A recent ruling by the Federal Housing Finance Agency has stalled a new loan program that could help Binghamton homeowners afford energy-saving technologies, reports the Press & Sun Bulletin.

The Binghamton Energy Efficiency (Be2) Loan Program establishes long-term loans to help homeowners pay for energy-efficient upgrades. The loan covers the initial costs of an energy audit and cost-effective retrofits and is then repaid over several years through property tax assessments. The Be2 program is funded with $200,000 from the Property Assessed Clean Energy

(PACE) program, which currently allocates $150 million to communities nationwide.The ruling puts the program, which was set to commence in September, at a standstill.

The Federal Housing Finance Agency cites credit risk as its primary issue with the program, claiming that the new tax obligation would take priority over the mortgage if the homeowner defaults.  Edward J. DeMarco, the agency's acting director, stated "Mortgage holders should not be forced to absorb new credit risks after they have already purchased or guaranteed a mortgage." People within the PACE program, however, refuted this claim by pointing out that only the delinquent tax bill for one year gets paid off prior to the mortgage.

The ruling has upset Binghamton officials as well as environmental groups and other communities that have followed PACE programs.  California Attorney General Jerry Brown has filed a suit in defense of the state, challenging the directive. In addition, four U.S. senators, including Kirsten Gillibrand of New York, have created legislation aimed at maintaining the PACE program.