Sacramento Building Performance

SMUD Dramatically Increases Rebates for Home Performance!

Jeff — Sun, 27 Mar 2011 16:26:33 +0000

The SMUD Home Performance Program has just announced a significant increase in rebate levels!

The basic Prescriptive Level that consists of air sealing, insulation and duct sealing went from $1,000 to $1,500.
For the advanced Performance Level the following increases are now in effect:

Improvement Level	Old Rebate	New Rebate
20%	$2,000	$2,500
25%	$2,500	$3,000
30%	$3,000	$3,750
35%	$3,500	$4,750
40%	$4,000	$6,000
45%	$4,500	$7,500
50%	$5,000	$9,000

Two weeks prior to this latest announcement, the program changed the way the rebate percentages were calculated. In most cases this resulted in a 5%-10% savings increase.

For example a project that might have been at 20% and eligible for $2000 two weeks ago, could now be at the 25% level and eligible for $3000!

For those projects in the higher levels the maximum amount has increased from $5000 to $9000!

For those of you that haven’t scheduled your assessment call me so we can find out what rebate your home could be eligible for!

For customers that have been waiting to decide if the time is right to do your retrofit project, the timing will never get better than now!

Call or email me and I can rerun your energy model and see what your new rebate amount would be for the same scope of work!

SMUD Home Performance Project Saves Over 50%

Jeff — Sun, 06 Feb 2011 03:22:33 +0000

After kind of a slow start last fall, the SMUD Home performance program part of the Energy Upgrade California program has been going in full swing for a few months now. I thought it would be interesting to share some results of the program by profiling a recent project I completed in Fair Oaks. In the interest of full disclosure you should know that I was recently informed by the California Building Performance Contractors Association that this project at 53% improvement got the highest percentage rating of any other project in the SMUD program to date. Though your actual mileage may vary, I haven’t done a project that got less than 40%, which translates into a $4,000 rebate from SMUD.

The home is relatively small at just over 1300 sf on a nice quiet street in Fair Oaks. Built in the mid 1950”s it still had the old steel casement windows and 25+ year old furnace in a closet in the kitchen. The home is currently owned by a young married couple and had one previous owner that took good care of the property. Because of the high cost of keeping the house warm, the homeowners had gotten used to going around in sweaters, while the old single pane windows dripped with condensation on the interior. This is a result of warm interior air coming into contact with the cold glass, just like a cold glass of ice tea on a summer afternoon.

I performed an energy assessment on the home in November and we performed the retrofit in mid December. The existing ducts were leaking at a rate of 43% and the shell leakage was at 2605 cfm50 when it should have been closer to 1300 cfm50. There was no insulation under the cold floor and little in the attic. The inside relative humidity was 65% which is the perfect amount of moisture to cultivate mold, dust mites and other air quality problems. Ideally indoor RH should be in the 35% to 45% range maximum.

Though the house is adorable on a beautiful lot on a great street and had been well maintained, it needed a lot of help to insure it could be enjoyed for years to come.

Here’s How We Did It

We addressed the energy loss, high moisture content and comfort problems during the week and a half long retrofit by installing the following measures:

Attic and crawlspace air sealing

By sealing all penetrations, wall top plates and bypasses we got the infiltration rate down to 1205 cfm50. A 46% improvement! Even high levels of fiberglass or cellulose insulation have their R value significantly reduced when air is able to pass through them because of leakage.

Crawlspace vapor barrier and insulation

Crawlspaces can give off up to 100 pints of moisture a day with or without standing water or wet soil. We installed a 6 mill plastic vapor barrier on top of the soil with seams taped and sealed up the foundation wall. This blocks a large amount of moisture from migrating into the house. The home owners noticed the difference right away in how the hardwood floors felt on their bare feet.

Attic insulation

We increased the insulation levels to R-40. This is one area we could have gone higher but because of the low attic we decided it would be sufficient.

