Hawaii House Bill HCR172

Hawaii 2025 Regular Session

• Introduced: 3/7/25
• Refer: 3/14/25

Caption

Requesting The Federal Housing Finance Agency To Direct Fannie Mae And Freddie Mac To Repeal Or Reduce The Minimum Insurance Requirements In Guide Section 4703.2, Requiring Condominium Master Insurance Policy Coverage For All Perils In An Amount Equal To One Hundred Percent Of The Replacement Cost Value Of The Project's Improvements.

Impact

Many condominium associations in Hawaii find themselves unable to meet the insurance requirements set forth by Fannie Mae and Freddie Mac, resulting in a lack of access to affordable mortgage financing. With hundreds of associations not complying, their marketability suffers, creating greater financial challenges. Insufficient insurance coverage can lead to associations imposing special assessments on unit owners to fund necessary repairs, thereby increasing the financial burdens on residents already facing high costs of living.

Summary

HCR172 is a House Concurrent Resolution from the Thirty-third Legislature of Hawaii, seeking to urge the Federal Housing Finance Agency to mandate Fannie Mae and Freddie Mac to amend their minimum insurance requirements as outlined in Guide Section 4703.2. This resolution highlights the significant impact these requirements have on condominium associations across Hawaii, where approximately two thousand associations represent a large number of units and residents. The stringent insurance policy coverage, requiring an equivalent to one hundred percent of replacement costs, has become a financial strain on these associations, many of which face aging infrastructure challenges.

Contention

There is notable contention surrounding this bill due to varying opinions on insurance requirements. Supporters argue that reducing these stringent requirements could alleviate financial pressure on condominium associations and their unit owners, enabling them to maintain and insure their properties more effectively. However, concerns may arise regarding the potential implications of loosening insurance standards, such as increased risk for financial institutions and implications for property values. The balance between ensuring adequate protection and providing financial relief remains a contentious issue among stakeholders.