HOUSE OF REPRESENTATIVES

H.B. NO.

1724

THIRTY-THIRD LEGISLATURE, 2026

 

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

     "§201H-     Dwelling unit revolving fund equity program.  (a)  There is established a dwelling unit revolving fund equity program, which shall be funded by the dwelling unit revolving fund and administered by the corporation, to address the high, unmet demand of for-sale units by state residents.

     (b)  The corporation may purchase equity in for-sale housing development projects secured by a recorded instrument as determined by the corporation; provided that:

     (1)  The equity shall be allocated to specific units within the housing development project; and

     (2)  The contribution from each eligible buyer of a unit shall be reduced by the corporation's equity amount for that unit.

     (c)  An eligible buyer of a unit shall be a qualified resident as defined in section 201H-32.

     (d)  The corporation may establish criteria for the prioritization of eligible buyers.

     (e)  If a buyer sells the buyer's unit within thirty years of the date of the buyer's purchase of the unit, then at the time of the sale, the buyer shall repay to the corporation:

     (1)  The corporation's purchased equity; and

     (2)  The corporation's equity percentage share, if any.

     (f)  If the buyer does not sell the buyer's unit within thirty years from the date the buyer purchased the unit, then upon the earliest of the following, the buyer shall repay to the corporation the corporation's equity and equity percentage share, if any:

     (1)  When the buyer refinances the unit;

     (2)  When the buyer obtains additional financing secured by the unit;

     (3)  When the buyer transfers the title to the unit;

     (4)  When the buyer ceases owner-occupancy of the unit or rents the unit or any part of the unit; or

     (5)  At any time before the expiration of the thirty-year period.

     (g)  The repayment obligation described in subsections (e) and (f) shall run with the deed or lease initially conveyed for each unit until the obligation to repay the equity and equity percentage share, if any, has been satisfied.

     (h)  The corporation shall adopt rules pursuant to chapter 91 to implement this section.

     (i)  As used in this section, unless the context otherwise requires:

     "Housing development project" means a plan, design, or undertaking by the corporation or an eligible developer for the development of units.  "Housing development project" includes all real and personal property, buildings and improvements, commercial space, lands for farming and gardening, community facilities acquired or constructed or to be acquired or constructed, and all tangible or intangible assets held or used in connection with the housing development project.

     "Unit" means:

     (1)  The structure and land upon which the structure is constructed, whether in fee simple or leasehold, developed for residential purposes pursuant to this chapter; or

     (2)  Improved or unimproved real property that is developed for residential purposes pursuant to this chapter.

"Unit" includes dwelling units."

     SECTION 2.  Section 201H-191, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is created a dwelling unit revolving fund.  The funds appropriated for the purpose of the dwelling unit revolving fund and all moneys received or collected by the corporation for the purpose of the revolving fund shall be deposited [in] into the revolving fund.  The proceeds in the revolving fund shall be used:

     (1)  To reimburse the general fund to pay the interest on general obligation bonds issued for the purposes of the revolving fund;

     (2)  For necessary expenses in administering housing development programs, regional state infrastructure programs, and the government employee housing program pursuant to part V; and

     (3)  To carry out the purposes of housing development programs, regional state infrastructure programs, and the government employee housing program pursuant to part V, including but not limited to the expansion of community facilities and regional state infrastructure constructed in conjunction with housing and mixed-use transit-oriented development projects, purchasing equity in for-sale housing development projects, interim primary or secondary financing, permanent primary or secondary financing, [and] supplementing building costs, federal guarantees required for operational losses, and all things required by any federal agency in the construction and receipt of federal funds or low-income housing tax credits for housing projects."

     SECTION 3.  Act 92, Session Laws of Hawaii 2023, is amended as follows:

     1.  By amending section 2 to read:

     "SECTION 2.  [(a)  The Hawaii housing finance and development corporation may establish a five-year dwelling unit revolving fund equity pilot program, which shall be funded by the dwelling unit revolving fund, to address the high, unmet demand of for-sale units by Hawaii residents, specifically residents who:

     (1)  Own no other real property;

     (2)  Receive no gift funds; and

     (3)  Work in a profession that is facing a shortage as defined by the corporation, including health care workers, educators, law enforcement officers, including staff at correctional facilities, or agricultural field workers.

     (b)  The Hawaii housing finance and development corporation may purchase equity in for-sale housing development projects; provided that this equity shall be allocated to specific units within the housing development projects and the price to be paid by each eligible buyer of a unit shall be reduced by the Hawaii housing finance and development corporation's equity amount for that unit.

     (c)  If a buyer sells the buyer's unit within thirty years of the date of the buyer's purchase of the unit, then at the time of the sale, the buyer shall repay to the Hawaii housing finance and development corporation the corporation's appreciated equity value; provided that if the buyer does not sell the unit within thirty years of the date of the buyer's purchase of the unit, then the buyer shall repay to the Hawaii housing finance and development corporation the corporation's appreciated equity value prior to the expiration of the thirty‑year period; provided further that this requirement shall run with the deed for each unit until the obligation to repay the appreciated equity value has been satisfied.

     (d)  The Hawaii housing finance and development corporation may establish rules pursuant to chapter 91, Hawaii Revised Statutes, to implement this section, including rules that establish the methods by which appreciated equity values shall be calculated, assessed, and satisfied.

     (e)  The Hawaii housing finance and development corporation may establish criteria for the prioritization of eligible buyers based on state goals and policies and submit a report on this criteria to the legislature no later than twenty days prior to the convening of the regular session of 2024.

     (f)  The Hawaii housing finance and development corporation shall submit interim reports on the dwelling unit revolving fund equity pilot program to the legislature no later than twenty days prior to the convening of the regular sessions of 2024, 2025, 2026, and 2027.  The Hawaii housing finance and development corporation shall submit a final report on the dwelling unit revolving fund equity pilot program to the legislature no later than twenty days prior to the convening of the regular session of 2028.

     (g)  As used in this section:

     "Housing development project" means a plan, design, or undertaking by the Hawaii housing finance and development corporation or an eligible developer for the development of units.  "Housing development project" includes all real and personal property, buildings and improvements, commercial space, lands for farming and gardening, community facilities acquired or constructed or to be acquired or constructed, and all tangible or intangible assets held or used in connection with the housing development project.

     "Unit" means:

     (1)  The structure and land upon which the structure is constructed, whether on fee simple or leasehold property, developed for residential purposes pursuant to chapter 201H, Hawaii Revised Statutes; or

     (2)  Improved or unimproved real property that is developed for residential purposes pursuant to chapter 201H, Hawaii Revised Statutes.

"Unit" includes dwelling units.]  Repealed."

     2.  By amending section 5 to read:

     "SECTION 5.  This Act shall take effect on July 1, 2023[, and shall be repealed on June 30, 2028; provided that:

     (1)  Section 201H-47, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act; and

     (2)  The requirements imposed pursuant to section 2(c) of this Act shall remain in effect and run with the deed after June 30, 2028]."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2026.

 

INTRODUCED BY:

_____________________________

 

 

 

 

Report Title:

HHFDC; Dwelling Unit Revolving Fund Equity Program; Computation of Interest; Dwelling Unit Revolving Fund

 

Description:

Makes the Dwelling Unit Revolving Fund Equity Pilot Program permanent, with modifications that include changing the computation of interest that a purchaser of certain real property is required to pay to the Hawaii Housing Finance Development Corporation upon the purchaser's sale or assignment of the real property after a specified period of time.  Expands the use of proceeds in the Dwelling Unit Revolving Fund to include purchasing equity in for-sale housing development projects and interim primary or secondary financing. 

 

 

 

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