Stakeholders will discuss how to move forward in the commercial and industrial sectors, and discuss residential programs, many of which across the nation were put on hold because of a letter from the Federal Housing Finance Agency penned because of lending giants Freddie May and Freddie Mac’s concerns that PACE payments would take precedence over mortgage repayments if borrowers defaulted.
Through PACE property owners can finance renewable energy and efficiency improvements through an additional tax assessment on their property. To qualify, the yearly energy savings for a property must be more than the tax assessment.
For example, say I wanted to add insulation in my basement and attic and a PV system on my roof. The total cost of the project is $11,000, including $1,000 for administrative costs and interest. The PACE bond covers the upfront cost, while I pay a yearly assessment for 20 years.
My net energy savings for the year–which would be evaluated by an energy auditor–must be more than the cost of the property assessment, so I need to save $551 per year to qualify because my yearly tax assessment would be $550.
Jason Hughes of Renew Missouri said a national legislative fix for the residential program could come as soon as the next three weeks.
PACE recipients in California and New York aren’t waiting. Lawsuits are being filed that will pressure lending giants Fannie May and Freddie Mac and the FHFA to devising a solution.
Stay tuned for updates…