The battle for PACE financing continues with the recent complaint filed against the Federal Housing Finance Agency (FHFA) by the Sierra Club. The FHFA oversees Fannie Mae and Freddie Mac, two mortgage organizations that have taken issue with PACE financing that has effectively brought the entire program to a standstill. Property Assessed Clean Energy (PACE) financing allows homeowners to finance energy efficiency upgrades through tax liens. The tax liens take a superior loan position and mortgage companies don’t like being second in line for repayment should things go sour.
Sierra Club Executive Director Michael Brune explained the organization’s complaint in a press release issued today:
“Fannie Mae and Freddie Mac are overstepping their bounds by preventing Americans from using these programs. PACE programs provide middle class Americans a means to invest in affordable energy upgrades that will in turn create thousands of clean energy jobs. Fannie Mae and Freddie Mac need to stop blocking participation in these programs.
By providing upfront funding for clean, renewable energy and energy saving improvements, PACE programs benefit Americans by enabling them to conserve energy, dramatically reduce their utility bills, increase their property values, and decrease the overall impact of global climate change by reducing their individual carbon footprints.“
The complaint was filed yesterday in the Northern District of California San Francisco Division of the United States District Court. The Sierra Club is listed as the plaintiff and the Federal Housing Finance Agency and Edward DeMarco as the acting director of the FHFA are listed as the defendants.
This isn’t the first lawsuit filed against Fannie Mae and Freddie Mac regarding their objection to PACE programs. California’s attorney general Jerry Brown and Sonoma County (California) have both filed suit against the FHFA regarding this block. Congress is also getting in on the action with the submission of the PACE Assessment Protection Act of 2010 as well as a proposal by Congressman Steve Israel (D-NY) to approve a 30-month pilot project to address the FHFA’s concerns with PACE programs.
There are a bevy of benefits to the PACE financing program. Homeowners can perform an energy efficiency upgrade on their home without the need for thousands of dollars in up front costs, the upgrades could potential increase the home’s value and be a positive selling point, and the projects will generate new jobs.
The PACE financing saga continues and with no immediate end in sight, programs across the country are in an indefinite holding pattern.