Fannie Mae and Freddie Mac have vetoed the White House backed green financing program which is alternatively known as Property Assessed Clean Energy (PACE). The state and other federal officials had argued that the loans made under the green financing program are safe and the repayment takes priority over the home loans. However Fannie Mae and Freddie Mac have rejected their arguments. According to the Federal Housing Finance Agency (FHFA), the PACE loans may create unusual challenges for the mortgage investors and servicers.