Last month, HUD and the Federal Housing Administration announced that the FHA will soon begin insuring mortgages that also carry liens created by energy retrofit programs. Through the loans created by the Property Assessed Clean Energy program, or PACE loans, home owners can get financing to make energy-efficient upgrades to their homes, according to HousingWire's Ben Lane.

And the FHA’s new PACE rules state the FHA will now approve purchase and refinance mortgage applications in states that treat PACE obligations as special assessments similar to property taxes.

That has industry groups concerned.

But that arrangement has the Mortgage Bankers Association, the National Association of Realtors, the Appraisal Institute, and several other large trade groups worried about the potential for PACE loans to be given super priority loan status, despite the FHA’s rules being designed to avoid that specific issue.

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