After effectively suspending residential PACE energy efficiency and renewable energy municipal financing programs in 2010 and then being taken to federal court and required to do a revised rule making, the Federal Housing Finance Agency (FHFA) released its revised ruling on PACE programs [pdf] today.
Did they repent from their 2010 assertion that PACE presented a risk to mortgage holders like Fannie Mae and Freddie Mac?
In short, no.
The ruling states:
The Enterprises shall immediately take such actions as are necessary to secure and/or preserve their right to make immediately due the full amount of any obligation secured by a mortgage that becomes, without the consent of the mortgage holder, subject to a first-lien PACE obligation…
The Enterprises [Fannie and Freddie] shall not purchase any mortgage that is subject to a first- lien PACE obligation…
The Enterprises shall not consent to the imposition of a first-lien PACE obligation on any mortgage.
In other words, h*** no. So residential PACE is still dead and it’s not clear than anything short of a replacement at the top of the FHFA could make a difference.
Click here to learn what is PACE. You can also read our 2010 report on the lessons learned from early PACE programs, or try to feel better by laughing it off.