photo via flickr
The Property Assessed Clean Energy (PACE) program allows homeowners to finance their own solar panels or energy-savings retrofits by an addition to their property tax bill, but Fannie Mae and Freddie Mac have shut down the program. The Obama administration has tried through the Department of Energy to change the practices of the Federal Housing Finance Agency, which runs Fannie and Freddie, but thus far they have been unsuccessful. The rational from Fannie and Freddie seems to be that they don't want taxpayers to be on the hook for the retrofits if the mortgage holders default. Property taxes take precedent over mortgages. Fannie and Freddie hold just over half of the mortgages in the country.
On Friday, Representatives Henry Waxman, chairman of the House Committee on Energy and Commerce, and Representative Barney Frank, chairman of the House Committee on Financial Services, sent a letter to Treasury Secretary Timothy F. Geithner, Energy Secretary Steven Chu and Edward DeMarco, the acting director of the Federal Housing Finance Agency, asking them to reverse the decision.
"It is our hope that your offices can quickly identify, agree on and publish guidelines that would allow PACE financing programs to continue while ensuring that both taxpayer and private mortgage investments are protected.
"In the meantime, we ask that homeowners participating in the pioneering PACE programs already in operation be immediately assured that they are not in violation of their loans."
The Stimulus package, passed soon after Obama took office, set aside about $150 million for the PACE program. Twenty-states have passed laws supporting PACE, but if Fannie and Freddie pull out, they program appears doomed.