Property Assessed Clean Energy (PACE) Revived in Congress

Mon, 2011-08-01 12:18

capitol hillProperty Assessed Clean Energy (PACE) allows homeowners to finance energy improvements through financing by a local government that is paid back through a special assessment on their property taxes. This great program which has the potential to radically improve America’s energy usage was shut down by the Federal Housing Administration as a threat to Mortgage lenders. PACE faced opposition in the secondary mortgage market because, as a tax assessment, it took a priority in the repayment if the home went into foreclosure. In 2010 the Federal Housing Finance Administration (FHFA), Fannie Mae, Freddie Mac and the Office of the Comptroller of the Currency declared that PACE presented “significant safety and soundness concerns” to the secondary mortgage market and shut down its activity. These entities are all federal institutions.

However, legislation introduced in the U.S. House of Representatives on July 20, 2011, seeks to give new life to PACE. The “PACE Assessment Protection Act” (H.R. 2599) introduced by Representatives Nan Hayworth (R-CA), Dan Lungren (R- NY) and Mike Thompson (D-CA) would rescind the warnings from the federal financial institutions that shut down PACE. The bill also would incorporate underwriting standards for PACE programs and establish rights of payment in foreclosure, consumer protections and limitations on delinquent payment collection. The bill has twenty co-sponsors. The new bill aims to revive PACE by defining it as an assessment rather than as a loan. The Representatives’ offices even met with Fannie Mae’s and Freddie Mac’s counsel prior to introducing the bill in an attempt to quell their concerns. In order to answer FHFA’s arguments and questions, the planned House bill will incorporate underwriting standards and will establish rights of rescission, consumer protections, and limitations on delinquent payment collection. Hopefully, once the debt limit issue is passed Congress important issues like our countries energy policy will take center stage.

If you are interested in becoming a Home Energy Auditor or learning about Energy Efficiency, take a look at the BPI Building Analyst Certification program.

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