Hawaii 2025 Regular Session

Hawaii House Bill HB1010 Compare Versions

Only one version of the bill is available at this time.

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1	1	HOUSE OF REPRESENTATIVES H.B. NO. 1010 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	HOUSE OF REPRESENTATIVES H.B. NO. 1010
4	4	THIRTY-THIRD LEGISLATURE, 2025
5	5	STATE OF HAWAII
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7	7	HOUSE OF REPRESENTATIVES
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9	9	H.B. NO.
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11	11	1010
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13	13	THIRTY-THIRD LEGISLATURE, 2025
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	RELATING TO THE RENTAL HOUSING REVOLVING FUND.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. The purpose of this Act is to establish the rental housing revolving fund mixed-income subaccount and to authorize the transfer of funds from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount. SECTION 2. The legislature finds that the State has a housing crisis and that, although general excise tax exemptions and county subsidies help to reduce development costs, private development of rental housing for households earning from sixty up to one hundred forty per cent of the area median income is not financially feasible without additional public subsidy. The legislature also finds that, although funding is appropriated annually to the rental housing revolving fund which may be used to finance projects serving households earning up to one hundred forty per cent of area median income, the revolving funds are prioritized for federal and state low-income housing tax credit financed projects that generally serve households earning up to sixty per cent of the area median income. Because the demand for revolving fund financing from first-priority low‑income housing tax credit projects far exceeds funding availability, mixed-income projects, including those with units serving households earning up to one hundred forty per cent of the area median income, are not able to use the revolving fund. The legislature further finds that strategies are needed to help keep local residents in the State. Having affordable rental housing opportunities for working families reduces net domestic outmigration and preserves critical segments of the State's labor force. Accordingly, the purpose of this Act is to provide a dedicated source of funds to be used by the Hawaii housing finance and development corporation to finance mixed-income rental housing projects. SECTION 3. Section 201H-202, Hawaii Revised Statutes, is amended to read as follows: "§201H-202 Rental housing revolving fund. (a) There is established the rental housing revolving fund to be administered by the corporation. (b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the corporation's housing finance programs; provided that fund moneys shall not be used to finance day‑to‑day administrative expenses of projects allotted fund moneys. (c) The following may be deposited into the fund: appropriations made by the legislature, conveyance taxes pursuant to section 247-7, private contributions, repayment of loans, interest, other returns, and moneys from other sources. (d) The following may be deposited into the mixed-income subaccount established in subsection (f): appropriations made by the legislature, private contributions, repayment of loans, interest, other returns, and moneys from other sources. [(d)] (e) The fund shall be used to provide loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The corporation shall not forgive any loan made from the fund unless the corporation forecloses on the [project.] project's real property pledged as security for the repayment of the loan. Permitted uses of the fund may include but are not limited to planning, design, land acquisition, costs of options, agreements of sale, downpayments, equity financing, capacity building of nonprofit housing developers, credit enhancement, gap financing, or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide for a means of recapturing loans or grants made from the fund if a rental housing project financed under the fund is refinanced or sold at a later date. The rules may also provide that moneys from the fund shall be leveraged with other financial resources to the extent possible. [(e) Moneys] (f) Except as provided in subsection (g), moneys available in the fund shall be used for the purpose of providing, in whole or in part, loans for rental housing projects demonstrating project readiness, efficiency, and feasibility acceptable to the corporation in the following order of priority: (1) For projects that were awarded low-income housing credits pursuant to paragraph (2), priority shall be given to projects with a perpetual affordability commitment; (2) Projects or units in projects that are allocated low‑income housing credits pursuant to the state housing credit ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended, or projects or units in projects that are funded by programs of the United States Department of Housing and Urban Development and United States Department of Agriculture Rural Development wherein: (A) At least fifty per cent of the available units are for persons and families with incomes at or below eighty per cent of the median family income of which at least five per cent of the available units are for persons and families with incomes at or below thirty per cent of the median income; and (B) The remaining units are for persons and families with incomes at or below one hundred per cent of the median family income; provided that the corporation may establish rules to ensure full occupancy of fund projects; and (3) Mixed-income rental projects or units in a mixed‑income rental project [wherein all of the available units are] for persons and families with incomes at or below one hundred forty per cent of the median family income[.]; and (g) There is established within the fund a mixed-income subaccount to be used and administered as follows: (1) The moneys available in the mixed-income subaccount shall be used to make loans to mixed-income rental projects or units in a mixed-income rental project for persons and families with incomes at or below one hundred forty per cent of the median family income; (2) The corporation shall establish an application process for making loans from the mixed-income subaccount that gives preference to projects meeting the following criteria that are listed in descending order of priority: (A) Projects that have a diverse range of affordability, targeting persons and families with incomes up to one hundred forty per cent of the median family income; (B) Projects located on State or county owned land; and (C) Projects for which a loan from the subaccount is reasonably projected to be fully repaid within forty years from funding. The