Treasury Department hits PACE homeowners by Todd Woody published
on Grist on July 7, 2010
On Tuesday, the Federal Housing Finance Agency effectively shut
down an innovative green financing program called Property
Assessed Clean Energy, or PACE, by restricting the ability of
homeowners to take out loans to install solar panels and make
other energy efficiency improvements.
Now the United States Treasury Department has piled on. A new
Treasury directive tells the nation's banks how to enforce the
FHFA rules. The move could pose new problems for homeowners who
have PACE loans, and complicate efforts to get the program back
on track.
Homeowners repay PACE loans through an annual assessment on
their property taxes. On Tuesday, the Treasury Department told
banks that if a homeowner has a home equity line of credit, the
amount of money available should be lowered to account for the
loan liability. The Treasury also said homeowners could be
required to put their PACE payments in an escrow account.
After Fannie Mae and Freddie Mac, the government chartered
mortgage finance giants, raised concerns about PACE in May, some
lenders declined to refinance mortgages that carried PACE liens.
Owners of commercial properties who hold PACE loans may need to
put up additional collateral to back up the loan, according to
the Treasury Department letter.
Cisco DeVries, president of Renewable Funding, an Oakland,
Calif., company that designs and administers PACE programs for
local governments, said he wants to make sure PACE loans for
commercial owners won't be curtailed.
"We believe PACE commercial can go ahead as it has always
required lender consent when a commercial mortgage is in place,"
he wrote in an email. "We just want to make sure we don't run
into an unexpected problem as we move forward."
Some municipalities sell bonds to finance energy-efficiency
loans for homeowners. But they may find that harder to do under
the Treasury Department directive, which warned banks to move
cautiously when underwriting such bonds.
Read more
http://www.grist.org/article/treasury-department-hits-pac...
"Fannie and Freddie to clean-energy program: Drop dead" by
Jonathan Hiskes published on Grist on July 6, 2010
Grist has been covering Fannie Mae and Freddie Mac's attack on
Property Assessed Clean Energy (PACE), a promising tool that
helps homeowners finance green improvements to their properties.
Here's the latest:
On Tuesday, Fannie Mae and Freddie Mac ended their radio silence
nine weeks after sending cryptic letters warning lenders against
permitting the use of Property Assessed Clean Energy (PACE) --
but it wasn't the follow-up PACE advocates were hoping for.
The government-chartered mortgage giants are sticking with their
puzzling opposition to the finance tool, effectively killing
PACE programs around the country, at least for the time being. A
letter from the Federal Housing Finance Agency [PDF], the
regulator and spokes-agency for Fannie and Freddie, claims PACE
programs "present significant safety and soundness concerns that
must be addressed by Fannie Mae, Freddie Mac, and the Federal
Home Loan Banks."
FHFA's letter amounts to a middle finger to PACE, which has
drawn excitement from clean-energy advocates, home-improvement
contractors, and homeowners who want to use the system to pay
for projects like rooftop solar arrays and retrofits that cut
energy waste.
Bottom line: It's now up to Congress to break through the
impasse, as PACE creator Cisco DeVries suggested last Friday.
Which means don't hold your breath for a quick resolution. With
energy and climate legislation, offshore-drilling reform,
finance reform, unemployment benefits, and untold other
important matters all awaiting action from our action-averse
Senate, it's a major bummer that PACE now has to wait in line.
That said, Long Island Rep. Steve Israel (D) is already working
on legislation to reanimate PACE.
Read more:
http://www.grist.org/article/2010-07-06-fannie-and-freddi...