Fannie Mae in Talks on Green Energy Initiative

Fannie Mae still speaks loudly in the housing market, and a quiet letter it sent has led to intense negotiation about the future of green financing that could seriously affect your mortgage payment and your planet.

In a HousingWatch exclusive, we have learned that influential players inside and outside government are mediating between Fannie Mae and proponents of new, more-affordable financing for green homes. The new financing comes in the form of PACE bonds, which could make green retrofits more widely available to homeowners.

But they also can threaten the government-sponsored agency's first claim on mortgages.

To understand the flap, it helps to imagine Fannie and Freddie as chastened adults who have exhausted their funds and moved back in with Mom and Dad. They want desperately to show that they will no longer take on undue risk when using someone else's money.

Now imagine the PACE (property-assessed clean energy) bonds program, authorized in a handful of cities and states, as the eager younger sibling with cool friends who wants some angel capital from Mom and Dad.