HOUSE OF REPRESENTATIVES

H.B. NO.

2066

THIRTIETH LEGISLATURE, 2020

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to the hawaii housing finance and development corporation.

 

 

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

 


     SECTION 1.  The legislature finds that making a downpayment can be a major hurdle for many residents in the State when purchasing a home for the first time.  The hurdle is particularly high for potential home buyers who fall into a gap income group because their earnings are too high to qualify for financial assistance from governmental programs but too low for financial institutions to regard them as safe risks for mortgage loans.

     The purpose of this Act is to create a downpayment guarantee program for first-time homebuyers who fall into a gap income group.

     SECTION 2.  Chapter 201H, Hawaii Revised Statutes, is amended by adding a new subpart to part III to be appropriately designated and to read as follows:

"   .  Downpayment Guarantee Program

     §201H-     Downpayment guarantee.  (a)  The corporation may serve as guarantor for any downpayment loan made by a financial institution that is chartered under chapter 412 to an eligible borrower for the borrower's purchase of a residential dwelling within the State to be occupied by the borrower.

     (b)  No person shall be deemed an eligible borrower unless the person:

     (1)  Is a citizen of the United States or a resident alien;

     (2)  Is at least eighteen years of age;

     (3)  Is a bona fide resident of the State;

     (4)  Will physically reside, for the term of the loan, in the residential property to be purchased;

     (5)  Is accepted by a mortgage lender as a person to whom the lender is willing to lend money for the purchase of the residential property, provided the required downpayment is made;

     (6)  Provides at least five per cent of the sales price as a portion of the downpayment;

     (7)  Has successfully completed a financial education program provided by a financial education agency approved by the corporation;

     (8)  Is a first-time home buyer within the State; and

     (9)  Falls into a gap income group as recognized by the corporation.

     (c)  No person who owns in fee simple or in leasehold any other residential property within the State shall be eligible under subsection (b).  A person shall be deemed to own a residential property within the State if the person, the person's spouse, or both (unless separated and living apart under a decree of a court of competent jurisdiction) owns a majority interest in a residential property within the State.

     (d)  Every loan that is secured by the corporation under this section shall be subject to the following conditions:

     (1)  The borrower shall expend no portion of the borrower's downpayment loan for purposes other than to make a downpayment for the purchase of a residential property; and

     (2)  The borrower shall agree to staggered buy back sale requirements established by the corporation for owner-occupants.

     (e)  The corporation may use funds in the dwelling unit revolving fund established in section 201H-191 to guarantee the repayment of a downpayment loan made to the eligible borrower by a financial institution chartered under chapter 412.

     (f)  The corporation may also establish, revise, charge, and collect fees, premiums, and charges as necessary, reasonable, or convenient, to guarantee the repayment of a downpayment loan.  The fees, premiums, and charges shall be deposited into the dwelling unit revolving fund established in section 201H-191.

     (g)  If the borrower defaults in the payment of any installment of principal or interest of the downpayment loan, the corporation shall take all necessary action to repay the delinquent amounts to the financial institution or its assigns, as the case may be, that holds title to the downpayment loan.

     (h)  The powers conferred upon the corporation by this section shall be in addition and supplemental to the powers conferred by any other law, and nothing in this section shall be construed as limiting any powers, rights, privileges, or immunities so conferred."

     SECTION 3.  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 2020-2021 to be deposited into the dwelling unit revolving fund and expended for the purposes of this Act.

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

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2020.

 

INTRODUCED BY:

_____________________________

 

 



 

Report Title:

Hawaii Housing Finance and Development Corporation; Homebuyer Downpayment Guarantee Program; Appropriation

 

Description:

Creates a downpayment guarantee program for certain first-time homebuyers.  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.