The state of California is suing federal mortgage lending giants Fannie Mae and Freddie Mac for blocking implementation of a program that helps property owners to install solar energy systems, it was announced today at a San Diego news conference.

State Attorney General Jerry Brown also announced that he sent a letter to President Barack Obama, asking the nation's chief justice to intervene so that the problem might be solved without litigation.

Brown said officials with Fannie Mae and Freddie Mae have apparently interpreted the Property Assessed Clean Energy program as a loan instead of an assessment, making PACE impermissible under their rules. The program actually involves an assessment, he said.

The two lenders are "shell-shocked" because of their roles in the financial crisis and "are running so scared they don't know a good deal when they see it," said Brown, who is running for his old job as California governor.

Thirteen of the 18 cities in San Diego County and the unincorporated areas are set to take part in PACE. Local officials said nearly 1,000 city of San Diego residents are signed up, ready to take advantage of the program when it's cleared.

Under PACE, residents are given financial assistance to install solar energy systems, and the money is paid back in property tax assessments that are spread out over a decade or more.

"The fact is that the risk to mortgage lenders is practically nil," San Diego Mayor Jerry Sanders said.

The plan makes it financially feasible to install solar energy even if the homeowner doesn't plan to stay in the residence for the long-term, Sanders said.

Brown was also flanked by members of the county Board of Supervisors, a San Diego city councilwoman and two members of the state Assembly.

Noting that several were Republicans, Brown, a Democrat, said it was "a bipartisan issue" to create jobs, foster energy independence, lower utility bills and improve the environment.

He said he hoped members of the local congressional delegation would join the effort, as well as attorneys general in the 29 other states trying to put in PACE programs.

Since a lawsuit could take years to resolve, Brown said he hoped the president could use his influence to get Fannie Mae and Freddie Mac to reverse decisions that he claimed violate both federal and California law.

"The last thing we need is more litigation and more red tape," Brown said.

FEATURED PODCAST KPBS' daily news podcast covering local politics, education, health, environment, the border and more. New episodes are ready weekday mornings so you can listen on your morning commute.





Sign up for Today's Top Stories newsletter Need help keeping up with the news that matters most? Get the day's top news — ranging from local to international — straight to your inbox each weekday morning. Enter your email address

To view PDF documents, Download Acrobat Reader.