High Efficiency HVAC

We like to use Amana equipment. It performs well and has a lifetime warranty. We replaced the old 80% efficient furnace with a 95% AFUE model and a 16 SEER air conditioner. We installed the new equipment in the attic which got it out of the living space and enabled us to reclaim the old closet and repurpose it as a nice sized pantry. A double bonus!

Energy Efficient Windows

I think if you asked the homeowners what their favorite feature of the project is, they would without hesitation say the new windows. When I came to do the original assessment every window in the house was literally dripping with condensation. Towels from taking a shower never air dried in the winter, even with the exhaust fans running. There was a constant drafty feeling when you got within a few feet of the windows.

We replaced the old steel casements with high efficiency Energy Star® rated vinyl windows. With both a U-value and SHGC of 0.3 these windows will perform great in any season. Gone is the drafty feeling. Gone is the condensation that leads to mold and dry rot. They look fantastic too!

The point I’m trying to make here is that to really improve a home’s energy and environmental performance you need to take a “whole house approach”. You can piecemeal these things over time and you may see some small overall improvement. You can also make matters worse. To get the most value for your investment requires an experienced energy professional that can truly assess your home’s needs, like a doctor examining a patient. To ensure that all the systems in your home are working together and not in conflict with each other, takes someone trained in building science not just a contractor trying to sell you a bigger more powerful HVAC system or new windows.

Click here to read about the homeowners opinion of the project and the savings they are seeing in their utility bills as a result!

Rebates Available

As I said earlier this home was rated at a 53% improvement in energy usage. That qualified it for a $5,000 rebate from SMUD, the maximum amount available. On top of that they received $1,300 from the Cash for Appliances Program for the new HVAC system and are eligible for $1500 federal tax credit. That’s a total of $7,800! That saved them over 30% on the cost of their project. Combine that with their monthly energy savings and the increased value and comfort of their home and it’s a total win!

As you may have heard the Cash for Appliances Program ended December of 2010 and the federal tax credit though extended, was reduced to 2005 levels of $500 max. But the SMUD program which is the most generous in the state is still available through the end of 2011.

Prescriptive vs. Performance

There are two levels of participation in the program. The first and basic level is called the prescriptive approach. This requires a brief visual assessment of the insulation levels and duct leakage levels of your home. It requires air sealing, insulation and duct sealing. The maximum rebate amount available for this level is $1000.

The other option which is considerably more involved is the Performance level. This requires a full assessment by a BPI accredited energy professional. It also requires the minimums of air sealing, insulation and duct sealing. Depending on the individual needs of your home it may also include HVAC system replacement, window upgrades, and water heating and lighting improvements.

The rebate amounts are based on a computer generated energy simulation done by the energy professional. The baseline is a 20% improvement which qualifies a homeowner for $2,000. For every 5% improvement after that, the rebate increases another $500 maxing out at $5,000 for a 50% improvement.

In addition for a limited time SMUD is offering a subsidy to defray the cost of the initial energy assessment. Normally in the $500 to $700 range, SMUD is offering a comprehensive assessment performed by a highly trained and accredited energy professional for just $99! Again there are two paths you can choose. If you just want the assessment done for now and might wait on the improvements, then you should contact an Independent Home Energy Rater on the SMUD website. If you are interested in a one stop shopping experience where the assessment and improvements can be done by the same company which also offers financing options, then pick a SMUD Qualified Energy Professional. Both can offer the $99 assessment.

Time Is Limited

This unprecedented level of energy rebates won’t be around past 2011 so now is the time to take advantage of this opportunity. If your home is uncomfortable and experiencing some of the same issues as the home in our example, contact Sacramento Building Performance at 916-416-0676 or by email at info@sacsustainable.com. I’d be happy to speak with you about your home and provide more information on the process.

HUD MultiFamily Green Retrofit Updates

Jeff — Mon, 13 Dec 2010 00:26:50 +0000

This October we finally began work on our Multi-Family green retrofit project. If you haven’t read previous articles on it, this is a project we have spent nearly a year putting together and getting the go ahead from HUD.

