NOT been adjusted for inflation, this is just the raw sales average and median prices.
Read more

San Leandro Rent Control Update

In a surprise move on Dec. 7, 2015, the San Leandro City Council voted to expand their current Rent Review ordinance to apply to single family homes and condominiums. A final decision was scheduled for  Dec. 21 , but after testimony from tenant advocates and property owners, the council ultimately decided to delay taking action. TODAY, the council will make a final decision on the expanded ordinance. If single family homes and condos are included it could place a burden on property owners, unintentionally cause rents to increase and inspire other communities to consider rent control ordinances. While city staff are recommending to keep single family homes and condos out of the ordinance we anticipate tenant advocates and at least two city council members will work to have the ordinance cover all residential units.   If you manage rental property in San Leandro, particularly single family homes or condos, please attend the city council meeting TODAY!
Read more