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Can PACE Local Energy Financing Come Back?

 
It can with your help — submit a comment to the FHFA by Thursday, Sept. 13!

After effectively suspending residential PACE energy efficiency and renewable energy municipal financing programs in 2010, and then being taken to federal court and required to do a revised rule making, the Federal Housing Finance Agency (FHFA) released its revised ruling on PACE programs [pdf] earlier this summer.

Did the agency repent from its 2010 assertion that PACE presented a risk to mortgage holders like Fannie Mae and Freddie Mac?

In short, no.

The ruling states:

The Enterprises shall immediately take such actions as are necessary to secure and/or preserve their right to make immediately due the full amount of any obligation secured by a mortgage that becomes, without the consent of the mortgage holder, subject to a first-lien PACE obligation…

The Enterprises [Fannie and Freddie] shall not purchase any mortgage that is subject to a first- lien PACE obligation…

The Enterprises shall not consent to the imposition of a first-lien PACE obligation on any mortgage.

In other words, h*** no.  So residential PACE is still dead and it’s not clear that anything short of a replacement at the top of the FHFA could make a difference.

Click here to learn what is PACE. You can also read ILSR’s 2010 report on the lessons learned from early PACE programs, or try to feel better by laughing it off.

This post originally appeared on ILSR’s Energy Self-Reliant States blog.

 
 
 
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Written By

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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