As part of the above initiative, the Federal Housing Authority (FHA) and the Department of Veteran Affairs announced that they will now insure mortgages on properties that include Property Assessed Clean Energy (PACE) assessments. The agencies issued clear guidance for how single-family homes with PACE assessments can be purchased and refinanced with FHA- and VA-insured mortgage. PACE allows homeowners to finance solar and energy efficiency home improvements at no up-front cost, paying back the loan over time through property taxes. This new guidance gives clarity to state and local governments enacting or adopting PACE legislation, for the first time recognizing PACE as any other property tax assessment.