The project is on a 78 unit senior apartment complex constructed in the late 1970′s. The scope of work includes:

Replacing all HVAC systems with high efficiency equipment
Replacing common area and exterior lighting with EnergyStar fixtures
Replacing the old metal windows with high efficiency vinyl products
Replacing apartment ceiling and exhaust fans with Energy Star fixtures
Gutting and retrofitting the apartment kitchens and bathrooms with green cabinets, countertops and flooring
New Energy Star appliances
New water efficient plumbing fixtures
Soil moisture sensing irrigation controllers
Increased insulation levels

This is a fully occupied facility so as you can imagine we need to take great care with the elderly residents, their needs and their homes.

For a weekly update and photos go to my project site: www.einsteingrp.net

Time of Sale Energy Rating

Jeff — Mon, 02 Aug 2010 01:40:59 +0000

While attending a local event for home performance contractors recently, one subject popped up in two separate conversations that I have been thinking about for awhile now and would like to open up for comment: Time of Sale Energy Labeling of Homes.

This is the practice of having a mandatory energy rating or audit done of a home before it can be resold. It’s similar to the requirement that a home have a clean termite report.

Europe has had a mandatory program since 2003 titled the Energy Performance of Buildings Directive. Parts of Canada are launching programs this year.

Congress and the National Association of Realtors

In the United States an earlier version of the American Clean Energy and Security Act of 2009 also known as the Waxman-Markey bill included provisions that would have made time of sale energy labeling mandatory. After stiff opposition from the National Association of Realtors and similar organizations those provisions were removed from the final version that passed the House in June of 2009.

Up until now the U.S. has taken a voluntary approach focusing primarily on new construction. One such program is the successful Energy Star program along with other utility based incentives.

Home Energy Rating System

Nationally the Home Energy Rating System (HERS) has been used in over a million homes to rate relative energy efficiency. It is a numerical standard based on a scale where 100 represents the minimum code standard and 0 is a “net-zero” home. These are voluntary ratings except in the case where they may be required to verify increased efficiency of a home in order to qualify for utility rebates. In 2006 the IRS adopted the HERS rating system to qualify builders for federal tax credits.

In California our version of HERS is a code enforcement mechanism to verify the installation of HVAC, PV solar systems and other energy features regulated by the state energy code Title 24. It is used in both new construction and existing buildings. Special inspectors or HERS raters work in conjunction with local building departments and the CA Energy Commission. The inspections apply to only certain listed features and are pass or fail, not a whole-house energy rating.

HERS II

This is currently changing as the energy commission is releasing it’s HERS Phase 2 program. This will differ from phase one in that it will provide a whole-house rating similar to the national program. Utility companies such as SMUD plan to offer a subsidized full energy assessment with HERS rating at a cost of $99 to customers as part of their Home Performance program. This will be available in the fall of 2010.

If a time of sale HERS rating were to be required in California this would potentially add $400-$600 on to the cost of selling a home. If mandatory then it would be the seller’s responsibility to obtain it just like a termite inspection. This raises some interesting questions:

Would there be a minimum standard of energy efficiency a home would be required to achieve?
If that were the case, could the rater also be a contractor that could install the improvements as is the case with termite companies or would he/she be an independent third party like a home inspector?
Could this lead to significant reduction in energy use or is it just an unnecessary burden on an already struggling real estate industry?
How will this affect the appraisal process?

Benefits of a Voluntary Program

As someone involved in the home performance industry who also performs energy audits and does retrofit work, I think mandatory time of sale ratings are at best unnecessary. There are many in my industry firmly behind the mandatory idea. My question is: Are they in favor because it is a one way of improving the efficiency of the housing stock, or just a way to get more business?

Don’t get me wrong, ratings are a very useful tool to make decisions for improving your home and to differentiate one property from the next. Home inspections serve the same function. They aren’t mandatory in California, but have been common practice in most real estate transactions for some time. Any serious buyer gets an inspection usually at his own expense and it is money well spent.

