PACE in Jeopardy
Several recent reports, including two in The New York Times by reporter Todd Woody (http://nyti.ms/aAfzYC and http://nyti.ms/dktWZO), about the Obama administration's $150 million stimulus initiative to promote energy efficiency and solar power suggest that the left hand of the federal government doesn't know what the right hand is up to. The program in question, known as Property Assessed Clean Energy, or PACE, is a financing mechanism that allows homeowners to borrow money from their local government and repay it over 20 years through a special property tax assessment. Twenty-two states now have authorized such programs. In short, it's a clever way to finance energy savings.
The problem is that Fannie Mae and Freddie Mac, the two quasi-government entities that buy and resell most home mortgages, are now saying that they will not accept mortgages on homes that have PACE loans outstanding.
Both California Governor Arnold Schwarzenegger and New York Mayor Michael Bloomberg are jumping into the fray since so much is at risk.
My guess is that these political heavyweights will save the energy efficiency day. Stay tuned.