corporation shall adopt rules pursuant to chapter 91 that may include other criteria for giving preferences to projects in the application process. If the corporation, after applying the process described in this paragraph, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in lending funds from the mixed‑income subaccount; and (3) Moneys derived from the repayment of loans made from the mixed-income subaccount, interest earned thereon, and related fees and other returns shall be deposited into the mixed-income subaccount. [(f)] (h) There is established within the fund a bond volume cap recycling program subaccount. The bond volume cap recycling program subaccount shall be maintained as a reserve for the bond volume cap recycling program established pursuant to section 39B-2(f). [(g)] (i) The corporation shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session describing the projects funded and, with respect to rental housing projects targeted for persons and families with incomes at or below thirty per cent of the median family income, its efforts to develop those rental housing projects, a description of proposals submitted for this target group and action taken on the proposals, and any barriers to developing housing units for this target group. [(h)] (j) For the purposes of this subpart, the applicable median family income shall be the median family income for the county or standard metropolitan statistical area in which the project is located as determined by the United States Department of Housing and Urban Development, as adjusted from time to time. [(i)] (k) The corporation may provide loans under this section; provided that the corporation shall establish loan‑to‑value ratios to protect the fund from inordinate risk and that under no circumstances shall the rules permit the loan‑to-value ratio to exceed one hundred per cent; provided further that the underwriting guidelines include a debt-coverage ratio of no less than 1.0 to 1. [(j)] (l) For the period commencing July 1, 2005, through June 30, 2009, the fund may be used to provide grants for rental units set aside for persons and families with incomes at or below thirty per cent of the median family income in any project financed in whole or in part by the fund in proportion of those units to the total number of units in the project. At the conclusion of the period described in this subsection, the corporation shall report to the legislature on the number and use of grants provided and whether the grants were an effective use of the funds for purposes of developing rental housing for families at or below thirty per cent of the median family income." SECTION 4. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows: "[[]§201H-204[]] Eligible projects. (a) Activities eligible for assistance from the fund shall include but not be limited to: (1) New construction, rehabilitation, or preservation of low-income rental housing units that meet the criteria for eligibility described in subsection (c)[;] or in subsection 201H-202(g)(2); (2) The leveraging of moneys with the use of fund assets; (3) Pre-development activity [grants or] loans to nonprofit organizations; and (4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing. (b) Preference shall be given to projects producing units in at least one of the following categories: (1) Multifamily units; (2) Attached single-family units; (3) Apartments; (4) Townhouses; (5) Housing units above commercial or industrial space; (6) Single room occupancy units; (7) Accessory apartment units; (8) Employee housing; (9) United States Department of Housing and Urban Development mixed finance development of public housing units; and (10) Other types of units meeting the criteria for eligibility set forth in subsection (c)[.] or in subsection 201H-202(g)(2). (c) [The] Except as provided in section 201H-202(g)(2), the corporation shall establish an application process for fund allocation that gives preference to projects meeting the following criteria that are listed in descending order of priority: (1) Serve the original target group; (2) Provide at least five per cent of the total number of units for persons and families with incomes at or below thirty per cent of the median family income; (3) Provide the maximum number of units for persons or families with incomes at or below eighty per cent of the median family income; (4) Are committed to serving the target group over a longer period of time; (5) Increase the integration of income levels of the immediate community area; (6) Meet the geographic needs of the target group of the proposed rental housing project, such as proximity to employment centers and services; and (7) Have favorable past performance in developing, owning, managing, or maintaining affordable rental housing. The rules adopted by the corporation pursuant to chapter 91 may include other criteria as it deems necessary to carry out the purposes of this subpart. If the corporation, after applying the process described in this subsection, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in [allotting] lending fund moneys." SECTION 5. The director of finance is authorized to transfer moneys from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount in an amount not to exceed $ for fiscal year 2025-2026. SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 7. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________ BY REQUEST
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49	49	SECTION 1. The purpose of this Act is to establish the rental housing revolving fund mixed-income subaccount and to authorize the transfer of funds from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount.
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51	51	SECTION 2. The legislature finds that the State has a housing crisis and that, although general excise tax exemptions and county subsidies help to reduce development costs, private development of rental housing for households earning from sixty up to one hundred forty per cent of the area median income is not financially feasible without additional public subsidy.
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53	53	The legislature also finds that, although funding is appropriated annually to the rental housing revolving fund which may be used to finance projects serving households earning up to one hundred forty per cent of area median income, the revolving funds are prioritized for federal and state low-income housing tax credit financed projects that generally serve households earning up to sixty per cent of the area median income. Because the demand for revolving fund financing from first-priority low‑income housing tax credit projects far exceeds funding availability, mixed-income projects, including those with units serving households earning up to one hundred forty per cent of the area median income, are not able to use the revolving fund.
