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Strengthen Federalism: Enact Legislation Supporting Residential Property Assessed Clean Energy Financing

Congress should enact legislation that supports residential property assessed clean energy (PACE) programs in the nation’s states and metropolitan areas. Such legislation should require the Federal Housing Finance Agency (FHFA) to allow Fannie Mae and Freddie Mac to purchase residential mortgages with PACE assessments while at the same time providing responsible underwriting standards and a set of benchmarks for residential PACE assessments in order to minimize financial risks to mortgage holders.

Along these lines, congressional support of residential PACE programs would:

  • Send a strong signal that the U.S. remains fiercely committed to investing in smart, innovative financing structures that can catalyze the energy retrofit market

  • Enable states and local governments—many of which suspended their residential PACE programs in the wake of the FHFA ruling—to design and implement such programs in their communities

  • Save money for homeowners by reducing energy costs

  • Create new jobs and career opportunities in both the energy efficiency and renewable energy industries

  • Reduce greenhouse gas emissions and so produce significant climate benefits

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SERIES: Remaking Federalism | Renewing the Economy | Number 4