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SB2344
THE SENATE
S.B. NO.
2344
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to housing
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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Chapter 201H,
Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated
and to read as follows:
"
Part . affordable
homeownership and rental supply programs
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�201H-A Definitions.
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As used in this part:
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"Eligible developer" means a
developer that meets eligibility requirements pursuant to section 201H-C(a)(3),
(4), and (5).
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"Eligible homebuyer" means a
homebuyer who meets eligibility requirements pursuant to section 201H-F.
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"Middle-income household" means a
household whose gross household income does not exceed:
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(1)
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per cent of the area median income for a family with children as determined by
the United States Department of Housing and Urban Development; and
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(2)
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per cent of the area median income for a family without children as determined
by the United States Department of Housing and Urban Development.
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"Rental housing project" means a
project approved for interim financing by the corporation pursuant to section
201H-D.
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�201H-B Identification of
underutilized lands; public land inventory; assistance.
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(a)
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The corporation shall partner with landowners, including the counties
and state and federal agencies, to identify low-cost, underutilized public
properties that are suitable for the development of affordable rental housing,
including mix-used developments.
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(b)
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The corporation shall compile, maintain, and publish on its website an
inventory of the public properties identified pursuant to subsection (a),
including the corresponding tax map keys of the properties identified.
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(c)
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Once a property is listed in the public inventory, the corporation shall
notify eligible developers.
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An eligible
developer may submit a proposal to:
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(1)
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Develop
a rental housing project on the site; or
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(2)
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Develop
and own and operate a rental housing project on the site.
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(d)
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The corporation shall provide assistance to an eligible developer that
requests assistance:
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(1)
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In
navigating the planning and permitting requirements of the State and the county
in which the project site is located to accelerate project development
timelines;
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(2)
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With
regard to legal issues that may arise during the process of construction and
development; and
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(3)
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With
federal assistance and financing program pursuant to section 201H-8(4) and (5).
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(e)
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The corporation shall provide assistance to any county agency that
requests assistance:
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(1)
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With
regard to legal issues that may arise during the construction and development
of a property; and
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(2)
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Pursuant
to section 201H-8(6).
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�201H-C Eligibility
requirements; rental housing projects; developers; contributions.
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(a)
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To
be eligible for financing by the corporation pursuant to section 201H-D, a
rental housing project shall, at minimum, meet the following requirements:
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(1)
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The
project site shall be viable for residential use and housing;
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(2)
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Housing
developed shall be available to middle-income households;
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(3)
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The
eligible developer shall own and control mortgageable interest in the property;
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(4)
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The
eligible developer shall submit a study to the corporation in accordance with
rules adopted by the corporation, detailing:
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(A)
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Present
and future need and demand for rental housing for middle-income households in
the target community;
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(B)
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A
clear business case for the rental housing project, including demonstrated
ability to maintain rent thresholds for middle-income households over time; and
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(C)
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A
description demonstrating that the rental housing project will be sustainable
without operating subsidies or additional capital grants from the corporation
for capital repairs or replacements; and
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(5)
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The
eligible developer shall contribute in equity to the rental housing project one
or more of the following:
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(A)
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Low-cost
financing;
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(B)
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Capital
funding;
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(C)
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Land
contributions;
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(D)
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Fundraising
or donor contributions;
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(E)
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Cash
and other equity contributions; and
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(F)
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County
funding, development bonuses, or concessions for the project site that improve
the viability of the rental housing project.
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(b)
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The corporation may apply additional requirements or prioritize a rental
housing project based on available equity contributions, financing, and other
factors, including:
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(1)
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Greater
need, demand, or community impact;
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(2)
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County
and community support;
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(3)
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Large
partner equity contributions; and
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(4)
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Geographic location.
