Reserved Housing Loan Programs

HRS div. 1, tit. 13, ch. 206E, pt. III

in effect

HRS §206E-101 Definitions

206E-101. Definitions The following words or terms as used in this part shall have the following meanings, unless a different meaning clearly appears from the context: "Authority" means the Hawaii community development authority. "Eligible borrower" means any person or family, irrespective of race, creed, national origin, or sex, who: (1) Has never before obtained a loan under this part; and (2) Meets other qualifications as established by rules adopted by the authority. "Eligible loan" means a loan to an eligible borrower for the purchase of a reserved housing unit; provided that the property financed is located in the community development district, is and will be occupied as the principal place of residence by the eligible borrower, and meets other requirements as established by rules adopted by the authority. "Mortgage lender" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, credit union, insurance company, or any other financial institution, or a holding company for any of the foregoing, which: (1) Is authorized to do business in the State; (2) Customarily provides service or otherwise aids in the financing of mortgages on single family or multi-family residential property; and (3) Is a financial institution whose accounts are federally insured, or is an institution which is an approved mortgagee for the Federal Housing Administration, or is an approved lender for the Department of Veterans Affairs or the United States Department of Agriculture, or is an approved mortgage loan servicer for the Federal National Mortgage Association or the Federal Home Mortgage Corporation. "Reserved housing" means housing designated for residents in the low- or moderate-income ranges who meet such eligibility requirements as the authority may adopt by rule. "Reserved housing loan programs" includes all or any part of the loan to lenders program, the purchase of existing loans program, the advance commitments program, and the eligible loan and eligible project loan funding program authorized under this part. "Revenue bonds" means bonds, notes, or other evidence of indebtedness of the authority issued to finance any of the reserved housing loan programs under this part. "Trustee" means a national or state bank or trust company within or without the State which enters into a trust indenture. "Trust indenture" means an agreement by and between the authority and the trustee, which sets forth the duties of the trustee with respect to the revenue bonds, the security therefor, and other provisions as deemed necessary or convenient by the authority to secure the revenue bonds. [L 1982, c 228, pt of §8; am L 1997, c 258, §12; am L 2017, c 12, §1]

HRS §206E-102 Rules; eligible loans

206E-102. Rules; eligible loans (a) The authority shall establish requirements for reserved housing units financed by an eligible loan, and may consider, but not be limited to the location, age, condition, and other characteristics of the reserved housing units. (b) The authority shall establish restrictions on the terms, maturities, interest rates, collateral, and other requirements for eligible loans. (c) All eligible loans made shall comply with applicable state and federal laws. [L 1982, c 228, pt of §8]

HRS §206E-103 Revenue bonds; authorization

206E-103. Revenue bonds; authorization (a) The authority, with the approval of the governor, may issue from time to time revenue bonds in amounts not exceeding the total amount of bonds authorized by the legislature for the purpose of undertaking and maintaining any of the reserved housing loan programs. (b) All revenue bonds shall be issued pursuant to part III of chapter 39, except as provided in this part. (c) The revenue bonds shall be issued in the name of the authority, and not in the name of the State. The final maturity date of the revenue bonds may be any date not exceeding forty years from the date of issuance. [L 1982, c 228, pt of §8]

HRS §206E-105 Revenue bonds; interest rate, price, and sale

206E-105. Revenue bonds; interest rate, price, and sale (a) The revenue bonds shall bear interest at a rate or rates payable monthly, quarterly, or semi-annually. (b) The authority shall include the costs of undertaking and maintaining the reserved housing loan programs for which the revenue bonds are issued in determining the cost of undertaking and maintaining the reserved housing loan programs, the authority may include the cost of purchasing or funding loans or other agreements entered into for the reserved housing loan programs; the costs of studies and surveys; insurance premiums; underwriting fees; financial consultant, legal, accounting, and marketing services incurred; reserve account, trustee, custodian, and rating agency fees; and interest on the bonds for a period not to exceed one year from the date of issuance. (c) The revenue bonds may be sold at public or private sale, and for a price as may be determined by the authority to be in the best interest of the State. (d) Section 39-65 shall not apply to revenue bonds issued for the purpose of undertaking and maintaining any of the reserved housing loan programs as permitted by this part. The legislature consents to the taxation by the United States of interest on revenue bonds issued for the purpose of undertaking and maintaining any of the reserved housing loan programs as permitted by this part. [L 1982, c 228, pt of §8]

