Fannie and Freddie Hold PACE Homeowners Hostage – Latest Action Prevents Homeowners from Refinancing Unless They Pay PACE Assessments Up Front – ICLEI USA Urges Congress and the Administration to Prevent Dismantling of PACE Programs in 23 States, 150 Cities and Counties.
Washington, D.C. [Sept. 09, 2010] – ICLEI-Local Government for Sustainability USA, the nation’s leading local government association addressing climate change and sustainability, issues the following statement in response to Fannie Mae and Freddie Mac’s latest actions on Property Assessed Clean Energy (PACE). Fannie Mae and Freddie Mac recently issued a statement that homeowners who have participated in PACE programs must pay off their local government-financed energy improvements before they can refinance their mortgages. (see attached Fannie Pace Guidance issued August 31, 2010)
“Fannie and Freddie are absolutely shameless! They misled Congress and the American people about their intentions to work out a solution that would protect homeowners currently engaged in PACE programs. Incredibly, they are now forcing current PACE customers to pay their clean-energy improvements up-front before they can refinance their homes,” said Patrick Hays, Mayor of North Little Rock, AR and President of the Board of Directors, ICLEI USA.
“Congress and the administration need to step in and put an end to this Fannie and Freddie runaway train. Their first priority should be to protect these clean energy pioneers who are now being forced to pay off their local government clean energy improvements up front,” said Martin Chávez, ICLEI USA Executive Director and former three-term mayor of Albuquerque, NM.
“Congressman Barnie Frank was right. Perhaps, it really is time to end Fannie Mae and Freddie Mac, along with their multimillion dollar campaign contributions and their supposed overseer, the Federal Housing Finance Agency (FHFA)! Think of the savings to taxpayers and homeowners,” added Chávez.
Background:
PACE programs are not loans or liens tied to traditional loan mechanisms. Local governments instead finance the upfront costs through voluntary tax assessments, which are paid incrementally in small amounts through a homeowner’s annual property tax bills and offset by reduced energy costs.
As we have noted previously, these latest actions by Fannie and Freddie serve to reinforce the widely-shared notion that Federal Housing and Finance Administration, the federal regulator in charge of Fannie & Freddie is not interested in giving a helping hand to battered homeowners and beaten local economies, instead, FHFA simply wants to protect Fannie & Freddie’s bottom line.
More information on PACE programs can be found at www.pacenow.org
More information on ICLEI USA can be found at: www.icleiusa.org
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