The Federal Housing Finance Agency (FHFA) issued guidance yesterday that drew a line in the sand
against municipal energy financing, a.k.a. Property Assessed Clean
Energy (PACE) programs. These innovative initiatives provide energy
efficiency retrofits for homeowners that are repaid through a property
tax assessment. Since homeowners falling behind on payments must repay
their PACE assessment before their mortgage, giant lenders Fannie Mae
and Freddie Mac will consider participating households in default on
their mortgages for receiving an energy efficiency retrofit via PACE. Their rationale is paper thin.
