Many homeowners who participated in a program that let them repay the cost of solar panels and energy efficiency improvements through an annual surcharge on their property taxes must pay off the loans before they can refinance their mortgages.

It's up to Congress to fix the problems with the energy-efficiency loan program.This guidance came from Fannie Mae and Freddie Mac this week as efforts to resolve a dispute over the program - called Property Assessed Clean Energy, or PACE - have failed.

Approved by 22 states, PACE programs let municipalities sell bonds to finance improvements in energy efficiency. Homeowners typically pay back the loans over 20 years through an annual property tax assessment. As is the case with other property tax assessments, a lien is placed on the home that has priority over the mortgage if the homeowner defaults.

On Tuesday, Fannie and Freddie issued guidance to lenders stating that borrowers with sufficient equity in their homes must pay off the loans before refinancing, the New York Times. Those homeowners without enough equity to take cash out of their home to pay off the lien can refinance with the loan in place.

PACE proponents have argued that the program overcomes obstacles to installing expensive solar panels and making other energy efficiency improvements that reduce greenhouse-gas emissions, while also creating green jobs.

In response to the Federal Housing Finance Agency's actions, the California attorney general's office filed a lawsuit in July against Fannie and Freddie, as did the Sierra Club. Meanwhile, legislation has been introduced in Congress to allow the program to go forward.