Most everyone would like to make their home or business more energy efficient or install renewable energy projects such as solar. The major hurdle to overcome before making these improvements is the up-front cost.
To address this situation, 22 states, including Colorado, have begun Property Assessed Clean Energy programs, which allow property owners to finance energy upgrades through their property taxes.
Repayment is made as a property assessment on the borrowers property tax. Improvements can be structured so that money saved on bills is greater than the monthly cost of the assessment, thus removing the financial barrier and creating an immediate gain.
One of the main attractions of PACE is the assessment stays with the property. If the property is sold, the new owner picks up payment where the last left off. This is something that mortgages dont offer, and that has the big mortgage bankers nervous.
Fannie Mae and Freddie Mac bailed out with more than $1 billion in taxes recently refused to finance homes with energy assessments. Although they have never had an issue with property assessments for projects such as sewers and sidewalks, they claim energy assessments provide no public benefit.
The public benefit is obvious in Boulder County; more than $10 million has been distributed through a PACE program. This program has reduced the publics energy burden while improving the local economy helping more than 600 homeowners reduce their energy bills and creating work for 280 contractors.
Despite the $150 million in federal tax dollars that have been invested in PACE programs across 22 states, federal banking regulators are backing Freddie and Fannie on this decision. These mortgage corporations want to limit homeowners choice of financing and force us to finance energy improvements through their mortgage tools.
PACE provides a much more affordable and convenient option to homeowners. County commissioners need to show no fear of the banks and move forward with a La Plata County PACE program. The bankers decision does not affect PACE for commercial properties. Congress is taking action to correct the problem within the year.
Andrew Shelton, Durango