Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Loan Giants Threaten Energy-Efficiency Programs

Recommended Posts

http://www.nytimes.com/2010/07/01/business/energy-environment/01solar.html?ref=business

The Obama administration is devoting $150 million in stimulus money for programs that help homeowners install solar panels and other energy improvements, which they pay for over time on their property tax bills.

At the same time, the two government-chartered agencies that buy and resell most home mortgages are threatening to derail the effort by warning that they might not accept loans for homes that take advantage of the special financing.

The mixed messages have alarmed state officials and prompted many local governments to freeze their programs, which have been hailed as an innovative way to help homeowners afford the retrofitting of a house with solar panels, which can cost $30,000 or more before incentives.

“The thing that is maddening is that this is having a real-life impact with companies laying off people and homeowners in limbo as all these projects are stalled,” said Clifford Rechtschaffen, a special assistant attorney general in California.

Under the financing programs, a local government borrows money through bonds or other means, and then uses it to make loans to homeowners to cover the upfront costs of solar installations or other energy improvements. Each owner repays the loan over 20 years through a special property tax assessment, which stays with the home even if it is sold.

The technique, known as Property Assessed Clean Energy, or PACE, was pioneered by Berkeley, Calif., in 2008, and 22 states have authorized such programs, which are intended to make it easier and cheaper for homeowners to invest in energy efficiency.

So far, only a few thousand people have used them.

But the Energy Department wants to promote the programs — and give an economic boost to companies that install energy systems — through the $150 million in stimulus funds, which are intended to help communities cover setup and administrative costs.

Fannie Mae and Freddie Mac, the government entities that guarantee more than half of the residential mortgages in the United States, have different priorities. They are worried that taxpayers will end up as losers if a homeowner defaults on a mortgage on a home that uses such creative financing. Typically, property taxes must be paid first from any proceeds on a foreclosed home.

In letters sent to mortgage lenders on May 5, Fannie Mae and Freddie Mac stated that energy-efficiency liens could not take priority over a mortgage. “The purpose of this industry letter is to remind seller/servicers that an energy-related lien may not be senior to any mortgage delivered to Freddie Mac,” wrote Patricia J. McClung, a Freddie Mac executive.

Comedy genius, this is farce at it's finest.

I take my hat off to you Obama, Carry On appears alive and well in the US administration.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.