A federal appeals court ruling struck a blow to a financing program for energy efficiency and water conservation projects on homes when it upheld a decision last week by the FHFA prohibiting participation by Fannie Mae and Freddie Mac.

Property Assessed Clean Energy (PACE) allows residential and commercial property owners to use municipal bonds to finance energy efficiency and water conservation projects. The costs are financed by bonds and repaid typically over a 15- to 20-year period by property owners in property tax assessments.

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