Freddie and Fannie Take a Stand on PACE
Property Assessed Clean Energy (PACE) programs, which offer homeowners a method of paying for the installation of solar panels and other energy efficiency upgrades through municipal finance, have become extremely popular across the country. So popular, in fact, that the U.S. Department of Energy intends to contribute $150 million in stimulus funds to help continue and expand PACE programs and give an economic boost to companies that install energy systems.
Recently, however, Fannie Mae and Freddie Mac informed mortgage lenders that they would not subordinate their mortgages to the lien of an assessment for solar facilities. As many local and state officials have noted, the liens that secure PACE loans are no different than other types of special property taxes, like those used to finance sidewalks and underground utilities, which have previously been approved by Freddie and Fannie.
State and local officials, including California Governor Arnold Schwarzenegger, New York City Mayor Michael R. Bloomberg, and some members of Congress, are pressing the Federal Housing Finance Agency, which oversees Fannie and Freddie, for clarification of its position on the financing programs. Stay tuned.
