The Property Assessed Clean Energy (PACE) program—which let property owners add the cost of solar arrays, energy-efficient retrofits and other home improvements onto their property tax assessments and pay them back over a 15- to 20-year period—is all but dead, thanks to mortgage buyers Fannie Mae and Freddie Mac, otherwise known as the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Endorsed by 22 states and the Obama administration, the PACE program has so far helped more than 600 homeowners invest more than $10 million in energy-efficient improvements.
The PACE program helped homeowners fund major energy-efficient changes, such as rooftop solar panels, by allowing them to add the upfront costs to their property tax assessments. Photo By Barry Rustin.
The two mortgage giants told lenders last May that they would stop accepting loans from this program, saying it posed unusual and difficult risks for lenders without providing the traditional community benefits associated with taxing initiatives. Because the two agencies have incredible influence in the home loans market, this announcement effectively killed the PACE program.
The PACE program won’t go out without a fight, however; governors and Congress members are requesting further clarification from the two agencies on their action, and some are calling for legal action.