There is new hope for the PACE financing program (the acronym stands for: “property-assessed clean energy”). The PACE program was started in Berkeley, CA in 2007 and made loans available to homeowners to help defer the cost of renewable energy/energy efficiency equipment and installations. The loan funds come from municipalities who raise the money through bonds and is paid back through assessments on the homeowner’s property tax bill. This innovative program has a huge benefit: the loan stays with the home and the homeowner can transfer the loan to a buyer on a sale of the home.
About 20 other states saw the benefit of the California program and passed some sort of PACE legislation by the first quarter of 2010. The Obama administration supported PACE programs with the Department of Energy awarding more than $150 million in federal stimulus funds to back the program.
But last September, Fannie Mae and Freddie Mac announced if a homeowner wanted to refinance or sell their home, the PACE loan had to be paid off in full. This effectively halted all PACE activity and the application of federal stimulus funds.
Last week, the National Resources Defense Council (“NRDC”) filed a lawsuit in a New York federal district court against the (a) Federal Housing Finance Agency (“FHFA”), which regulates Fannie Mae and Freddie Mac, and (b) the Office of the Comptroller of the Currency (“OCO”), which regulates national banks. The NRDC’s complaint protests the cessation of the PACE program and alleges that the FHFA and the OCO put a stop to the programs without solid justification and without following the proper legal protocols (which would include an environmental review and getting public comment).
We will continue to follow the story and you can read a copy of the complaint here: http://docs.nrdc.org/energy/files/ene_10100601a.pdf.