Thousands comment on possible change in PACE program

Monday is the last day for public comments on proposed changes that could restrict funding for the Property Assessed Clean Energy (PACE) program that finances home energy improvements. Critics say the changes could effectively end the program that has helped homeowners in many cities and counties pay for improvements that make their homes more energy efficient.

The PACE program allows homeowners to finance energy efficiency and renewable energy retrofits through loans that are repaid with city or county property tax assessments, essentially a lien on the property. The Federal Housing Finance Agency (FHFA) says that local governments holding a first lien on PACE homes is invalid and poses a significant risk to federal mortgage giants Fannie Mae and Freddie Mac.

The PACE program stalled in 2010 when FHFA issued a warning against the use of PACE loans and set new rules directing Fannie Mae and Freddie Mac to refrain from underwriting mortgages that contained PACE assessments. Several local governments filed suit against FHFA. In January, a federal court ordered FHFA to initiate a 60-day public notice and comment period before making changes to its approach to PACE.

FHFA says it has received more than 200 individual responses, with form letter submissions stretching into the thousands. Comments are posted on the agency’s website.  

The National League of Cities, the National Association of Counties and the United States Conference of Mayors oppose FHFA’s approach, as well as the National Resources Council and the Community for Sustainable Energy. Local government leaders — including Binghamton, N.Y., Mayor Matthew Ryan; Ridgway, Colo., Mayor Pro Tem John Clark; and the city council for Visalia, Calif. — also have commented individually against the FHFA changes. The FHFA is expected to issue a proposed rule in late April, with another comment period to follow.