HB1816

PART I

SECTION 1. The legislature finds that certain published research indicates that Hawaii residents have among the highest per capita debt in the United States. According to a study conducted by the online lending company LendingTree, Hawaii residents rank eighth in the country when it comes to per capita debt, at $40,700. High debt is largely attributed to credit card debt, with ninety per cent of Hawaii residents having credit cards and an average balance of $4,489, and has an impact on a resident's ability to qualify for home loans or to have the necessary down payment for home purchasing.

The legislature further finds that one strategy to improve the potential for more Hawaii residents to become homeowners is a mix of financial aid and financial education for low-income families. This strategy can include education on debt reduction and credit score improvement and financial aid to assist in making down payments for a home. Such strategies can help lead low-income families to achieving the purchase of their own home.

The purpose of this part is to require the Hawaii housing finance and development corporation to implement the homebuyers' club program and provide financial aid to the program's participants.

SECTION 2. Section 201H-171, Hawaii Revised Statutes, is amended to read as follows:

"§201H-171 Homebuyers' club program. (a) The corporation may establish a homebuyers' club program for participants who [~~are desirous of purchasing~~] desire to purchase a home and who have adequate incomes but who lack sufficient funds for the downpayment and closing costs. The primary focus of this program is to facilitate the purchase of homes by providing participants with financial aid and strategies to save money, to resolve credit problems, and to educate participants on how to shop for and purchase a home.

(b) The corporation shall provide financial aid to participants using loans or other means of financial aid to pay for down payments and other costs associated with the purchase of a home; provided that a homeownership education program approved by the corporation must be completed before any financial aid is administered by the corporation to a participant; provided further that upon purchasing a home, the participant shall report to a designated agent of the corporation to ensure timely payments for loans made under this section.

[~~(b)~~] (c) In establishing such a program, the corporation shall adopt rules pursuant to chapter 91 relating to establishing a savings program for participants based upon individual analyses of income and family expenses. The rules may also provide for integration of the homebuyers' club program with other governmental programs including but not limited to individual housing accounts under section 235-5.5, the state mortgage guarantee program under subpart E, the downpayment loan assistance program established under subpart F, and the rent-to-own program established under subpart H.

[~~(c)~~] (d) The corporation may secure the services of another public or private entity to carry out the purposes of this section."

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 for the homebuyers' club program.

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

PART II

SECTION 4. The legislature finds that many individuals and families who have received financial assistance to exit homelessness or prevent themselves from becoming homeless often have difficulty maintaining self-sufficiency for more than one to two years. Homeless service agencies often provide case management support for a short-term period following the provision of financial rental assistance. However, short-term case management is often not enough, and a longer term of follow up and availability of case management, including counseling and financial education, for low-income renters will help to secure long-term housing and reduce recidivism.

The legislature further finds that homeless service providers see households return to homelessness or fall into arrears with rent and utilities within one to two years after assistance is provided. Long term case management support for all types of households who have received homeless prevention services, including housing first, transitional shelters, rapid rehousing, and housing placement programs, provides clients with the guidance and motivation to maintain housing wellness. Each household may require different levels of case management, which may be determined by a holistic assessment.

Accordingly, the purpose of this part is to require and appropriate funds for the department of human services to offer long-term case management for low-income individuals and families and individuals and families that are formerly homeless or currently at-risk for homelessness and accept financial aid offered by the department of human services for rent.

SECTION 5. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346- Long-term case management; housing stability. (a) To ensure that individuals and families maintain self sufficiency and stable housing in the long term, the department shall offer long-term case management services to low-income individuals and families and individuals and families that are formerly homeless or currently at-risk for homelessness and accept financial aid offered by the department, including rental assistance, for the payment of rent.

(b) In providing long-term case management services, the department shall include financial counseling and education as part of the case management services.

(c) The department may adopt rules, pursuant to chapter 91, necessary for the purposes of this section, including for the establishment of eligibility requirements and applicant qualifications."

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2020-2021 to provide long-term case management services as required by this part.

The sum appropriated shall be expended by the department of human services for the purposes of this part.

PART III

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval; provided that sections 3 and 6 shall take effect on July 1, 2020.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1816
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII