STAND. COM. REP. NO. 3631

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2066

       H.D. 1

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

 

Sir:

 

     Your Committee on Housing, to which was referred H.B. No. 2066, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to create a Downpayment Guarantee Program, which allows the Hawaii Housing Finance and Development Corporation to serve as a guarantor for downpayment loans to first-time homebuyers who:

 

     (1)  Qualify for a mortgage;

 

     (2)  Can provide at least five percent of the sales price as a downpayment; and

 

     (3)  Have completed a financial education program approved by the Hawaii Housing Finance and Development Corporation.

 

     Your Committee received testimony in support of this measure from one individual.  Your Committee received testimony in opposition to this measure from one individual.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and Hawaii Housing Finance and Development Corporation.

 

     Your Committee finds that the measure currently identifies the Dwelling Unit Revolving Fund as a source of funding for this program, but it is not an allowable use of the fund.  Your Committee further finds that the Hawaii Housing Finance and Development Corporation will also require an additional 2.0 full-time equivalent positions and funding to administer the program.  Your Committee notes the concerns of the Department of Commerce and Consumer Affairs that the program may pose a safety and soundness risk, as banks may take on more risk if they believe the State will back up the second mortgage instead of underwriting with the second mortgage as a possible default.

 

     Accordingly, your Committee has amended this measure by:

 

     (1)  Amending the Dwelling Unit Revolving Fund to authorize the use of the fund for the Downpayment Guarantee Program;

 

     (2)  Creating the Loan Loss Reserve Fund Subaccount to administer the Downpayment Guarantee Program;

 

     (3)  Adding two full time equivalent positions within the Hawaii Housing Finance and Development Corporation to administer the Downpayment Guarantee Program; and

 

     (4)  Inserting an effective date of July 1, 2050, to encourage further discussion;

 

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2066, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2066, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

 


Respectfully submitted on behalf of the members of the Committee on Housing,

 

 

 

________________________________

STANLEY CHANG, Chair