Utilizing PACE programs to make energy improvements will result in the property not being eligible for FHA insurance where the PACE obligation will remain after closing. There are a variety of other options available to finance energy efficient improvements, including Home Equity Lines of Credit, leasing, or other programs.
Many states and lenders offer financing options for energy efficient improvements. It is very important that consumers take the time to become informed and select the best financing option.
Each borrower should talk to his or her lender and compare the terms and costs of the various financing options to determine what is best for his or her situation and needs.
For additional information see Handbook 4000.1, Section II.A.1.b.iv.(A)(6) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh