In 2010, the NH legislature passed HB1554 that enables municipalities to create Property Assessed Clean Energy (PACE) Districts. Through PACE programs, residents and business owners are able to finance energy efficiency and renewable energy improvements through an additional assessment on their property tax bills or other municipal bill.
On July 6, 2010, the Federal Housing and Finance Authority (FHFA), the body that regulates home mortgage lending, issued guidance cautioning Fannie Mae and Freddie Mac about purchasing mortgages on properties with PACE financing attached in a priority lien position. PACE programs for commercial sector and in subordinate lien positions remain unaffected by the guidance. This guidance has subsequently caused many jurisdictions to consider alternative options to PACE for the residential sector, and has caused the suspension of some programs.
Subsequently in 2011, the NH Legislature passed HB144 to reform the PACE statute. These modifications included:
- PACE loans must be in a subordinate position
- If municipal bonding is sought to capitalize the program, it must be done as a revenue bond
- A loan loss reserve is required, and must be funded through sources other than municipal bonding
- Prohibits the use of municipal bonding for revolving loan fund for a PACE Program
As the state and federal landscape on PACE continue to evolve, OEP advises municipalities to be cautious in moving forward with PACE programs.
For information on renewable energy, contact:
Energy Policy Analyst
Office of Energy and Planning
Governor Hugh J. Gallen State Office Park
Johnson Hall, 3rd Floor
107 Pleasant Street
Concord, NH 03301
VOICE: (603) 271-1759
FAX: (603) 271-2615