A federal court in California has ordered the regulator for Fannie/Freddie to re-evaluate its prohibition on holding mortgages on or insuring properties encumbered by a PACE loan for clean energy improvements. 

Many of you will recall that Florida adopted enabling legislation to allow local governments to make loans for clean energy and efficiency improvements to homes and then collect those loans through an assessment on the tax bill.   Since these loans take priority over existing mortgages, the lenders were understandably concerned and the regulator restricted Fannie/Freddie's handling of encumbered properties.  As a result, we have seen few local governments in Florida implement the loan program at all. 

But depending on the outcome of the review described in this Article, we may have to learn more about PACE.