On Jan. 26, 2012, the Federal Housing Finance Agency (FHFA) was ordered to solicit public comment on whether it should have halted Property Assessed Clean Energy (PACE) financing programs. The order came as a result of a ruling from the San Francisco-based Ninth Circuit Court of Appeals on December 20, 2011. As a result of the order, the Federal Register now lists an advance notice of proposed rulemaking by FHFA on PACE.
PACE financing programs allow property owners to obtain financing for alternate energy and energy efficiency projects secured by special assessment payments levied on real property. Many PACE programs were set to begin operating when, in July 2010, the FHFA ordered Fannie Mae and Freddie Mac to stop underwriting residential mortgages that included PACE assessments in July 2010. Litigation has been ongoing since that time. As a result, the recent appeals court decision is considered not only a win for property owners, but also for local governments, businesses and environmental organizations that support PACE and the economic development they feel it would bring to their communities.
As the court-mandated 60-day comment period moves forward, more than 50 members of the U.S. House of Representatives are working to gain bipartisan support for the PACE Assessment Protection Act (H.R. 2599). If successful, this bill would prevent FHFA, Fannie Mae, Freddie Mac and other federal mortgage organizations from blocking state and local PACE laws. Read here for more information on H.R. 2599.