THE SENATE

S.B. NO.

2660

THIRTIETH LEGISLATURE, 2020

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to housing.

 

 

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

 


SECTION 1. The legislature finds that homeownership is positively correlated with economic and social stability in low- and moderate-income households. However, in the last fifty years, the number of full time Hawaii residents who own homes has steadily declined. Currently, Hawaii has the third lowest homeownership rate of any state in the nation. The department of business, economic development, and tourism projects that Hawaii will need approximately thirty-four thousand new housing units by 2025 to address the critical shortage of housing. Action is needed to increase the availability of owner-occupied housing to meet demand.

The legislature further finds that the self-help housing model is a cost-effective means of assisting low-income families who would otherwise not have a homeownership opportunity. Self-help housing, nonprofit developers, and community land trust organizations leverage federal funds from the United States Department of Housing and Urban Development and the United States Department of Agriculture's Rural Development program with low-income families' own contributions of labor to build their own communities. However, an additional non-federal matching funding source is needed.

The legislature further finds that nonprofit community development financial institutions are intermediaries that provide financing and technical assistance to assist nonprofit housing organizations in the development of affordable homeownership units in underserved communities. As private sector organizations, community development financial institutions establish and maintain revolving loan funds to attract capital from the United States Department of the Treasury and other public and private sources of capital in order to increase the collective impact of affordable housing development by nonprofit housing organizations. According to Opportunity Finance Network, community development financial institutions leverage federal funding for affordable housing and community development activities at a ratio of eight-to-one. Additional funding will help community development financial institutions attract private and public capital for affordable housing development.

The legislature further finds that qualified nonprofit housing trusts provide access to low-cost land that in turn reduces home sales prices and ensures affordability in perpetuity through equity sharing between the nonprofit and the homeowner at time of resale.

The purpose of this Act is to establish an affordable homeownership housing revolving fund to provide funds for the development of affordable for sale housing projects by nonprofit community development financial institutions, nonprofit housing development organizations, and qualified nonprofit housing trust programs to facilitate greater homeownership opportunities for Hawaii residents.

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

"201H-   Affordable homeownership revolving fund. (a) There is established an affordable homeownership revolving fund to be administered by the corporation for the purpose of providing, in whole or in part, loans to nonprofit community development financial institutions, qualified nonprofit housing trusts, and nonprofit housing development organizations for the development of affordable homeownership housing projects. Loans shall be awarded to projects or units in projects that are funded by programs in the following order of priority:

(1) United States Department of Housing and Urban Development;

(2) United States Department of Agriculture Rural Development; and

(3) United States Department of the Treasury community development financial institutions fund, wherein:

All projects must meet the following requirements:

(A) At least fifty per cent of the available units are reserved for persons and families with incomes at or below eighty per cent of the median family income and of which at least five per cent of the available units are for persons and families with incomes at or below fifty per cent of the median family income;

(B) The remaining units are reserved for persons and families with incomes at or below one hundred twenty per cent of the median family income; and

(C) Mixed-income affordable for sale housing projects or units in a mixed-income affordable for sale housing project wherein all the available units are reserved for persons and families with incomes at or below one hundred per cent of the median family income.

(b) Moneys in the fund shall be used to provide loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of affordable for sale housing units and qualified nonprofit housing trust programs. Uses of moneys in the fund may include but are not limited to planning, design, land acquisition, including the costs of options, agreements of sale, and down payments, capacity building of nonprofit housing developers and land trusts, equity financing as matching funds for nonprofit community development financial institutions or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide that money from the fund shall be leveraged with other financial resources to the extent possible.

(c) The fund may include sums appropriated by the legislature, private contributions, repayment of loans, interest, other returns, and moneys from other sources.

(d) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the fund; provided that moneys in the fund shall not be used to finance day-to-day administrative expenses of the projects allotted moneys from the fund.

(e) The corporation may provide loans under this section as provided in rules adopted by the corporation pursuant to chapter 91.

(f) The corporation shall submit a report to the legislature no later than twenty days prior to the convening of each regular session describing the projects funded."

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 affordable homeownership revolving fund established under section 201H-   , Hawaii Revised Statutes.

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

SECTION 4. There is appropriated out of the affordable homeownership revolving fund the sum of $         or so much as may be necessary for fiscal year 2020-2021 for loans to nonprofit community development financial institutions, qualified nonprofit housing trusts or nonprofit organizations operating programs for the development of affordable for sale housing projects.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on January 1, 2021.

 

INTRODUCED BY:

_____________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

Report Title:

Housing; Affordable Homeownership Revolving Fund; Appropriations

 

Description:

Establishes an Affordable Homeownership Revolving Fund within the Hawaii Housing Finance and Development Corporation to provide loans to nonprofit housing development organizations, community development financial institutions and qualified nonprofit housing trusts for the development of affordable homeownership housing projects. Makes an appropriation into and out of the Affordable Homeownership Revolving Fund. Effective 1/1/2021.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.