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Felix Adamo / The Californian

Solar panels cover almost the entire western exposure of this house in southwest Bakersfield.

Gov. Jerry Brown and state Treasurer Bill Lockyer announced the creation Tuesday of a $10 million loss reserve program that could some day make it easier for Bakersfield homeowners to finance energy-efficient upgrades to their houses.

Property Assessed Clean Energy programs, which let homeowners pay for renovations ranging from new weatherstripping to solar panels through their property tax bills, have been popular statewide.

One such program, Home Energy Renovation Opportunity, which went live Monday in unincorporated Kern County, has financed $170 million in renovations in 125 California cities since 2011. A HERO official estimates the program has saved homeowners $383 million in energy costs.

The Federal Housing Finance Agency, however, has a different opinion -- and it's prompted the city of Bakersfield to hold off on joining HERO.

In 2011, the FHFA prohibited federal home loan banks Fannie Mae and Freddie Mac from buying mortgages on properties with PACE liens -- because in a default, PACE terms specify it gets paid before the lender.

FHFA statements had a chilling effect on PACE programs statewide including two, CaliforniaFIRST and Figtree, that Bakersfield offers its residents.

As a result of FHFA's statements, neither of these programs offers a residential PACE option to Bakersfield residents.

The governor and the treasurer hope that changes.

The $10 million fund will reimburse lenders for any PACE payments they pay on properties in foreclosure, or to cover overdue PACE payments counties face if they sell properties for unpaid taxes.

"As California confronts a severe drought and a rapidly changing climate, this program gives homeowners another opportunity to do their part," Brown said in a statement.

Lockyer agreed.

"The loss reserve program should allow PACE financing to flourish," the treasurer said in a statement.

A Lockyer spokesman was more explicit.

"We hope and expect this satisfies the federal government's concerns," said Bill Ainsworth, a Lockyer representative.

Steve Teglia, an assistant to City Manager Alan Tandy, said city officials will be contacting the FHFA to see what the agency thinks of the loss reserve fund.

"I think our plan is now actually trying to reach out to FHFA on our own to see what their response is," Teglia said. "It's not an overnight change for us but it's certainly moving in the right direction."

In an email, a FHFA spokeswoman declined to comment on whether the loss reserve fund could prompt the agency to relax its position on PACE programs.