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(c)
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An eligible developer that qualifies for a loan or grant under section
201H-D shall guarantee that the rental housing project shall:
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(1)
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Be
self-sustaining without the need for subsidies or ongoing operating funding
from the corporation; and
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(2)
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Meet
other minimum requirements that the corporation may adopt by rule;
provided
that an eligible developer may provide funding from the eligible developer's
own resources or other funding sources; provided further that the corporation
may approve the stacking of other financing and funding programs.
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�201H-D
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Affordable rental supply revolving fund; construction loans; interim
financing; requirements; permitted uses.
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(a)
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There is established an
affordable rental supply revolving fund to be administered by the corporation.
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(b)
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The
following shall be deposited into the fund:
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(1)
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Appropriations
made by the legislature;
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(2)
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Private
contributions;
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(3)
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Repayment
of loans, interest, and other returns, including the sale of a federally
insured or guaranteed loan to the Federal Financing Bank; and
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(4)
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Moneys
from other sources.
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(c)
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The fund shall provide interim financing for the construction and
development of rental housing, including new construction, acquisition, and
development.
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The corporation may approve
financing up to one hundred per cent of the costs necessary to develop and complete
the rental housing project.
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An eligible
developer that receives interim financing pursuant to this section shall repay
the loan within five years from the date that the rental housing project
transitions to permanent financing.
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(d)
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Permitted uses of the fund may also include:
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(1)
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A
capital grant of not more than
$ for the
department of Hawaiian home lands, an eligible developer controlled by Native
Hawaiians, and public housing corporations and co-operatives; provided that an
eligible developer awarded a grant pursuant to this paragraph shall:
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(A)
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Prioritize
housing for middle-income households for a minimum of
years; and
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(B)
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Offer
a minimum of per cent of units rented at
per cent market rate for a minimum of
years;
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provided further that the department
of Hawaiian home lands shall be exempt from the requirements of subparagraphs
(A) and (B);
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(2)
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A
short-term loan for a general excise tax advance; provided that the corporation
shall only offer the loan to an eligible developer approved for interim
financing pursuant to subsection (c);
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(3)
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Project
development funding activities, including but not limited to feasibility studies,
design drawings and specifications, cost estimates, survey fees, acquisition
and servicing, and demolition costs;
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(4)
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County
fees, including rezoning, building permits, development permits, utility
permits, development cost charges, and utility charges;
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(5)
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Appraisal
fees;
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(6)
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Professional
fees; and
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(7)
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Other
housing development services or activities that the corporation may authorize
in accordance with rules adopted pursuant to chapter 91.
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(e)
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A loan issued under this section shall:
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(1)
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Comply
with applicable federal and state laws;
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(2)
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Be
federally insured or guaranteed; and
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(3)
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Meet
other requirements in accordance with rules adopted by the corporation pursuant
to chapter 91, including restrictions on the maturities, interest rates, and
other requirements.
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�201H-E
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Affordable homeownership program.
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The corporation shall provide an
equity-participating second mortgage to eligible homebuyers towards the down
payment of a home in a development designated by the corporation.
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The corporation shall not lend the amount of
the second mortgage in the form of cash to an eligible homebuyer but shall
instead hold the amount of the second mortgage.
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�201H-F Eligible homebuyers;
requirements.
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(a)
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An eligible homebuyer seeking a second
mortgage pursuant to section 201H-E, at the time of application, shall:
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(1)
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Be
a citizen or permanent resident of the State;
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(2)
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Have
resided in the State for at least years;
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(3)
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Not
own property in the State or any jurisdiction outside of the State;
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(4)
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Be
living in rental housing or other non-ownership housing; and
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(5)
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Have
a gross household income that does not exceed:
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(A)
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per cent of the area median income for families with children as determined by
the United States Department of Housing and Urban Development; and
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(B)
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per cent of the area median income for families without children as determined
by the United States Department of Housing and Urban Development.
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(b)
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An eligible homebuyer shall:
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(1)
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Secure
primary mortgage financing from a private sector lender approved by the
corporation; and
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(2)
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Provide
a down payment of at least per cent of the
property value.