A good motivation for a seller to get a rating is marketability. If you’ve done energy improvements to your home that make it more efficient than comparable properties, what better way to market that fact than an independent rating performed by a rater certified by the energy commission? I can foresee a time when that will be a standard item listed for a property in the MLS.

If you are an energy rater, appraiser or member of the real estate industry I’d be interested in getting your comments.

SMUD Home Performance Program Launch!

Jeff — Mon, 26 Jul 2010 13:55:20 +0000

Home Performance Upgrades - Click to Enlarge

Last Friday I attended the contractor kickoff meeting for SMUD’s Home Performance Program. Promoted as a soft launch, between now and September SMUD staff will verify eligibility requirements of participating contractors and gear up for a media campaign involving print, online, television and radio advertisements.

Here are the basics of how the program will work:

Two Paths to Energy Savings

As discussed in previous posts, there will be two program paths you can follow. The first is the Prescriptive Option which requires a walkthrough assessment by an SMUD approved home performance contractor. This option includes a preset package of basic improvements:

Air sealing to eliminate leaks and minimize drafts
Attic insulation
Duct sealing to minimize HVAC system leakage and maximize efficiency and comfort
Insulating water heaters and piping
Combustion appliance safety testing and installing smoke and carbon monoxide alarms as needed.

Other considerations:

The first three are required measures. For example, if your home already has sufficient attic insulation you won’t qualify for the prescriptive option.
All five of the upgrades must be present by completion of the job.
Estimated energy savings is 20%
The maximum rebate amount will be $1000, though you may also qualify for federal tax incentives until December 31, 2010.
The rebate comes directly to the homeowner from SMUD (if all electric home) or a combination of SMUD and PG&E (if home has both gas and electric). The total rebate is still $1000. How it will be split is up to the discretion of the utility companies.

There has never been a better time to improve the comfort, efficiency and durability of your home

Home Performance with Energy Star®

The advanced or Performance Package is based on guidelines in the EPA’s well known and respected Home Performance with Energy Star® program.

In addition to the five elements of the prescriptive approach qualified measures can include:

HVAC
Solar water heating
Windows
Wall and floor insulation and more

Other features of the Performance Option include:

A whole-house energy assessment by a BPI certified Building analyst is required.
Computer energy modeling of the proposed improvements is to be done by the contractor to determine the level of savings and thus the ultimate rebate amount.
Rebates increase with the amount of efficiency over the existing home. Beginning at $2000 for 20% improvement and increasing $500 for each additional 5% improvement, maxing out at $5000 for 50% improvement.
You can still qualify for the federal incentive of $1500 maximum until the end of the year.
In addition SMUD offers secured and unsecured loan programs to finance all or a portion of the project.

Quality Control and Customer Satisfaction

SMUD and PG&E take customer satisfaction and quality control very seriously. In addition to certifying each participating contractor meets strict training requirements and is in good standing, there is a independent 3rd party quality control program in place to field verify installation quality. The first 3 projects done by each contractor are inspected and a certain percentage chosen at random thereafter by the independent verifier. All projects are required to log in pre and post work information into a central database that is monitored by SMUD and their project administrator.

Steps to Take Advantage of This Great Opportunity

Select a qualified contractor from SMUD’s list of Participating Home Performance contractors.
After your contractor performs the energy assessment and builds the energy simulation he will provide you list of cost-effective improvements tailored to your home’s needs and your goals. You will choose the work scope you want, authorize the contractor to perform the work and turn in your rebate application.
The contractor completes the retrofit work and performs post work testing to ensure the agreed upon performance targets were reached.
SMUD and/or PG&E approves and issues the rebate check(s) to you in 4-6 weeks

Together with the federal incentives there has never been a better time to improve the comfort, efficiency and durability of your home!

For more information visit the SMUD Home Performance website.

Contact me at 916-416-0676 or by email at jeff@sacsustainable.com to talk about getting started on your home performance project and taking advantage of these great rebate opportunities!

Does Your Garbage Produce More Greenhouse Gas Than Your Car?