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55	55	The legislature further finds that strategies are needed to help keep local residents in the State. Having affordable rental housing opportunities for working families reduces net domestic outmigration and preserves critical segments of the State's labor force.
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57	57	Accordingly, the purpose of this Act is to provide a dedicated source of funds to be used by the Hawaii housing finance and development corporation to finance mixed-income rental housing projects.
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59	59	SECTION 3. Section 201H-202, Hawaii Revised Statutes, is amended to read as follows:
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61	61	"§201H-202 Rental housing revolving fund. (a) There is established the rental housing revolving fund to be administered by the corporation.
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63	63	(b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the corporation's housing finance programs; provided that fund moneys shall not be used to finance day‑to‑day administrative expenses of projects allotted fund moneys.
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65	65	(c) The following may be deposited into the fund: appropriations made by the legislature, conveyance taxes pursuant to section 247-7, private contributions, repayment of loans, interest, other returns, and moneys from other sources.
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67	67	(d) The following may be deposited into the mixed-income subaccount established in subsection (f): appropriations made by the legislature, private contributions, repayment of loans, interest, other returns, and moneys from other sources.
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69	69	[(d)] (e) The fund shall be used to provide loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The corporation shall not forgive any loan made from the fund unless the corporation forecloses on the [project.] project's real property pledged as security for the repayment of the loan. Permitted uses of the fund may include but are not limited to planning, design, land acquisition, costs of options, agreements of sale, downpayments, equity financing, capacity building of nonprofit housing developers, credit enhancement, gap financing, or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide for a means of recapturing loans or grants made from the fund if a rental housing project financed under the fund is refinanced or sold at a later date. The rules may also provide that moneys from the fund shall be leveraged with other financial resources to the extent possible.
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71	71	[(e) Moneys] (f) Except as provided in subsection (g), moneys available in the fund shall be used for the purpose of providing, in whole or in part, loans for rental housing projects demonstrating project readiness, efficiency, and feasibility acceptable to the corporation in the following order of priority:
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73	73	(1) For projects that were awarded low-income housing credits pursuant to paragraph (2), priority shall be given to projects with a perpetual affordability commitment;
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75	75	(2) Projects or units in projects that are allocated low‑income housing credits pursuant to the state housing credit ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended, or projects or units in projects that are funded by programs of the United States Department of Housing and Urban Development and United States Department of Agriculture Rural Development wherein:
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77	77	(A) At least fifty per cent of the available units are for persons and families with incomes at or below eighty per cent of the median family income of which at least five per cent of the available units are for persons and families with incomes at or below thirty per cent of the median income; and
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79	79	(B) The remaining units are for persons and families with incomes at or below one hundred per cent of the median family income;
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81	81	provided that the corporation may establish rules to ensure full occupancy of fund projects; and
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83	83	(3) Mixed-income rental projects or units in a mixed‑income rental project [wherein all of the available units are] for persons and families with incomes at or below one hundred forty per cent of the median family income[.]; and
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85	85	(g) There is established within the fund a mixed-income subaccount to be used and administered as follows:
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87	87	(1) The moneys available in the mixed-income subaccount shall be used to make loans to mixed-income rental projects or units in a mixed-income rental project for persons and families with incomes at or below one hundred forty per cent of the median family income;
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89	89	(2) The corporation shall establish an application process for making loans from the mixed-income subaccount that gives preference to projects meeting the following criteria that are listed in descending order of priority:
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91	91	(A) Projects that have a diverse range of affordability, targeting persons and families with incomes up to one hundred forty per cent of the median family income;
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93	93	(B) Projects located on State or county owned land; and
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95	95	(C) Projects for which a loan from the subaccount is reasonably projected to be fully repaid within forty years from funding.
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97	97	The corporation shall adopt rules pursuant to chapter 91 that may include other criteria for giving preferences to projects in the application process. If the corporation, after applying the process described in this paragraph, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in lending funds from the mixed‑income subaccount; and
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99	99	(3) Moneys derived from the repayment of loans made from the mixed-income subaccount, interest earned thereon, and related fees and other returns shall be deposited into the mixed-income subaccount.
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101	101	[(f)] (h) There is established within the fund a bond volume cap recycling program subaccount. The bond volume cap recycling program subaccount shall be maintained as a reserve for the bond volume cap recycling program established pursuant to section 39B-2(f).
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103	103	[(g)] (i) The corporation shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session describing the projects funded and, with respect to rental housing projects targeted for persons and families with incomes at or below thirty per cent of the median family income, its efforts to develop those rental housing projects, a description of proposals submitted for this target group and action taken on the proposals, and any barriers to developing housing units for this target group.
