Property Assessed Clean Energy (PACE) programs allow local governments to loan money to homeowners to do energy efficiency projects. The PACE loans are generally repaid as a property tax line item. PACE programs were initially very popular, and more than 25 states passed PACE-enabling legislation.
Since the Federal Housing Finance Agency (FHFA) announced it wouldn’t be backing PACE loans for residential projects a year ago, the buzz around PACE financing has died down. However, many don’t realize that this development only slowed commercial PACE financing by a small measure. In
In the case of the federal government overreach on property assessed clean energy (PACE) financing — this overreach — Fannie, Freddie, and the FHFA (Federal Housing Finance Agency) took issue with the fact that the PACE lien on the property is senior to the mortgage. To recap, a senior lien is the thing that really gives PACE its value and is well explained here.
The Natural Resources Defense Council (NRDC) sued the Feds this week to reinstate the PACE program. The PACE program was a component of the Recovery Act, which allowed the upfront costs of property owners’ clean energy and energy efficiency projects to be financed by local governments, and paid back by homeowners as an increase in their
Fannie Mae and Freddie Mac have already put a halt to many state clean energy and energy retrofit programs affectionately known as Property Assessed Clean Energy (PACE) or PACE like obligations. In July, California Attorney General and candidate for Governor, Jerry Brown, filed a lawsuit against Fannie Mae and Freddie Mac alleging that Fannie Mae and Freddie Mac
By now, you’ve seen us talk plenty about PACE, the popular finance model that helps property owners overcome the upfront costs of green retrofits and boosts local job growth in the process. (In case you have missed it, welcome back, and check our PACE resource page for more info). You’ve probably also heard that Fannie Mae and Freddie Mac issued letters suggesting that property owners they lend to may be prohibited from participating in PACE programs (not insignificant considering that together these two organizations back around half of U.S. home mortgages). Then just last week, the lenders’ regulators at the Federal Housing Finance Authority (FHFA) issued a statement
For the last two months, energy auditors, energy efficiency experts, solar installers, and homeowners have been waiting and clamoring for more guidance from Fannie Mae and Freddie Mac. It was in May that Fannie Mae and Freddie Mac abruptly and without justification changed their policy on the treatment of property tax assessments made pursuant to Property Assessed Clean Energy (PACE) programs. Originally, Fannie Mae and Freddie Mac had decided to treat these assessments like any other assessment, but in May, decided to treat them as