The state of California has suspended a $30 million solar energy loan program because of pressure from federal housing regulators.
The California Energy Commission had received the money as part of the federal stimulus package; it was slated to be used for Property Assessed Clean Energy, or PACE, loans. The $30 million would have created 4,400 jobs and saved more than 336 million kilowatt-hours of energy through 2012, according to the state.
But officials at the Federal Housing Finance Agency are urging municipal and county governments to suspend their PACE programs, due to concern about their status in mortgage defaults. PACE loan payments are made through property tax assessments; as a result, they're paid back before a mortgage if a borrower defaults.
Punitive action will be taken against those with federally insured home loans who participate in PACE programs, the FHFA says.
While the CEC sharply criticized the FHFA's move, it conceded that it had little choice but to comply with the new regulations, lest mortgagees in California be punished for their participation in PACE. The commission said it "believes that it is necessary to broaden the range of financing approaches beyond PACE so that [stimulus] funds can be put to use at the earliest possible time."
