Hawaii-2024-HB926-Introduced

HOUSE OF REPRESENTATIVES	H.B. NO.	926
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO AFFORDABLE HOUSING AND HOMEOWNERSHIP INCENTIVES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the affordable housing crisis continues to be one of the State's most significant and challenging social problems and is a critical issue for many Hawaii residents. The cost of housing continues to increase expeditiously, making home ownership unattainable for many residents of Hawaii. Rent prices in Hawaii increased 13% between 2019 and 2022, more than three times the normal rate of rent inflation. With overall cost of living continuing to rise in Hawaii, one of the largest barriers to entry in the Hawaii housing market is saving for a down payment on a home. Hawaii residents have few programs available to assist in this endeavor.

The legislature also finds that there are multiple government-sponsored loans that allow individuals to buy a home without a down payment, such as Veterans Affairs loans and United States Department of Agriculture Loans. Both provide the opportunity for families that are not able to save enough money for a down payment to become homeowners. The ability to save enough money for a down payment does not equate to the ability to pay a mortgage each month. Allowing eligible Hawaii residents to become mortgagors without being required to pay a hefty down payment can assist in reducing the burden of the high cost of living Hawaii has experienced for many years.

The purpose of this Act is to eliminate the requirement of a down payment for eligible residents of Hawaii. This incentive acknowledges the significant financial and civic benefits of home ownership for the State.

SECTION 2. Chapter 201H, Hawaii Revised Statutes is amended to include the following definitions: "

(1) "Eligible mortgagors" means the mortgagor for a mortgage insured under this section shall, at the time the mortgage is executed, meet the following requirements:

(a) Have a minimum credit score rating of 620

(b) Must be a current bona fide resident of Hawaii

(d) Must be a first-time home buyer

(e) Must be purchasing a home to utilize as the principal residence. The residence securing the mortgage shall be occupied, during the term of the mortgage, by the mortgagor as the mortgagor's principal residence

(f) The mortgagor shall never previously have been the mortgagor under a mortgage insured under this section.

(2) "First-time home buyer" means an individual who is a resident of this state and has not owned or purchased, either individually or jointly, a single-family residence during the period of three years prior to the date of the purchase of a single-family residence.

(3) "Resident of this state" has the meaning given to that term in HRS §11-13."

SECTION 3. Chapter 201H-136.5, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and read as follows:

"201H – Eligible mortgagors cannot be required to provide a down payment by mortgage lenders, corporations, or financial institutions for the purpose of purchasing a home or receiving a home loan. The mortgage may involve an original principal obligation in an amount up to 100 percent of the cost of acquisition of the residence involved and shall not require that the eligible mortgagor shall pay any amount, in cash or its equivalent, on account of the property."

SECTION 4. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023.

INTRODUCED BY:	_____________________________