STAND. COM. REP. NO. 141

Honolulu, Hawaii

RE: S.B. No. 572

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Housing, to which was referred S.B. No. 572 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Add loan funds administered by Nonprofit Community Development Financial Institutions (CDFIs) for certain for-sale affordable housing projects to the list of loan priorities for the Affordable Homeownership Revolving Fund (AHRF); and

(2) Expand use of funds in the AHRF to allow financing as matching funds for CDFIs to mobilize other funding sources.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation, Hawaii Habitat for Humanity Association, and Hawaiʻi Community Lending.

Your Committee finds that Act 227, Session Laws of Hawaii 2021, established the AHRF to offer loans to nonprofit CDFIs and nonprofit housing development organizations that develop affordable homeownership housing projects. With expanded access to additional capital from federal, private, and philanthropic sources, for-sale projects funded with AHRF funds can achieve faster fund recapture through loan repayments, ensuring AHRF sustainability and longevity. Therefore, this measure mobilizes funding for homeownership projects that will increase the State's limited housing inventory.

Your Committee notes the testimony provided by the Hawaii Housing Finance and Development Corporation (HHFDC) at the public hearing on this measure. According to HHFDC, the AHRF received an initial appropriation of $5 million. Presently, one project has received committed funding from the AHRF of approximately $1.8 million for four units. The proposed loan terms for this project are structured as a construction loan to assist with the development on a draw down basis, with a ten-year term, to be repaid at one percent interest.

As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 572 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Housing,

________________________________

STANLEY CHANG, Chair