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.
Will the DFPI draft underwriting regulations before April 1, 2018? How am I supposed to comply with the underwriting requirements when the regulations are not yet drafted?
- 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.
Will the regulations be emergency regulations?
- At this time, there is no plan to promulgate emergency regulations.
What is the Federal Housing Administration’s new policy related to PACE?
- 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).
How can a property owner confirm whether a PACE solicitor or PACE solicitor agent is enrolled with a program administrator?
- 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.
Key Consumer Links