Has PACE-related valuation guidance been issued to appraisers?

The Appraiser must review the sales contract and property tax records for the Property to determine the amount of any outstanding PACE obligation:

•    if the Mortgagee notifies the Appraiser that the subject Property is subject to a PACE obligation; 
•    when the Appraiser observes that the property taxes for the subject Property are higher than average for the neighborhood and type of dwelling; or 
•    when the Appraiser observes energy-related building components or equipment or is aware of other PACE-allowed improvements during the inspection process. 

The Appraiser must report the outstanding amount of the PACE obligation for the subject Property. 

Where energy and other PACE-allowed improvements have been made to the Property through a PACE program, the Appraiser must analyze and report the impact on the value of the Property from the PACE-related improvements subject to the PACE assessments being extinguished.

For additional information see Handbook 4000.1 II.D.12.d.iv(B) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh 

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-03477