HRS §206E-106 Revenue bonds; investment of proceeds, and redemption

206E-106. Revenue bonds; investment of proceeds, and redemption Subject to any agreement with the holders of its revenue bonds, the authority may: (1) Notwithstanding any other law to the contrary, invest its moneys not required for immediate use, including proceeds from the sale of any revenue bonds, in any investment in accordance with procedures prescribed in a trust indenture; (2) Purchase its revenue bonds out of any fund or money of the authority available therefor, and hold, cancel, or resell the revenue bonds. [L 1982, c 228, pt of §8]

HRS §206E-107 Trustee; designation, duties

206E-107. Trustee; designation, duties (a) The authority shall designate a trustee for each issue of revenue bonds secured under the same trust indenture; provided that the trustee shall be approved by the director of finance. (b) The trustee shall be authorized by the authority to receive and receipt for, hold, and administer the proceeds of the revenue bonds, and to apply the proceeds to the purposes for which the bonds are issued. (c) The trustee shall also be authorized by the authority to hold and administer the reserved housing loan program revenue bond special fund established pursuant to section 206E-109, and to receive and receipt for, hold, and administer the revenues derived by the authority from the benefits of the reserved housing loan program for which the revenue bonds are issued and to apply these revenues to the payment of the cost of administering, operating, and maintaining the reserved housing loan programs, to pay the principal of and interest on these bonds, to the establishment of reserves, and to other purposes as may be authorized in the proceedings providing for the issuance of the revenue bonds. (d) Notwithstanding section 39-68, the director of finance may appoint the trustee to serve as fiscal agent for: (1) The payment of the principal of and interest on the revenue bonds; and (2) The purchase, registration, transfer, exchange, and redemption of the bonds. (e) The trustee shall perform additional functions with respect to the payment, purchase, registration, transfer, exchange, and redemption, as the director of finance may deem necessary, advisable, or expeditious, including the holding of the revenue bonds and coupons which have been paid and the supervision of the destruction thereof in accordance with law. (f) Nothing in this part shall limit or be construed to limit the powers granted to the director of finance in sections 36-3 and 39-13, and the third sentence of section 39-68, to appoint the trustee or others as fiscal agents, paying agents and registrars for the revenue bonds or to authorize and empower those fiscal agents and registrars to perform the functions referred to in those sections. [L 1982, c 228, pt of §8]

HRS §206E-108 Trust indenture

206E-108. Trust indenture (a) A trust indenture may contain covenants and provisions authorized by part III of chapter 39, and as deemed necessary or convenient by the authority for the purposes of this part. (b) A trust indenture may allow the authority to pledge and assign to the trustee loans and other agreements related to the reserved housing loan programs, and the rights of the authority thereunder, including the right to receive revenues thereunder and to enforce the provision thereof. (c) Where a trust indenture provides that any revenue bond issued under that trust indenture is not valid or obligatory for any purpose unless certified or authenticated by the trustee, all signatures of the officers of the State upon the revenue bonds required by section 39-56 may be facsimiles of their signatures. (d) A trust indenture shall also contain provisions as to: (1) The investment of the proceeds of the revenue bonds, the investment of any reserve for the bonds, the investment of the revenues of the reserved housing loan programs, and the use and application of the earnings from investments; and (2) The terms and conditions upon which the holders of the revenue bonds or any portion of them or any trustee thereof may institute proceedings for the foreclosure of any loan or other agreement or any note or other undertaking, obligation or property securing the payment of the bonds and the use and application of the moneys derived from the foreclosure. (e) A trust indenture may also contain provisions deemed necessary or desirable by the authority to obtain or permit, by grant, interest subsidy, or otherwise, the participation of the federal government in the reserved housing loan programs or in the financing of the costs of administering, operating, or maintaining such reserved housing loan programs. [L 1982, c 228, pt of §8]

HRS §206E-112 Reserved housing loan programs; self supporting

206E-112. Reserved housing loan programs; self supporting The interest rate, fees, charges, premiums, and other terms of the loans made under the reserved housing loan programs shall be at least sufficient to pay the cost of administering and maintaining the portion of the specific reserved housing loan programs for which the revenue bonds have been issued, and to assure payment of the principal of and interest on the revenue bonds as they become due. [L 1982, c 228, pt of §8]

HRS §206E-113 Reserved housing loan programs; fees

206E-113. Reserved housing loan programs; fees The authority may establish, revise, charge, and collect fees, premiums, and charges as necessary, reasonable, or convenient, for its reserved housing loan programs. The fees, premiums, and charges shall be deposited into the reserved housing loan program revenue bond special fund established for the particular reserved housing loan program or part thereof from which the fees, premiums and charges are derived as determined by the authority. [L 1982, c 228, pt of §8]

