We’ve been following the development of Property Assessed Clean Energy (PACE) financing here on SustainableBusiness.com for the last few years.
Originating in Berkeley, California, PACE financing allows homeowners to pay for energy efficiency retrofits or renewable power systems through an assessment to their local property tax bill.
The program allows the cost of the system to remain with the home, if the owner sells–the new owner takes over the payments.
The idea is spreading quickly across the country, with 22 states clearing the way for local communities to provide the up-front funding through bonds. On the federal level the Obama administration provided $100 million in recovery funding to PACE.
But it has all come to a halt due to Fannie Mae and Freddie Mac, the government-sponsored mortgage-finance corporations that were at the center of the mortgage crisis that helped trigger economic meltdown in 2008.
On May 5, Fannie and Freddie sent a letter to lenders warning them to avoid PACE programs over concerns about what happens if a homeowner defaults on a mortgage.
Jonathan Hiskes covers the story on Grist at the link below.
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