The first rating agency has weighed in on the Federal Housing Administration’s endorsement last month of loans that finance energy efficient home improvement.

The FHA’s endorsement comes with a catch: the liens of Property Assessed Clean Energy (PACE) loans must be subordinate to those of home mortgages. In the past, rating agencies have argued that PACE liens are essentially tax assessments, making them senior to the liens of mortgage holders.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.