Downpayment loans
HRS §201H-161
in effect201H-161. Downpayment loans
(a) The corporation may make downpayment loans, either directly or through a nonprofit organization as defined in section 454F-1, to eligible borrowers who qualify for loans under section 201H-162. The downpayment loan to any one borrower shall not exceed fifteen per cent of the purchase price or appraised value of the residential property or $60,000, whichever is less. In no event shall the loan amount and purchase money mortgage amount exceed one hundred per cent of combined loan-to-value. The interest rate on the loans may range from one per cent to eight per cent, depending on the buyer's income.
(b) The repayment of every downpayment loan
shall be secured by a duly recorded second mortgage executed by the borrower to
the State on the residential property purchased with the downpayment loan.
(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.
(d) The corporation may secure the services of
nonprofit organizations, as defined in section 454F-1, to originate the
downpayment loans on behalf of the State for an origination fee not in excess
of the prevailing loan origination fee amount, as determined by the
corporation.
(e) The corporation may secure the services of
the mortgage lender who loans 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.
(f) The corporation shall adopt rules pursuant
to chapter 91 to carry out the purposes of this subpart.
[L 2006, c 180, pt of
§4; am L 2017, c 123, §4]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol04_Ch0201-0257/HRS0201H/HRS_0201H-0161.htmFetched: 11/10/2026