PACE – Frequently Asked Questions

What are the operative dates of the new laws and how are we expected to comply?

AB 1284 was an urgency bill and some provisions, like the name change to the law, became effective immediately.
Many provisions of AB 1284 and SB 242 became operative on January 1, 2018, and some underwriting provisions become operative on April 1, 2018. A summary of the operative dates can be found here.
The requirement to be licensed by DFPI is effective January 1, 2019.
PACE program administrators must comply with the law and each new requirement as it is operative.
Prospective licensees should comply with underwriting provisions on and after the operative date of those provisions.

The DFPI does not intend to promulgate regulations in this area in advance of other rulemaking.
Prospective licensees should comply with the plain language of the underwriting statutes as they become operative, just as they would do had the underwriting requirements appeared in a part of the code that wasn’t under the jurisdiction of a regulatory body with rulemaking authority.
During regulatory examinations, the DFPI will ensure that licensees are in compliance with the plain language of the statute as of the date it became operative. If a licensee is doing so, the DFPI will not cite the licensee for a violation of the California Financing Law (CFL).
However, when the Department’s rules become effective, every licensee must comply with the regulations as of that date.

The Federal Housing Administration (FHA) has changed its policy on insuring home mortgages secured by properties with PACE liens. Under the Obama Administration, FHA would insure home mortgages on a property with an existing PACE lien, if the PACE assessment payments were current, and a default of a payment would not result in the entire principal amount of the assessment coming due. With the change to FHA’s policy (effective January 1, 2018), a borrower will now have to pay off the entire PACE obligation and remove the PACE lien to be eligible for an FHA-insured mortgage (whether a refinance or a home purchase).

A property owner may search the Department’s records of enrolled PACE solicitors and PACE solicitor agents to determine whether a PACE solicitor or PACE solicitor agent is currently enrolled with a program administrator. Search for an Enrolled PACE Solicitor. Search for an Enrolled PACE Solicitor Agent.