While Mayor Bramson continues his full court press to ram through the GreeNR initiative: homeowners beware! Overall most people agree we need to be more respectful of our environment. Most would concur that indeed we need to reverse the environmental intolerance of the past. But as in most cases the devil’s in the details. Short-term goals in any Green initiative are easily attainable, common sense recommendations that can be easily achieved at minimal cost to homeowners. The mid to long-range achievements are laudable provided the means do not outweigh the benefits or become overly restrictive in the normal realm of home ownership. Under the GreeNR initiative, which was tailored after Mayor Bloomberg’s NYC plan including congestive auto pricing, special loans would be available for home greening projects. These Green Liens have many different names but all are recognized as PACE (Property Assessed Clean Energy) loans. As their name implies these loans are overly restrictive since they deal with property assessment by acquiring a priority lien over existing mortgages according to
the Federal Housing Finance Agency (FHFA) statement issued June, 6, 2010:
PACE loans allow communities who adopt Green Initiatives to finance PACE loans by mandating repayment through a new property tax assessment. As anyone who has had any exposure to the world of real estate knows any assessment transfers at time of sale to the buyer. These loans further complicate home ownership, in the 23 states that have adopted PACE loans repayment is achieved through homeowner’s property tax bills over 15 to 20 years.
The two largest mortgage lenders, Fannie Mae & Freddie Mac, have raised serious concerns over mortgages with unpaid or delinquent PACE loans as reported in the Wall Street Journal and now will no longer finance mortgages with PACE loans.
The New York Times reported that most PACE programs have halted:
In July, the Federal Housing Finance Agency, which oversees Fannie and Freddie, effectively derailed the program when it issued guidance to lenders stating that the liens violated the agency’s underwriting standards. Fannie and Freddie buy and sell most of the nation’s home mortgages.
That guidance led to the halt of most PACE programs and left in limbo those homeowners who had already taken out energy improvement loans
There are other major concerns about the GreeNR initiative, which could put the City of New Rochelle at risk. The initiative calls for City “certification” of properties including an official “GreeNR Decal” verifying compliance. New Rochelle has over 3,000 open building permits dating back to the 60’s & 70’s and admits it doesn’t have the manpower to finalize these violations in a timely manner. Who then would perform the required GreeNR Inspections? Will New Rochelle hire new GreeNR inspectors before saving six firefighters slated for termination in June if the SAFER grant is not obtained? Will 3,000 + open building permits remain a legal liability in favor of implementing GreeNR and adopting new GreeNR tax assessments? Will home sales in New Rochelle plummet due to mortgage denials based on current or delinquent GreeNR tax assessments?
Until the mortgage gridlock over PACE loans and GreeNR certification is resolved, New Rochelle should proceed slowly, adopt short-term goals and proceed cautiously toward achieving mid and long-term goals. Adopting the GreeNR initiative in its entirety at this juncture without due diligence, would be akin to cutting off one's nose to spite their face.
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