On Thursday four senators introduced legislation that would re-vivify the Property Assessed Clean Energy (PACE) program, which helps homeowners finance the high up-front costs of clean energy improvements and retrofits. This "cash for caulkers" program, financed with $150 million in federal stimulus funds, helps people cut their energy bills, curbs greenhouse gas pollution, and has created scores of family-wage-paying green jobs around the country.
PACE was on track to expand, but as OnEarth has reported, it was effectively killed earlier this month, when the Federal Housing Finance Agency, instructed lenders to back away from mortgages in municipalities that run PACE-funded programs. Many cities and towns have halted their PACE programs as a result.
PACE loans are typically connected to a property as a tax assessment, a "first lien," which would have to be paid off ahead of a mortgage in the event of a default. The Federal Housing Finance Agency believes this creates too much risk to the bottom lines of Fannie Mae and Freddie Mac, the government-backed mortgage guarantors that the agency regulates.
The Senate bill is backed by Sens. Barbara Boxer (D-Calif.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), and Mark Begich (D-Alaska). It would, according to Sen. Boxer's office, "require lenders to adopt new, sound underwriting standards that support PACE financing programs, rather than stymie them. It would treat PACE assessments the same as other property tax assessments and respect states' authority to secure such assessments with a first lien."
The Senate measure is the partner to a House bill, introduced by Congressman Mike Thompson (D-Calif.) and 29 co-sponsors on July 15.
It's unclear whether the companion bills will increase the pressure on the FHFA to change its stance on PACE. Jonathan Zasloff, an environmental law professor at University of Californa-Los Angeles, believes the Senate measure would face a filibuster threat from Republicans. "Stopping the bill will simply be another way to frustrate any voters who care about such things, and they will take out their frustrations on the 'governing' party," he recently blogged at LegalPlanet, "even though that party is the one that is advancing their interests."
Keep up with PACE via OnEarth's ongoing coverage.