Sonoma County energy program suffers steep decline in participation

Participation in Sonoma County's ground-breaking energy retrofit program for homes and businesses has dropped dramatically over the past six weeks, and recently issued federal rules are to blame, county officials said.

Since July 6, when federal housing officials said the retrofit program and others like it posed a risk to the government-chartered mortgage giants Fannie Mae and Freddy Mac and ordered a clamp down in lending practices, the average number of weekly applications received by the county's program has dropped by nearly half; signed contracts are down by a third.

Total applications received in the six-week period this year are down 58 percent from the same period last year. Contracts have dropped 75 percent. More than 20 participants have also pulled out of the program since last month.

"This should be our busy season," said Liz Yager, program coordinator of the Sonoma County Energy Independence Program. "(But) a number of people we've talked to that are interested are in a wait-and-see mode."

The hesitation stems from the possible repercussions for a home or business owner of signing up with the program, county officials said.

Many could have trouble refinancing their mortgage or selling their house because of new federal rules.

In the extreme case, a program participant could also be considered in default on their mortgage, not because of any mortgage payment problems, but because of the way retrofit money is repaid.

And, just because they live in a county where a retrofit program is offered, Sonoma County's 100,000 home mortgage holders, most of whom have no connection with the program, could also see their borrowing limits reduced by as much as 10 percent.

"There's so much uncertainty among people about what actions Freddy (Mac) and Fannie (Mae) might take," said Yager.

The new rules were issued by the Federal Housing Finance Agency, which oversees the two mortgage giants. Their beef is with the way the county and municipalities with similar programs — known as Property Assessed Clean Energy, or PACE — seek repayment for the money they lend to property owners for retrofits.

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