PACE and the Federal Housing Finance Agency (FHFA)

TitlePACE and the Federal Housing Finance Agency (FHFA)
Publication TypePolicy Brief
AuthorsZimring, Mark, and Merrian C. Fuller
Tertiary AuthorsBorgeson, Merrian
Secondary TitleClean Energy Financing Policy Brief
PublisherLBNL
Place PublishedBerkeley
Year of Publication2010
Pagination5
Date Published03/2010
Abstract

The FHFA regulates Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks (the government-sponsored enterprises – GSEs). On June 18, 2009, James B. Lockhart III, then Director of FHFA, released a letter expressing concern about the negative impact of energy loan tax assessment programs (ELTAPs) – also known as Property Assessed Clean Energy (PACE) programs – on both the housing finance system and homeowner program participants. Subsequently, a number of PACE proponents responded to the concerns laid out in the FHFA letter. In early Fall 2009, word circulated that FHFA was planning to follow its June letter with guidance to other agencies, possibly including Fannie Mae and Freddie Mac, discouraging them from buying loans on properties subject to PACE-type assessment liens. This triggered a second round of stakeholder letters, several of which were addressed to President Obama. On October 18, 2009, the White House, in what some believe was an attempt to obviate the need for FHFA guidance, released a Policy Framework for PACE Financing Programs that outlined best practices guidance for homeowner and lender protection. As of February 2010, FHFA and the GSEs have agreed to monitor PACE programs and work with stakeholders and the Administration to consider additional guidance beyond the Policy Framework and to collect more information on PACE program efficacy and risks. A summary of the communications timeline and highlights of the communications are provided below.

Keywordselectricity markets and policy group, energy analysis and environmental impacts department
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