HB1337.DOC

SECTION 1. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to part III, subpart B to be appropriately designated and to read as follows:

"§201H- University of Hawaii housing downpayment loan program. (a) The corporation shall establish within the Hua Mae single family program established by administrative rules pursuant to this part a program to make direct downpayment loans for the purchase of residential property to eligible borrowers who are faculty members of the University of Hawaii. The downpayment loan to any one borrower shall not exceed per cent of the purchase price of the residential property or $ , whichever is less. The interest rate on a loan shall be per cent; provided that there shall also be a contingent interest of per cent of the appreciated value of the property upon the buyer's sale, transfer, or refinancing of the property.

(b) The repayment of every downpayment loan shall be secured by a lien on the property that shall disclose the contingent interest stated in subsection (a) in a shared appreciation clause.

(c) The principal of the downpayment loan, together with accrued interest, shall be due and payable upon the sale, transfer, or refinancing of the property, or shall be repaid by the borrower in installments as determined by the corporation; provided that the corporation may provide a period in which payments may be waived. The period over which the principal and interest shall be paid need not coincide with the period over which the loan from the mortgage lender for the balance of the purchase price must be repaid. The borrower may repay the whole or any part of the unpaid balance of the downpayment loan, plus accrued interest, at any time without penalty; provided that the contingent interest stated in subsection (a) shall be due and payable upon the buyer's sale, transfer, or refinancing of the property.

(d) The corporation may secure the services of the mortgage lender who lends to the borrower the balance of the purchase price of the residential property or the services of any other mortgage lender doing business in the State to collect, on behalf of the State, the principal and interest of the downpayment loan and otherwise to service the downpayment loan, for a servicing fee not in excess of the prevailing loan servicing fees.

(e) The corporation shall adopt rules pursuant to chapter 91 to carry out the purposes of this section."

SECTION 2. Section 201H-80, Hawaii Revised Statutes, is amended to read as follows:

"§201H-80 Housing finance revolving fund; bond revolving funds. (a) There is created a housing finance revolving fund to be administered by the corporation. Notwithstanding sections 36-21 and 201H-191, the proceeds in the fund shall be used for long-term and other special financings of the corporation and for the necessary expenses in administering this part.

(b) All moneys received and collected by the corporation, not otherwise pledged or obligated nor required by law to be placed in any other special or revolving fund[,] or the subaccount established in subsection (e), shall be deposited in the housing finance revolving fund.

(c) [A] Except as provided in subsection (e), a separate revolving fund shall be established for each housing project or system of housing projects or loan program financed from the proceeds of bonds secured under the same trust indenture. Each fund shall be designated "housing project bond revolving fund" or "housing loan program revenue bond revolving fund", as appropriate, and shall bear any additional designation as the corporation deems appropriate to properly identify the fund.

(d) Notwithstanding any other law to the contrary, except as provided by subsection (e), all revenues, income, and receipts derived from a housing project or system of projects or loan program financed from the proceeds of bonds or pledged to the payment of the principal of and interest and premium on bonds, shall be paid into the housing project bond revolving fund or housing loan program revenue bond revolving fund established for the housing project or system of projects or loan program and applied as provided in the proceedings authorizing the issuance of the bonds.

(e) A separate subaccount of the housing finance revolving fund, to be known as the University of Hawaii housing downpayment loan program subaccount, shall be established. All moneys in the subaccount shall be used exclusively for the purposes of the University of Hawaii housing downpayment loan program established pursuant to section 201H- . The subaccount shall consist of the following sources of revenue:

(1) Revenues, income, and receipts derived from the University of Hawaii downpayment loan program;

(2) Appropriations from the legislature;

(3) Federal grants and subsidies to the State;

(4) Private investments; and

(5) Voluntary contributions."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2017.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1337
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII