Laura had written here that ClimateSmart was in trouble — and at the Camera that the ClimateSmart home loan program is indefinitely suspended (though the ClimateSmart commercial loan program is not). The trick is that it’s yet another loan and multiple entities have claims to that debt — and they all want to have the first claim to it. Not surprisingly, the Wall Street Journal does a far better job of explaining the financial side of the PACE/Fannie/Freddie entanglement than I do.
More recently, Grist caught up with a Longmont teacher who came this close to retrofitting her home, but ended up frustrated with ClimateSmart.
“I was looking forward to a warm winter,” she said.
That’s when Fannie Mae and Freddie Mac threw the program into confusion by sending letters suggesting that mortgage lenders should steer clear of PACE, arguing that PACE liens could not take priority over mortgages. The government-chartered mortgage giants are concerned about losing out if homeowners with clean-energy assessments default on their loans.
Boulder County commissioners, along with Colorado Gov. Bill Ritter (D) and others, urged Fannie and Freddie and their federal regulator to clarify their cryptic letters and resolve the issue. But last week, after having already delayed the program once while awaiting resolution, the county felt compelled to cancel the latest round of ClimateSmart funding.
“We had a couple hundred homeowners who were applying for $3 million in financing for projects who have essentially been hanging in limbo,” County Commissioner Will Toor said. “We initially hoped the issue would be quickly resolved. It hasn’t been. While we still believe that it will eventually be resolved, we couldn’t ask our homeowners and local green building contractors to just remain in limbo.”
Read more of Kayla Thomason’s story over at Grist.
Boulder County has suspended its popular, voter-approved ClimateSmart Loan Program, which lets you borrow money from them (at relatively low interest rates) to make energy-efficient improvements to your home like adding solar panels or blowing in some more insulation.
There are, apparently, a couple of problems that came out last week. One is a set of new rules from the DOE that govern loans like ClimateSmart — though that one will likely be no that big of deal. The second, which is more of a problem, is a letter from mortgage-buying giants Fannie Mae and Freddie Mac. The letter implies that the government-sponsored agencies won’t buy mortgages for houses that have ClimateSmart liens on them.
“Every program in the country — in Colorado the programs that are just getting set to launch in Eagle County — are going into neutral and saying, ‘We’ll continue developing programs,’ but nobody is going to issue any additional financing until there’s clarification of the letter,” Commissioner Will Toor told the Camera on Thursday.
“The timing here in Boulder County is very unfortunate because we had a round of residential loans that would be closing tomorrow and we were looking at a bond sale in a few weeks,” he said. “There are a bunch of property owners and a bunch of contractors who were hoping that this would move forward.”