Bill Text: HI SB1329 | 2025 | Regular Session | Introduced
Bill Title: Relating To The Rental Housing Revolving Fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-27 - Referred to HOU, WAM. [SB1329 Detail]
Download: Hawaii-2025-SB1329-Introduced.html
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THE SENATE |
S.B. NO. |
1329 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE RENTAL HOUSING REVOLVING FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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.
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INTRODUCED BY: |
_____________________________ |
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BY REQUEST |
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.
