WASHINGTON — House appropriators are trying to put the brakes on the Property Assessed Clean Energy program, which finances energy upgrades on homes through Federal Housing Administration-backed loans.

The House Budget Committee approved on Monday a 2018 fiscal budget for the Department of Housing and Urban Development that would prohibit the FHA from "purchasing, insuring or guaranteeing a property that has a PACE loan in the first lien position."

"The committee supports energy efficiency improvements, but not at the expense of [FHA] Mutual Mortgage Insurance fund or general taxpayers," according to the House Transportation-HUD appropriations report.

HUD Secretary Ben Carson
The House appropriations bill would cut HUD's budget by $487 million, a far cry from the $6.2 billion cut sought by the Trump administration and endorsed by HUD Secretary Ben Carson. Bloomberg News

The Mortgage Bankers Association welcomed the move, which it had lobbied for.

"While energy efficient home improvements can be beneficial for some homeowners, these loans pose a grave risk to traditional lien priority and are a serious risk to the FHA program and to consumers," Bill Killmer, the group's senior vice president for legislative and political affairs, wrote in a July 14 letter.

The HUD appropriations bill renews limits on FHA loan guarantees at $400 billion, the same level as last year.

The Trump administration had proposed to cut the FHA's administrative contract expenses by $25 million, but the House bill increased the budget for such expenses, specifically for “system automation, quality control and risk management improvements," according to the budget report.

President Trump has also sought to cut HUD’s budget by 13%, or $6.2 billion, but the House Appropriations Committee bill would decrease the department’s funding by just $487 million, to $38.3 billion, for fiscal year 2018.

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