As Vancouver works out a plan to begin financing home energy retrofit loans through its property taxes next year, the U.S. program on which it was modelled has come to a screeching halt after federal housing regulators raised concerns about the financial risk.
Municipalities in the U.S. that were giving retrofit loans to homeowners on the proviso they repay them as special assessments on their property-tax bills were shut down in July by the Federal Housing Financing Agency after it grew concerned the plan would put mortgage holders at greater risk of defaults.
Hundreds of towns and cities in 22 states had just started to loan out retrofit money under locally administered "Property Assessed Clean Energy" programs that required homeowners to repay the funds over 20 years on their tax bills. Those bills take precedence over conventional mortgages.
The federal agency, which administers the government insurance programs that underwrite most bank mortgages, said it was concerned large PACE loans could affect the ability of homeowners to pay their mortgages.
But one of the architects of Vancouver's similar "on-tax-bill financing program" said he's not worried about the American experience and promised the city will resolve those issues before it proceeds.
Deputy city manager Sadhu Johnston said Vancouver is aware of the PACE problems. But he said the city doesn't think they are an insurmountable obstacle for its plan, even though many details still need to be worked out, including whether taxpayers would be at risk in the event of a default.
"The bottom line is that we are looking to learn from the experiences there. A lot of what happened there is fallout from the meltdown in the mortgage industry. Everyone there is really skittish," said Johnston. "Our goal is to learn from what they've done and take those lessons and tweak the program."
Municipalities in the U.S. that were giving retrofit loans to homeowners on the proviso they repay them as special assessments on their property-tax bills were shut down in July by the Federal Housing Financing Agency after it grew concerned the plan would put mortgage holders at greater risk of defaults.
Hundreds of towns and cities in 22 states had just started to loan out retrofit money under locally administered "Property Assessed Clean Energy" programs that required homeowners to repay the funds over 20 years on their tax bills. Those bills take precedence over conventional mortgages.
The federal agency, which administers the government insurance programs that underwrite most bank mortgages, said it was concerned large PACE loans could affect the ability of homeowners to pay their mortgages.
But one of the architects of Vancouver's similar "on-tax-bill financing program" said he's not worried about the American experience and promised the city will resolve those issues before it proceeds.
Deputy city manager Sadhu Johnston said Vancouver is aware of the PACE problems. But he said the city doesn't think they are an insurmountable obstacle for its plan, even though many details still need to be worked out, including whether taxpayers would be at risk in the event of a default.
"The bottom line is that we are looking to learn from the experiences there. A lot of what happened there is fallout from the meltdown in the mortgage industry. Everyone there is really skittish," said Johnston. "Our goal is to learn from what they've done and take those lessons and tweak the program."