Jeff — Wed, 21 Jul 2010 19:41:43 +0000

We hear a lot about the amounts of carbon dioxide produced by driving our cars and the operation of coal fired power plants and their role in climate change. What about the methane produced by our garbage and our ever-growing landfills? According to the EPA, Methane is about 21 times more powerful at trapping heat and warming the atmosphere than carbon dioxide. Methane’s chemical lifetime in the atmosphere is approximately 12 years. Methane’s relatively short atmospheric lifetime, coupled with its potency as a greenhouse gas, makes it a candidate in efforts to mitigate global warming within the next 25 years.

Sources of Methane

While a large portion of the methane is naturally produced, over half comes from direct human activity. The second largest man-made contributor is landfills. 16 million tons of compostable organic waste is added to California landfills every year. What if this methane producing waste could be converted to something useful? Could this be an opportunity to help the environment and produce economic benefits for our region?

Anaerobic Digestion

Enter anaerobic digestion and Clean World Partners. Anaerobic digestion is a process of controlled composting that captures the methane, hydrogen and carbon dioxide emissions from organic waste allowing it to be converted to biogas, a widely used renewable energy. An additional byproduct is a nutrient rich material that can be used as fertilizer for agriculture.

Clean World Partners is a Sacramento company “established to develop, design, build and manage turnkey anaerobic digestion systems that enable public and private organizations to divert organic waste from landfills and convert it into clean energy and safe, reusable by-products such as compost and clean water.”

According to the EPA, Methane is about 21 times more powerful at trapping heat and warming the atmosphere than carbon dioxide.

Warren Smith a well-known Northern California entrepreneur, co-founder of the Sacramento River Cats baseball team and founder of Raley Field is the CEO of Clean World Partners.

The technology for the Anaerobic Digester is based on work by UC Davis professor Dr. Ruihong Zhang, Ph.D. an internationally recognized leader in organic waste conversion.

Although anaerobic digestion technology is proven to work in a research environment such as the 55,000 gallon demonstration project at UC Davis, there has yet to be construction of a successful commercial system in the U.S. Clean World Partners has proposed constructing a landmark 98 ton-per-day system on the grounds of Folsom Prison to demonstrate anaerobic digestion can be a commercially viable option to continued dumping of organic waste into landfills.

Greenwise Sacramento

Clean World Partners is just one of the organizations that are contributing to the growth of the green and clean technology industry in the Sacramento Region. We can now boast over 70 green tech companies. According to a report released by Palo Alto-based nonprofit Next 10, Sacramento led California in percentage of green job growth from 1995 to 2008, with an 87 percent jump from 7,019 to 13,102. The study showed Sacramento has more green jobs per capita than the Bay Area, Los Angeles or San Diego.

At the center of the effort to grow Sacramento’s green economy and to build the regions brand as a national leader on environmental technology is Mayor Kevin Johnson’s Greenwise Sacramento Initiative. The initiative has brought together a diverse group of individuals to participate on a task force with the goals of diversifying the economy, helping the environment and raising the green IQ and awareness of citizens in our region.

To learn more visit the Greenwise Sacramento website:

http://greenwisesacramento.org

10 Step Program to Cut Your Utility Bills

Jeff — Tue, 13 Jul 2010 23:01:23 +0000

Here’s a good article and graphic from Fine Homebuilding by Martin Holladay, Senior Editor of GreenBuildingAdvisor.com.

It outlines a 10 step program that’s guaranteed to reduce your utility costs. It’s along the lines of the Energy Efficiency Loading Order page found on this site, but includes a pyramid shaped graphic that’s kinda cool.

