Calhfa Loans Not Eligible For Properties With Pace And Hero Loans.

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#1
California's housing finance agency, one of the popular down payment assistance programs has recently announced they are no longer investing in properties that have a PACE or HERO assessment on the home. PACE and HERO are typically solar financing done a very nifty way. Financing for these programs are done through a property tax adjustment in most cases. The property taxes end up being higher which makes it difficult to qualify a homeowner in certain circumstances unless made aware of the program.

My assumption as to why they are not allowing these assessments is very simply. There is a lien against the property which affects it's equitable position. If a borrower is already receiving down payment assistance in most cases where literally nothing is required for down payment or closing it puts CalHFA at risk if the borrower sells within a certain period of time.

Please make sure to take note of this change as the HERO/PACE programs are becoming increasingly popular. My advice is to stay away from them and pay cash for solar or obtain a HELOC to pay for it rather than basically renting the systems.