HRS §206E-115 Loans to lenders program

206E-115. Loans to lenders program (a) The authority may make loans to mortgage lenders under terms and conditions requiring that the loan proceeds be used within a time period prescribed by the authority to make eligible loans in an aggregate principal amount substantially equal to the amount of the loan. (b) The loan made to a mortgage lender shall be a general obligation of the respective mortgage lender. (c) The loan as determined by the authority shall: (1) Bear a date or dates; (2) Mature at a time or times; (3) Be evidenced by a note, bond or other certificate of indebtedness; (4) Contain other provisions consistent with this part. (d) Subject to any agreement with the holders of its revenue bonds, the authority may consent to any modification to the rate of interest, time, and payment of any installment of principal or interest, security or any other term of any loan to a mortgage lender or any bond, note, contract, or agreement of any kind to which the authority is a party. [L 1982, c 228, pt of §8]

HRS §206E-116 Loan to lenders program; collateral security

206E-116. Loan to lenders program; collateral security (a) Loans made to mortgage lenders shall be additionally secured by a pledge of a lien upon collateral security in an amount as the authority deems necessary to assure the payment of principal of and interest on the loans as they become due. (b) The authority shall determine the nature and type of collateral security required. (c) A statement designating the collateral security pledged, the mortgage lender pledging the collateral, and the authority's interest in the pledged collateral may be filed with the bureau of conveyances. Where a statement has been filed, no possession, further filing, or other action under any state law shall be required to perfect any security interest which may be deemed to have been created in favor of the authority. The mortgage lender shall be deemed the trustee of an express trust for the benefit of the authority in all matters relating to the pledged collateral. (d) Subject to any agreement with the holders of its revenue bonds, the authority may collect, enforce the collection of, and foreclose on any collateral securing its loans to mortgage lenders. The authority may acquire, take possession, sell at public or private sale with or without bidding, or otherwise deal with the collateral to protect its interests. [L 1982, c 228, pt of §8]

HRS §206E-118 Advance commitments program

206E-118. Advance commitments program (a) The authority may contract with a mortgage lender for the advance commitment to purchase eligible loans or eligible project loans. (b) The contract may contain provisions as determined by the authority to be necessary or appropriate to provide security for its revenue bonds. [L 1982, c 228, pt of §8]

HRS §206E-119 Eligible loan and eligible project loan funding program

206E-119. Eligible loan and eligible project loan funding program (a) The authority may contract with mortgage lenders to fund eligible loans or eligible project loans. (b) The contract may contain provisions as determined by the authority to be necessary or appropriate to provide security for its revenue bonds. [L 1982, c 228, pt of §8]

HRS §206E-120 Loans; service and custody

206E-120. Loans; service and custody The authority may contract for the service and custody of its loans. The contract may provide for the payment of fees or charges for the services rendered; provided that the fees or charges shall not exceed the usual, customary, and reasonable charges for the services rendered. [L 1982, c 228, pt of §8]

HRS §206E-121 Loans; sale, pledge, or assignment

206E-121. Loans; sale, pledge, or assignment (a) Subject to any agreement with the holders of its revenue bonds, the authority may sell its loans at public or private sale at a price and upon terms and conditions as it determines. (b) Subject to any agreement with the holders of its revenue bonds, the authority may pledge or assign its loans, other agreements, notes, or property to secure the loans or agreements. [L 1982, c 228, pt of §8]

HRS §206E-122 Loans; insurance and guarantees

206E-122. Loans; insurance and guarantees The authority may procure insurance or guarantees against any default of its loans, in amounts and from insurers or guarantors, as it deems necessary or desirable. L 1982, c 228, pt of §8

HRS §206E-123 Loans; default

206E-123. Loans; default The authority may: (1) Renegotiate, refinance, or foreclose any loan in default; (2) Waive any default or consent to the modification of the terms of any loan or security agreement; (3) Commence any action to protect or enforce any right conferred upon it by any law, mortgage, insurance policy, contract, or other agreement; (4) Bid for and purchase the property secured by the loan at any foreclosure or other sale or acquire or take possession of the property secured by the loan; and (5) Operate, manage, lease, dispose of, or otherwise deal with the property secured by the loan. [L 1982, c 228, pt of §8; am L 2018, c 18, §8]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol04_Ch0201-0257/HRS0206E/HRS_0206E-.htmFetched: 11/10/2026