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105	105	[(h)] (j) For the purposes of this subpart, the applicable median family income shall be the median family income for the county or standard metropolitan statistical area in which the project is located as determined by the United States Department of Housing and Urban Development, as adjusted from time to time.
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107	107	[(i)] (k) The corporation may provide loans under this section; provided that the corporation shall establish loan‑to‑value ratios to protect the fund from inordinate risk and that under no circumstances shall the rules permit the loan‑to-value ratio to exceed one hundred per cent; provided further that the underwriting guidelines include a debt-coverage ratio of no less than 1.0 to 1.
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109	109	[(j)] (l) For the period commencing July 1, 2005, through June 30, 2009, the fund may be used to provide grants for rental units set aside for persons and families with incomes at or below thirty per cent of the median family income in any project financed in whole or in part by the fund in proportion of those units to the total number of units in the project. At the conclusion of the period described in this subsection, the corporation shall report to the legislature on the number and use of grants provided and whether the grants were an effective use of the funds for purposes of developing rental housing for families at or below thirty per cent of the median family income."
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111	111	SECTION 4. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
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113	113	"[[]§201H-204[]] Eligible projects. (a) Activities eligible for assistance from the fund shall include but not be limited to:
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115	115	(1) New construction, rehabilitation, or preservation of low-income rental housing units that meet the criteria for eligibility described in subsection (c)[;] or in subsection 201H-202(g)(2);
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117	117	(2) The leveraging of moneys with the use of fund assets;
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119	119	(3) Pre-development activity [grants or] loans to nonprofit organizations; and
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121	121	(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
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123	123	(b) Preference shall be given to projects producing units in at least one of the following categories:
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125	125	(1) Multifamily units;
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127	127	(2) Attached single-family units;
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129	129	(3) Apartments;
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131	131	(4) Townhouses;
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133	133	(5) Housing units above commercial or industrial space;
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135	135	(6) Single room occupancy units;
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137	137	(7) Accessory apartment units;
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139	139	(8) Employee housing;
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141	141	(9) United States Department of Housing and Urban Development mixed finance development of public housing units; and
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143	143	(10) Other types of units meeting the criteria for eligibility set forth in subsection (c)[.] or in subsection 201H-202(g)(2).
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145	145	(c) [The] Except as provided in section 201H-202(g)(2), the corporation shall establish an application process for fund allocation that gives preference to projects meeting the following criteria that are listed in descending order of priority:
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147	147	(1) Serve the original target group;
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149	149	(2) Provide at least five per cent of the total number of units for persons and families with incomes at or below thirty per cent of the median family income;
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151	151	(3) Provide the maximum number of units for persons or families with incomes at or below eighty per cent of the median family income;
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153	153	(4) Are committed to serving the target group over a longer period of time;
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155	155	(5) Increase the integration of income levels of the immediate community area;
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157	157	(6) Meet the geographic needs of the target group of the proposed rental housing project, such as proximity to employment centers and services; and
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159	159	(7) Have favorable past performance in developing, owning, managing, or maintaining affordable rental housing.
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161	161	The rules adopted by the corporation pursuant to chapter 91 may include other criteria as it deems necessary to carry out the purposes of this subpart.
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163	163	If the corporation, after applying the process described in this subsection, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in [allotting] lending fund moneys."
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165	165	SECTION 5. The director of finance is authorized to transfer moneys from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount in an amount not to exceed $ for fiscal year 2025-2026.
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167	167	SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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169	169	SECTION 7. This Act shall take effect upon its approval.
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173	173	INTRODUCED BY: _____________________________
174	174	BY REQUEST
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176	176	INTRODUCED BY:
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178	178	_____________________________
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182	182	BY REQUEST
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184	184	Report Title: Hawaii Housing Finance and Development Corporation; RHRF; Mixed-Income Rental Housing; Subaccount Description: Creates a mixed-income rental housing subaccount under the Rental Housing Revolving Fund which shall make loans to mixed-income rental projects or units in a mixed-income rental project. Authorizes the transfer of moneys from the Rental Housing Revolving Fund to the Rental Housing Revolving Fund Mixed-Income Subaccount. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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192	192	Report Title:
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194	194	Hawaii Housing Finance and Development Corporation; RHRF; Mixed-Income Rental Housing; Subaccount
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198	198	Description:
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200	200	Creates a mixed-income rental housing subaccount under the Rental Housing Revolving Fund which shall make loans to mixed-income rental projects or units in a mixed-income rental project. Authorizes the transfer of moneys from the Rental Housing Revolving Fund to the Rental Housing Revolving Fund Mixed-Income Subaccount.
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208	208	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.