Proposals to make financing clean energy production at individual homes and buildings first showed up in 2001 in San Francisco as a voter-approved solar bond program, and in 2005 in the Monterey Bay Regional Energy Plan.

These strategies were seen as a way to help property owners avoid up-front costs to install or retrofit energy-efficient or clean-energy equipment. But a 2010 decision at the federal level has prevented most homeowners from participating.

New legislation announced by U.S. Rep. Mike Thompson may reopen that opportunity, allowing homeowners to join owners of commercial and industrial properties in taking advantage of the special financing.

Those early efforts in Monterey and San Francisco, later picked up in Berkeley, evolved into the Property Assessed Clean Energy (PACE) programs.

Among them is CaliforniaFIRST, viewed as a way to help the state meet its greenhouse gas reduction targets while letting property owners pay the costs gradually through annual additional tax assessments.

Owners of single-family homes who wanted PACE financing for their own upgrades ran headlong into problems in July 2010, when the Federal Housing Finance Agency (FHFA) objected to the program’s insistence on senior lien status.

FHFA advised its two federal home loan underwriters, Fannie Mae and Freddie Mac, against buying residential mortgages with PACE assessments. Commercial and industrial properties weren’t affected by the directive.

Agency spokespersons said the policy guidance was issued because of concerns that for PACE-assessed properties in foreclosure, the PACE assessment would be repaid before either Fannie Mae and Freddie Mac, which insured the mortgage.

Those two underwrite a majority of new mortgages, so the directive prevented most homeowners from being able to participate in PACE.

Benicia’s Community Sustainability Commission and the city Climate Action Plan Coordinator, Alex Porteshawver, have been pursing alternatives so that PACE funding could be encouraged in Benicia, and have faced these same obstacles.

But a bipartisan bill introduced by three congressmen, including Thompson, the Napa Democrat who represents Benicia, may change that.

Thompson’s office announced this week that he, U.S. Rep. Pete King, R-N.Y., and Sean Patrick Maloney, D-N.Y., have introduced the bipartisan Property Assessed Clean Energy Assessment Protection Act of 2014, also labeled H.R. 4285.

Thompson said the legislation “helps spur local job creation and increase energy efficiency by enabling state and local governments to develop and implement PACE programs through local government financing of residential and non-residential energy efficiency improvements.”

Citing the way it pays up-front costs for purchase and installation of efficient energy upgrades and permits payment through property taxation, Thompson called PACE “one of the most innovative and successful solutions to our nation’s energy crisis.”

He said Sonoma County, part of which is in his district, has one of the most successful PACE programs in the country.

“PACE has been responsible for more than $53 million in local investment and has helped create and support more than 700 jobs,” he said.

The PACE Assessment Protection Act would direct FHFA to rescind its 2010 directive to Fannie Mae and Freddie Mac to discontinue guaranteeing mortgages with PACE assessments, Thompson said.

This policy guidance treats PACE differently than any other assessment, he said.

“Under many state and local laws, most assessments, like property taxes and homeowner association liens, are repaid before the government-sponsored enterprises and other mortgage holders,” he said.

To address FHFA’s specific concerns, the bill would protect Fannie Mae and Freddie Mac from financial risk by establishing minimum underwriting standards to ensure that homeowners are able to afford the PACE assessments, Thompson said.

The legislation is supported by the U.S. Conference of Mayors, National League of Cities, California State Association of Counties and the Solar Energy Industries Association, he said. The bill has been referred to the House Committee on Financial Services.

“PACE is a voluntary program that allows state and local governments to work together to meet the economic and environmental needs of their communities at no cost to taxpayers,” Thompson said.

“The program is not mandated by Washington, D.C., so communities, which know better than Washington what suits their local needs, can make PACE work for them.”