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The Federal Housing Finance Agency (FHFA) regulates Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks (the government-sponsored enterprises – GSEs). On July 6, 2010, FHFA and the Office of the Comptroller of the Currency (OCC) concluded that Property Assessed Clean Energy (PACE)1 programs "present significant safety and soundness concerns" to the housing finance industry. This statement came after a year of discussions with state and federal agencies in which PACE, a novel mechanism for financing energy efficiency and renewable energy improvements, has gone from receiving support from the White House,3 canonization as one of Scientific American's "World Changing Ideas"4 and legislative adoption in 24 states to questionable relevance, at least in the residential sector. Whether PACE resumes its expansion as an innovative tool for financing energy efficiency and clean generation depends on outcomes in each of the three branches of government – discussions on a PACE pilot phase among federal agencies, litigation in federal court, and legislation in Congress – all highly uncertain. This policy brief addresses the practical impacts of these possible outcomes on existing and emerging PACE programs across the United States and potential paths forward.