How does a PACE obligation affect the value of my property?

The impact of the Property Assessed Clean Energy (PACE) obligation and the improvements financed on the property value must be determined by a qualified appraiser.  There are a variety of factors that can affect property value, including the local neighborhood and housing market.  In an FHA transaction, where the Mortgagee determines that the Property is subject to a PACE obligation, it must notify the Appraiser that the PACE obligation will be paid off as a condition of loan approval.

The appraiser will determine the value, subject to the PACE obligation being extinguished.

For additional information see Handbook 4000.1 II.A.1.a.iii(B)(6)(e) available at:



All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-03421