RELATING TO THE RENTAL HOUSING REVOLVING FUND.

HB1723

HOUSE OF REPRESENTATIVES

H.B. NO.

1723

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the rental housing REVOLVING fund
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION
1
.
�
Section 201H-202, Hawaii Revised Statutes, is
amended as follows:

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1.
�
By amending subsections (c) and (d) to read:

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"(c)
�
The following may be deposited into the fund[
:
]

or into the mixed-income subaccount established under subsection (f):

����
(1)
�
Appropriations made by the legislature;

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(2)
�
Conveyance taxes pursuant to section
247-7;

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(3)
�
Private contributions;

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(4)
�
Repayment of loans;

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(5)
�
Interest;

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(6)
�
Other returns; and

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(7)
�
Moneys from other sources.

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(d)
�
[
Except
]
Notwithstanding any law to
the contrary, and except
as provided in subsection (f), the fund shall be
used to provide [
loans
]
any and all forms of financing, including but
not limited to loans, equity investments, credit enhancement, and collateral

for the development, pre-development, construction, acquisition, preservation,
and substantial rehabilitation of rental housing units.
�
The corporation shall not forgive any loan
made from the fund unless the corporation forecloses on the project.
�
Permitted uses of the fund may include but
are not limited to planning, design, land acquisition, costs of options,
agreements of sale, downpayments, equity financing, capacity building of
nonprofit housing developers, credit enhancement, gap financing, or other
housing development services or activities as provided in rules adopted by the
corporation pursuant to chapter 91.
�
The
rules may provide for a means of recapturing loans or grants made from the fund
if a rental housing project financed under the fund is refinanced or sold at a
later date.
�
The rules may also provide
that moneys from the fund shall be leveraged with other financial resources to
the extent possible."

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2.
�
By amending subsection (f) to read:

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"(f)
�
There is established within the fund a
mixed-income subaccount.
�
Moneys in the
mixed-income subaccount shall be used for
any and all forms of
financing,
including but not limited to loans, equity investments, [
and
] credit
enhancement,
and collateral,
for mixed-income rentals
or for-sale
projects, or units in a mixed‑income rental or for-sale project, exclusively

for qualified residents as defined in section 201H-32.
�
The corporation may transfer moneys between
the mixed-income subaccount and the rental housing revolving fund without
requiring legislative approval.
�
The
corporation shall establish an application process for the allocation of funds
in the mixed‑income subaccount, separate from the fund allocation process
pursuant to section 201H-204(c), that gives preference to projects meeting the
following criteria:

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[
(1)
�
A diverse range of affordability,
prioritizing persons and families with incomes up to one hundred forty per cent
of the median family income;

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(2)
]

(1)
�

Projects located on state or county owned land or developed in
partnership with the State or a county;

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[
(3)
]

(2)
�

Projects that [
efficiently use state funding;
]
require
the least state funding per unit and have the shortest loan repayment term;

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[
(4)
]

(3)
�

Mixed-income rental projects or units in a mixed‑income
rental project in an area that satisfy transit‑supportive density
requirements, as defined in section 206E-246; [
and
]

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(4)
�
Rental and for-sale housing projects
that price units at the minimum level to be revenue neutral, as determined by
rules adopted by the corporation pursuant to chapter 91;

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(5)
�
Projects with a perpetual
affordability commitment; and

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[
(5)
]

(6)
�

Any other criteria as the corporation deems necessary to carry
out the purposes of this subsection.

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If
the corporation, after applying the process described in this subsection, finds
a nonprofit or government project equally ranked with a for-profit project, the
corporation shall give preference to the nonprofit or government project in
allotting funds from the mixed-income subaccount.

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Moneys
derived from the repayment of loans funded by the mixed-income subaccount,
interest thereon, and related fees and returns shall be deposited into the [
fund.
]

subaccount.
"

����
SECTION

2
.
�
Section
201H-204, Hawaii Revised Statutes, is amended by amending subsections (a) and
(b) to read as follows:

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"(a)
�
Activities eligible for assistance from the
fund shall include but not be limited to:

����
(1)
�
New construction, rehabilitation, or
preservation of low-income
or mixed-income
rental housing units that
meet the criteria for eligibility described in subsection (c) or section
201H-202(f);

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(2)
�
The leveraging of moneys with the use
of fund assets;

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(3)
�
Pre-development activity grants or
loans to nonprofit organizations; and

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(4)
�
Acquisition of housing units for the
purpose of preservation as low-income or very low-income housing.

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(b)
�
Preference shall be given to projects
producing units in at least one of the following categories:

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(1)
�
Multifamily units;

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(2)
�
Attached single-family units;

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(3)
�
Apartments;

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(4)
�
Townhouses;

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(5)
�
Housing units above commercial or
industrial space;

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(6)
�
Single room occupancy units;

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(7)
�
Accessory apartment units;

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(8)
�
Employee housing;

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(9)
�
United States Department of Housing and
Urban Development mixed finance development of public housing units; and

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(10)
�
Other types of units meeting the
criteria for eligibility set forth in subsection (c)[
.
]
or section
201H-202(f).
"

����
SECTION
3.
�
Section 247-7, Hawaii Revised
Statutes, is amended to read as follows:

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"
�247-7
�
Disposition of taxes.
�
All taxes collected under this chapter shall
be paid into the state treasury to the credit of the general fund of the State,
to be used and expended for the purposes for which the general fund was created
and exists by law; provided that of the taxes collected each fiscal year:

����
(1)
�
Ten per cent or $5,100,000, whichever is less,
shall be paid into the land conservation fund established pursuant to section
173A-5; and

����
(2)
�
Fifty per cent or $38,000,000, whichever is
less, shall be paid into the rental housing revolving fund established by
section 201H-202[
.
]
; provided that funds allocated under this
paragraph may be transferred into the
mixed-income subaccount
established pursuant to section 201H-202(f).
"

����
SECTION
4.
�
There is appropriated out of the
general revenues of the State of Hawaii the sum of
$ or so much
thereof as may be necessary for fiscal year 2026-2027 to be deposited into the
mixed-income subaccount for the rental housing revolving fund established
pursuant to section 201H‑202(f), Hawaii Revised Statutes.

����
SECTION

5
.
�
There
is appropriated out of the mixed-income subaccount of the rental housing
revolving fund established pursuant to section 201H-202(f), Hawaii Revised
Statutes, the sum of $
or so much thereof as may be necessary for fiscal year 2026-2027 for the
purposes of the subaccount.

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The
sum appropriated shall be expended by the Hawaii housing finance and
development corporation for the purposes of this Act.

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SECTION
6.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION
7.
�
This Act shall take effect on July 1,
2050; provided that sections 1, 2, and 3 of this Act shall be repealed on June
30, 2030, and sections 201H-202, 201H-204, and 247-7, Hawaii Revised Statutes,
shall be reenacted in the form in which they read on the day before the
effective date of Act 159, Session Laws of Hawaii 2025.

INTRODUCED BY:

_____________________________

Report Title:

HHFDC;
RHRF; Mixed-Income Subaccount; Project Criteria; Conveyance Tax; Appropriations

Description:

Revises the Mixed-Income Subaccount within the Rental Housing
Revolving Fund by modifying the priority list for project funding and adding
new project priority criteria.
�
Authorizes
fund transfers between the Mixed-Income Subaccount without legislative
approval.
�
Authorizes conveyance tax
revenues deposited into the Rental Housing Revolving Fund to be transferred to
the Mixed-Income Subaccount.
�
Appropriates
funds.
�
Effective 7/1/2050.

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not legislation or evidence of legislative intent.