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�201H-G Affordable
homeownership assistance revolving fund; requirements.
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(a)
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There is established an
affordable homeownership assistance revolving fund to be administered by the
corporation.
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(b)
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The
following shall be deposited into the fund:
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(1)
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Appropriations made by the legislature;
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(2)
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Private
contributions;
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(3)
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Repayment
of a second mortgage, interest, other returns; and
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(4)
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Moneys
from any other sources.
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(c)
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The fund shall provide second mortgages for eligible homebuyers.
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The corporation may approve a second mortgage
amount of up to per cent of the value of the
home.
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A homeowner who receives a second
mortgage from the corporation shall repay the amount of the second mortgage,
plus a proportionate share of any increase in value of the home, upon the sale
of the home.
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A decline in market value
shall proportionately reduce the amount repayable.
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(d)
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The second mortgage shall be:
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(1)
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Interest-
and payment-free for years or until the home is
sold, whichever occurs first; and
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(2)
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Registered
on the title to secure the value that is achieved through all partner
contributions, including county, state, and federal housing assistance,
vouchers, and waivers.
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(e)
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An eligible homebuyer who receives a second mortgage through the
affordable homeownership program shall:
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(1)
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Maintain
the home as their primary residence for at least
years; and
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(2)
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Not
rent the home to any tenants for at least years
from the date of purchase.
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(f)
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A homeowner who receives a second mortgage from the corporation shall
repay the amount of the second mortgage before the expiration of its term or
the sale of the home if:
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(1)
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The
homeowner defaults on their primary mortgage;
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(2)
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Rents
the home during the homeowner's first years of
ownership;
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(3)
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Otherwise
defaults on any loan or mortgage issued pursuant to the affordable
homeownership program; or
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(4)
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The
-year mortgage term expires.
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�201H-H Rules.
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The corporation shall adopt rules
pursuant to chapter 91 to carry out the purposes of this part."
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SECTION
2
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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 affordable rental supply revolving fund.
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SECTION
3
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There is appropriated out of the
affordable rental supply revolving fund the sum of $
or so much thereof as may be necessary for fiscal year 2026-2027 for the
development of eligible, affordable rental housing projects in the State.
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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
4
.
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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 affordable homeownership assistance revolving fund.
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SECTION
5
.
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There is appropriated out of the affordable
homeownership assistance revolving fund the sum of $
or so much thereof as may be necessary for fiscal year 2026-2027 for the financing
of second mortgages for eligible homebuyers.
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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.
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In codifying the new sections added by section 1 of this Act, the
revisor of statutes shall substitute appropriate section numbers for the
letters used in designating the new sections in this Act.
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SECTION 7.
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This Act shall take effect on July 1, 2026.
INTRODUCED BY:
_____________________________
Report Title:
HHFDC; Affordable
Rental Supply Revolving Fund; Affordable Homeownership Assistance Revolving
Fund; Public Property Inventory; Public Housing Corporations; Developers;
Rental Housing; Affordable Homeownership; Second Mortgages; Homebuyers;
Appropriations
Description:
Requires
the Hawaii Housing Finance and Development Corporation to compile, maintain,
and publish on its website a public inventory of underutilized public
properties suitable for affordable rental housing development.
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Requires the HHFDC to provide legal and
administrative assistance to requesting county agencies and eligible developers
to accelerate the development of affordable rental housing projects.
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Establishes eligibility requirements for
developers and rental housing projects seeking interim financing from the
HHFDC.
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Establishes the Affordable Rental
Supply Revolving Fund to be administered by the HHFDC to provide interim
financing for eligible developers of approved rental housing projects.
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Establishes the Affordable Homeownership
Program within the HHFDC to provide second mortgages to homebuyers under
certain conditions.
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Establishes
eligibility requirements for a homebuyer seeking a second mortgage from the
HHFDC.
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Establishes the Affordable
Homeownership Assistance Revolving Fund to be administered by the HHFDC.
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Appropriates funds.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.