On July 6, the FHFA issued a statement expressing its determination that Property Assessed Clean Energy (PACE) programs present significant safety and soundness concerns that must be addressed by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks as well as other mortgage market participants. Under PACE programs, these PACE loans often acquire lien priority over existing mortgages.  The FHFA cautions that first liens for these loans represent a key alteration of traditional mortgage lending practice and present significant risk to lenders and secondary market entities. Release.