More than $26 million of upfront financing for energy efficiency and renewable retrofits on commercial and residential properties in the City of Sacramento are complete or in the works under a public-private program launched earlier this year. Another $6 million in similar project financing offered by the program, Clean Energy Sacramento, for additional efficiency and solar project installations via a redesigned Property Assessed Clean Energy (PACE) program has been preapproved. \u201cTogether we are creating local jobs, reducing emissions, and putting Sacramento on the map as a national leader in sustainability," Sacramento Mayor Kevin Johnson stated July 30. Clean Energy Sacramento, offers \u201cproperty owners a simple and easy option to finance their home energy improvements at no upfront cost, and without any taxpayer money,\u201d said Stacey Lawson, Yrene Energy Fund chief executive officer. Clean Energy Sacramento is a City-Ygrene partnership to provide up front retrofit financing to qualifying properties, in exchange for augmented property taxes on the individual parcel. On a dollar basis, about 80 percent of the upfront retrofit financing has gone to larger commercial projects, but the number of financed projects is equally split between residential and commercial properties, Lawson told Current. The total $26 million in project financing includes $3 million approved this week under the city\u2019s PACE-like funding program for energy efficiency installations at a large real estate facility at a corporate park in Sacramento. It is expected to cut the annual utility of the owner, Metzler Real Estate, by a quarter\u2014or $140,000. In addition, it is supposed to support about 50 construction jobs. Sacramento\u2019s financing scheme is a variation of the once popular PACE programs begun in Berkeley. Under it, cities and counties offer property owners financing in exchange for long-term property assessments that include a set interest rate. In 2010, the Federal Housing Finance Agency, which handles about 50 percent of the home mortgages in the U.S., effectively halted the program because of fears it could worsen the lending crisis. The rub was that PACE repayments were put ahead of Fannie Mae and Freddie Mac mortgage repayments. Thus, rules were put in place requiring federal residential mortgages be paid off at the time of a sale or refinancing of a home with PACE financed clean energy installations. In response, many municipalities froze or halted their programs. Under legislation enacted in 2012, SB 555 by Sen. Loni Hancock (D-Oakland), cities can offer upfront financing for retrofits under an expansion of the state Mello-Roos Act. \tUnder that 1985 act, street lights, and schools, libraries and other public construction projects have been funded via creation of a special district, which spreads the costs among those who live in the territory. That effectively has lowered builders\u2019 costs and the price of new homes. Hancock\u2019s bill allows upfront financing for efficiency, renewable energy, and water conservation to qualify for funding under Mello-Roos, but with a twist. For example, the city of Sacramento established itself as a Community Financing District under SB 555. All properties seeking renewable and conservation retrofits that meet specified underwriting criteria, including holding a 15 percent equity interest in the property and being current on all property tax and mortgages, qualify for this funding. The twist is that Mello-Roos requires a two-thirds vote to qualify for special district funding. Under SB 555, that two-thirds vote requirement extends only to the individual property owner(s), not all who live in Sacramento. In addition, the repayment by those who choose and qualify for PACE funding, are via taxes over a five-, 10- or 20-year period. Earlier, PACE financing repayment was via a property assessment, which is similar but technically different. Bundling loans under PACE programs in Sacramento and elsewhere is said to lower lending interest rates. Clean Energy Sacramento rates are between 4.95 percent and 6.95 percent, said Lawson. The other two remaining PACE programs in California are in Sonoma and Placer Counties. Of the almost 5,000 properties that received upfront financing for clean energy retrofits in California, only four of those were directed by the federal mortgage entity to repay their mortgage before the home was sold or refinanced, according to Lawson. Sacramento Clean Energy launched in January. The public\/private venture sought and was granted court validation of the city financing program by the Superior Court. At the end of March, the Sacramento County Board of Supervisors officially formed a Mello-Roos Community Financing District to offer PACE financing within the unincorporated County. Six incorporated cities\u2014Citrus Heights, Elk Grove, Folsom, Galt, Isleton, and Rancho Cordova\u2014can opt into this program (Current, April 5, 2013). Court validation of the county program, as well as Yolo County\u2019s PACE program, is being sought, said Lawson. That process allows opponents to have their say. Rulings are expected later this year.