Placer County ends green loan program

A surprise move by lenders Fannie Mae and Freddie Mac forced Placer County to get rid of its popular green financing program for homeowners.New rules issued by the lending giants will leave more than 120 homeowners in Placer County who applied for the loans without funding for solar projects and other green improvements. The loan program called mPower launched in April and made it easier for homeowners to install solar panels and other energy projects by offering low-interest loans as a part of the county's Property Assessed Clean Energy (PACE) program. The program enabled homeowners to pay back the loans on their property tax bill. But problems began on May 5, when the Federal Housing Finance Agency – which regulates Fannie Mae and Freddie Mac – issued letters to loan holders informing them they were prohibited from taking out other loans that had a senior or first lien status to Fannie/ Freddie loans.On Tuesday, the loan programs became stricter when federal agencies decided to "tighten borrower debt-to-income ratios to account for additional obligations associated with possible future PACE loans," according to a statement issued by the Federal Housing Finance Agency. The decision would affect all mortgages in a jurisdiction that has a clean energy program, even if borrowers don't have a clean energy loan. Not only would Tuesday's decision reduce the size of mortgages that homeowners with a clean energy loan can obtain, but it would also add thousands of dollars to the loan balances of homeowners without a solar loan."If there is a PACE program in a community, they have directed that banks change their underwriting standards in those communities, which would have an adverse impact on all property owners in our community. That gives us no choice other than to suspend the program," said Jenine Windeshausen, Placer County's treasurer and tax collector. "There's talk of trying to get congressional action, a legislative change," Windeshausen said. "But it's too early to know anything on whether that will proceed and how successful that might be."Windenshausen said there were 134 PACE loan applications pending and all but 12 of those won't be processed. "If they executed a contract as of Tuesday, then we can go ahead and complete those. But the statement did not give any grace period or any leeway whatsoever," she said. "It took us by surprise when we received it, so we didn't have any alternative." Josh Fernandez can be reached at joshf@goldcountrymedia.com