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THE SENATE |
S.C.R. NO. |
174 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
S.D. 1 |
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STATE OF HAWAII |
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SENATE CONCURRENT
RESOLUTION
requesting federal programs Fannie Mae and Freddie Mac to allow special reconsideration for a pricing and policies exception to the Hawaii real estate market and for first-time homebuyers with regard to loans delivered on Hawaii condominiums.
WHEREAS, due to the high cost of real estate in Hawaii, the majority of first-time homebuyers are limited to purchasing homes in condominium projects; and
WHEREAS, when financing condominiums, lenders who sell mortgages to Fannie Mae and Freddie Mac –- federal government-sponsored enterprises chartered by Congress with a mission to provide liquidity and stability to the United States housing and mortgage markets -- have been forced to conform to high price adjustment schedules, such as adding a 75 basis point delivery fee to all condominium loans, and a more inclusive hazard insurance requirement such as "walls in" coverage at no less than 20 per cent of the condominium's appraised value, which have been developed based on national data and circumstances; and
WHEREAS, Hawaii's condominium projects have a higher than average ratio of non-owner occupied units as the result of high rental demand that affects the levels of homeownership, and private mortgage insurance policies have presale requirements on condominium projects that have increased the owner-occupancy percentage from 51 per cent to 70 per cent, which makes it almost impossible to approve a condominium; and
WHEREAS, the ability of lenders to quickly approve new projects has been hindered because of new policies, such as the elimination of the limited project review or streamline review for new projects and the type of litigation that is permissible for a project review approval; and
WHEREAS, in Hawaii, this results in fewer condominiums qualifying as "conforming" properties as defined by the secondary mortgage market, and since conforming properties qualify for the lowest mortgage rates available, the effect is a reduction of the number of homes that Hawaii borrowers can purchase; and
WHEREAS, Hawaii's critical affordable housing shortage requires removal of any discriminatory barriers to mortgages so that purchasers are able to qualify and obtain mortgages that do not threaten them with future foreclosure; and
WHEREAS, Hawaii has enacted condominium association regulations to ensure that projects have adequate financial reserves to properly maintain their premises; now, therefore,
BE IT RESOLVED by the Senate of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2009, the House of Representatives concurring, that federal programs Fannie Mae and Freddie Mac are requested to allow special reconsideration for a pricing and policies exception to the Hawaii real estate market and for first-time homebuyers with regard to loans delivered on Hawaii condominiums; and
BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President and Chief Executive Officer of Fannie Mae; Interim Chief Executive Officer of Freddie Mac; Secretary of the United States Department of Commerce, Housing and Urban Development; United States Senator Daniel K. Inouye; United States Senator Daniel K. Akaka; United States Representative Neil Abercrombie; United States Representative Mazie Hirono; and the Governor of Hawaii.
Fannie Mae and Freddie Mac; Hawaii Exemption; Condo Purchases