Energy Efficiency Pyramid - Courtesy of FineHomebuilding .com

As always the first step is a comprehensive energy audit by a BPI certified professional. Next comes airsealing, insulation and envelope measures (not necessarily including windows). Then educating the home owner about simple ways to reduce consumption, lighting upgrades to fluorescent or LED and high efficiency HVAC. Not until you have addressed the efficiency of the building to transfer energy and the climate control systems should you consider adding renewables into the picture. You wouldn’t pour water into a leaky bucket, nor should you add solar or wind generation until you have made the building as efficient as possible. That’s why it’s at the top of the pyramid in the graphic.

http://www.finehomebuilding.com/item/12059/10-ways-to-cut-utility-bills

Window Screens For Allergy Sufferers

Jeff — Mon, 12 Jul 2010 13:00:48 +0000

When I first moved to Sacramento in the summer of 1987, one of the first things I had to get used to was working in construction in 100 degree heat for days on end. Coming from the cool and foggy Bay Area, it took me about 3 years and a million gallons of water before I became acclimated to the heat.

In the last ten years I’ve increasingly had to contend with another issue in our area: allergies. Even indoors I can’t always get relief. Pollens and other irritants get tracked in on our shoes and clothes, and even on pets. In the spring time when I’d like to open the windows I’m hesitant because typical screens only block larger particles, not the finer pollens that can cause allergies.

There is another solution offered by a company called Pollen Tec. They manufacture a window screen fabric they claim can filter out up to 100% of pollens while allowing fresh air to flow into the home. Independent test results verified that 100% of grass pollens, 99.71% of birch pollen, 93.1% of Stinging Nettle-pollen 90.9% pollen and Ragweed were captured by the Pollen Tec screen.

Pollen Tec screens look the same as conventional fiberglass and aluminum screens. They are available as readymade screens for windows and patio doors in roller, hinged, and removable versions. They also offer rolls of the material for replacement applications.

Their website:

www.pollentec.com

No related posts.

Does Fannie Mae and Freddie Mac’s Maneuvering Spell The End of PACE?

Jeff — Thu, 08 Jul 2010 22:56:24 +0000

On Tuesday of this week the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac and over 50% of the mortgages in the United States, issued a statemet which effectively put at end to PACE programs at least temporarily. They instructed their lenders and loan servicers to adjust their underwriting criteria in any area that had a PACE program in place. This means in effect that mortgages and refinances would be subject to a higher threshold of debt to income and loan to value ratios than neighboring areas without PACE programs. Regardless of whether or not borrowers were participating in a PACE program.

PACE as you may know stands for Property Assessed Clean Energy. They are programs put in place by cities and counties to fund energy efficient and renewable energy improvements to properties and are repaid by tax assessment on the individual property. The debt stays with the property if sold, so subsequent new owners would continue making the payments until the loan is repaid as part of their property tax bill.

To protect their residents from unknown financial impact a number of cities and counties have suspended their programs as a result. Placer County announced yesterday they are stopping their program. San Francisco and Santa Clara County have done the same. The 14 county CaliforniaFIRST program which includes Sacramento and Yolo counties, is waiting for further developments before rolling out their program which was planned for fall 2010.

I thought I’d take a look at the specific objections in the FHFA statement and see if they couldn’t be answered by information readily available from the PACE program websites and what I’ve been able to learn in the last few months.

“First liens established by PACE loans are unlike routine tax assessments and pose unusual risk for lenders, servicers and mortgage security investors.”

What qualifies as a routine tax assessment? California law allows the financing of seismic improvements to buildings, setting up of geologic hazard abatement districts to protect property from potential landslides and other dangers and toxic waste remediation to private property. I’ve built homes in some Sacramento neighborhoods where my clients have had to sign on to future assessments for underground utility improvements in order to secure a building permit. Many of these assessments are placed on properties with mortgages already in place to meet some needed upgrade or mitigation.

Pace programs especially in California, have been designed with great care and in coordination with multiple stakeholders including representatives from the financial community. For example, Sonoma County’s program worked closely with a group of banks and lenders active in their area.

2. “The size and duration of PACE loans exceed typical local tax programs and do not have the traditional community benefits associated with taxing initiatives.”

