How to Refinance a Home with a (PACE) HERO loan
FHA will not allow borrowers to refinance paying off a PACE obligation as a rate and term refinance.
FHA issued Mortgagee Letter 2017-18 , setting forth revised policies for insuring mortgages secured by 1- to 4- family properties encumbered with Property Assessed Clean Energy (PACE) obligations. Per the Mortgagee Letter, properties encumbered with a PACE obligation will no longer be eligible for FHA-insured forward mortgages. The Mortgagee Letter also clarifies that PACE obligations are existing debt that may be paid off using a Rate and Term Refinance. Current policies allowing the use of a Cash-Out refinance to pay off PACE obligations remain unchanged.
The revised policies are effective for case numbers issued on or after January 6, 2018.
I am one of the few mortgage lenders in California that can help homeowners refinance a home with a PACE (HERO) loan. Call me today at (888) 777-3671 or fill out the quote request so we can look into how we can get you out of this bad program, lower your payments, and solidify your tax deduction."