Does a Riverside County, CA, residential energy financing program put thousands of homeowners on a collision course with the Federal Housing Finance Agency (FHFA)?
In a proposed rule-making, the FHFA has suggested that Property Assessed Clean Energy (PACE) policies represent a threat to the safety and soundness of mortgages held by government-backed Fannie Mae and Freddie Mac. PACE is a unique financing strategy that allows homes and businesses to invest in significant energy efficiency and renewable energy upgrades and pay them back through a property tax assessment (for an explanation of PACE, see this PACE 101 slideshow). The fight with FHFA stems from these assessments being “first liens,” e.g. in the event of bankruptcy, they are paid back before the mortgage holder (FHFA’s Fannie or Freddie). Read full story.