THE SENATE	S.C.R. NO.	174
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 1
STATE OF HAWAII		Proposed

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, higher insurance requirements, and exclusionary private mortgage insurance policies such as the requirement of unattainable owner-occupancy percentages of seventy per cent, which have been developed based on national data and circumstances; and

     WHEREAS, in Hawaii this results in more restrictive underwriting standards and higher borrowing costs, which low and moderate income borrowers cannot qualify for, nor afford, due to the higher cost of living, especially for housing; and

     WHEREAS, these policies were created as a result of experiences in other market areas across the country, and have a disproportionate and unfair impact on first-time Hawaii homebuyers with moderate incomes and a limited affordable housing market segment; and

     WHEREAS, Hawaii has enacted condominium association regulations to ensure that projects have adequate financial reserves to properly maintain their premises; and

     WHEREAS, Hawaii's condominium projects have a higher than average ratio of non-owner occupied units as the result of high rental demand, which is in turn, due to lower levels of homeownership; 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; 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.

Report Title:

Fannie Mae and Freddie Mac; Hawaii Exemption; Condo Purchases