Many of the above mentioned assessment districts create liens in excess of the average PACE project. None of those traditional public improvements can produce an offsetting cash flow which can be realized by reducing a building’s energy consumption or producing its own renewable energy. If people have significantly lower utility bills they have more money to pay their other obligations. In addition, energy improvements add value to a property which is the basic premise of land-secured financing.

Let’s not forget the greater community benefits of reduced consumption of fossil fuels. I think reducing our dependence on foreign sources along with the risk of environmental disasters like we’re witnessing in the Gulf of Mexico qualifies as community if not national benefits.

3. “Underwriting for PACE programs results in collateral-based lending rather than based upon ability-to-pay, the absence of Truth-in-Lending Act and other consumer protections, and uncertainty as to whether the home improvements actually produce meaningful reductions in energy consumption.”

The CaliforniaFIRST Program screens the property, the property owner and the contractors performing the work. Property owners who wish to participate have to be current on the mortgage with no defaults or foreclosures in the last 5 years. They must be current on their property taxes for the proceeding 3 years and can have no involuntary liens on the title.

The maximum loan to value ratio cannot exceed 10% and they must have 20% equity in their property. This last fact will disqualify quite a number of people due to falling housing prices. It is a great opportunity for owners of older properties that have equity or own outright.

As far as disclosing program costs to borrowers, each applicant is required to attend a workshop where they are provided detailed information on all costs prior to any financial commitment. They are made aware in writing that they must repay the tax obligation regardless of personal financial circumstances and that failure to do so in full or part can result in the eventual foreclosure of the property by the County Tax Collector’s office.

Other consumer protections include:

Vetting of all contractor participants for professional qualifications and proper insurance requirements.
Independent 3^rd party verification of a random selection of each contractor’s projects equaling a minimum 20% of completed work.
Pre-work and post work energy audit and testing done by a certified energy auditor.
Computer energy modeling of the project to provide an effective design before the project commences. This is also subject to the 3^rd party verification process to ensure accuracy of results.

As I’ve stated in previous posts, I can see where the big lenders need to be cautious. They behaved irresponsibly and reaped the consequences. As a result of their over-zealous lending practices and what appears in retrospect to be a complete absence of underwriting criteria why would they trust a new program even with obvious benefits, when they can’t even be trusted themselves?

The unfortunate part is we as a nation have suffered as result of their mistakes. Why now add insult to injury by denying access to a funding mechanism that can aid in a sustainable economic recovery? Let them raise their concerns they need to be an integral part of the process, but don’t strangle a beneficial program by walking away from the discussion.

Unfortunately the only resolution may come from Congress. PACE advocates have been working with legislators to come up with a solution that satisfies all parties.

One of those advocates is Renewable Funding the organization administering the CaliforniaFIRST program. Chris Stanton VP of Marketing had this to say, “This is not the final word on PACE, there’s a lot of support in Congress, and we’ll be working with advocates to find a legislative solution.”

Placer County PACE Program Suspended Indefinitely

Jeff — Wed, 07 Jul 2010 23:02:24 +0000

In a response to Fannie Mae and Freddie Mac’s latest instructions to their lenders, Placer County has suspended their mPower PACE program indefinitely.
On Tusday of this week, the Federal Housing Finance Administration adjusted their underwriting criteria in communities that have PACE programs to reflect increased loan-to-value ratios and debt-to-income ratios on all properties regardless of whether or not borrowers were participating in the program. So much for supporting energy efficiency.
More information can be found in today’s Sacramento Business Journal:
http://sacramento.bizjournals.com/sacramento/stories/2010/07/05/daily36.html

FHFA has legitimate concerns. These programs are new and they don’t know how to evaluate them. They were hard hit as a result of the mortgage meltdown (largely due to their own policies), are financially stressed and risk adverse. That being said, to put pressure on local municipalities by virtually threatening them with this latest policy is counterproductive to economic recovery and heavy-handed to say the least.

Negotiations have been ongoing between the mortgage industry and PACE advocates as well as work on the legislative level with members of Congress. This latest development would seem to signal a move by the FHFA away from constructive dialogue. Let’s hope that’s not the case.