The Department of Housing and Urban Development will no longer allow financing on properties where energy efficient improvement liens will remain in place.

On Title II forward mortgages that are insured by the Federal Housing Administration, HUD began allowing financing of homes with Property Assessed Clean Energy loans last year.

But FHA is concerned that the priority lien status of PACE loans in the event of a default has the potential for increased losses to its Mutual Mortgage Insurance Fund.

Source: Mortgage Daily