July 30, 2010
Contact: Virginia Cramer, 804-225-9113 x102
Fannie Mae, Freddie Mac Must Stop Blocking Home Energy Program
Sierra Club Challenges Hold-Up of PACE Program
Washington, D.C.: The Sierra Club filed suit against the Federal Housing Finance Agency ("FHFA") for blocking participation in Property Assessed Clean Energy (PACE) programs by any of Fannie Mae's and Freddie Mac's mortgage holders. The FHFA has oversight over the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").
PACE programs allow local governments to finance the initial costs of residential clean energy projects by providing upfront funding to homeowners to pay for improvements, like installing solar panels and upgrading homes with energy saving measures. Local governments then recoup these costs by adding special assessments to homeowners' properties. The program is similar to those already in use across the country to finance community-scale improvement projects - such as putting utility lines underground or repairing roads or sewers. PACE programs seek to use this proven financing approach to overcome the financing obstacles to small-scale clean energy projects.
Statement from Sierra Club Executive Director Michael Brune
Fannie Mae and Freddie Mac are overstepping their bounds by preventing Americans from using these programs. PACE programs provide middle class Americans a means to invest in affordable energy upgrades that will in turn create thousands of clean energy jobs. Fannie Mae and Freddie Mac need to stop blocking participation in these programs.
By providing upfront funding for clean, renewable energy and energy saving improvements, PACE programs benefit Americans by enabling them to conserve energy, dramatically reduce their utility bills, increase their property values, and decrease the overall impact of global climate change by reducing their individual carbon footprints.
Once established, PACE programs will need no federal funding, yet will create thousands of jobs in renewable energy and energy efficiency manufacturing, installation, and construction. PACE-program enabled investments will develop a workforce in manufacturing, building trades and other occupations necessary to deliver a new generation of higher performing, smarter, greener buildings.
PACE programs further benefit Americans by reducing the effects of climate change and other air pollutants that result from our reliance on fossil fuel energy sources. Reducing reliance on these polluting sources improves human health, aesthetics, property value, recreational opportunities, and the environment.
Background: On May 5, 2010, Fannie Mae and Freddie Mac issued advice letters to all lending institutions stating that mortgages for homes participating in PACE programs are not allowed. The letters wrongfully mischaracterized the PACE program as issuing "loans."
On July 6, 2010, the Federal Housing Finance Agency and Edward DeMarco echoed the policies stated in the May 5, 2010 advice letters by issuing a statement that directed Fannie Mae and Freddie Mac to adjust their practices in a manner that will severely restrict, if not completely eliminate, the availability of PACE programs for homeowners.
For a copy of the complaint contact Virginia.firstname.lastname@example.org.