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THE SENATE

S.B. NO.

1022

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE DOWNPAYMENT LOAN PROGRAM.

 

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

SECTION 1. The purpose of this Act is to allow "owner-builders" to be eligible for the downpayment loan program.

SECTION 2. Section 201G-322, Hawaii Revised Statutes, is amended to read as follows:

"[[]§201G-322[]] Qualifications for downpayment loan.

(a) No person shall be qualified for a downpayment loan unless the person:

(1) Is a citizen of the United States or a resident alien;

(2) Is at least eighteen years of age;

(3) Is a bona fide resident of the State;

(4) Will physically reside in the residential property to be purchased [for the term of the loan;] from the execution of the downpayment loan, the readiness for occupancy of the home, or the completion of the home to the end of the term of the downpayment loan;

(5) Is accepted by a mortgage lender as a person to whom it is willing to lend money for the purchase of the residential property provided the required downpayment is made; and

(6) Provides a portion of the downpayment which shall be equal to at least three per cent of the sales price[.], or in the case of an owner-builder, the provision of sweat equity equal to three per cent of the sales price.

(b) No person who owns in fee simple or in leasehold any other residential property within the State shall be eligible to become a borrower under this section. A person shall be deemed to own a residential property if the person, the person's spouse, or both (unless separated and living apart under a decree of a court of competent jurisdiction) own a majority interest in a residential property.

(c) As used in this section:

"Downpayment" means an amount of cash equity that is applied towards the purchase price of a residential property or in the case of a owner-builder, the value of sweat equity contributed.

"Owner-builder" means a person who is, or shall become, the legal title holder of the residential property on which a home shall be constructed by the person for use as the person’s principal residence upon completion.

"Value of sweat equity" means the value of work or labor performed by an owner-builder on a residential property, which value is equal to the difference between the value of the residential property, as determined by the corporation, and the purchase price."

SECTION 3. Statutory material to be repealed is bracketed. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

 

INTRODUCED BY:

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