HAR §15-165-4. Definitions

(a) The definitions of "housing loan programs", 11 securities", "trustee•·, and 11trust indenture .. , set forth in section 201G-241, HRS, are incorporated by reference. (b) The definition of 11mortgage lender", set forth in section 201G-241, HRS, is incorporated by reference. The term "mortgage lender" also includes a 0 mortgage broker" under chapter 454, HRS whose net worth is no less than $500,000. (c) As used in this chapter: 11 Administrator" means the executive director, including the executive director 1 s designated representatives, employed by the board. "Board" means the board of directors of the housing and community development corporation of Hawaii. "Corporation 11 means the housing and community development corporation of Hawaii established under chapter 201G, HRS. ti Develop•' or 0 development" means the planning, financing, acquisition of real and personal property, demolition of existing structures, clearance of real property, construction, reconstruction, alteration, or repairing of approaches, streets, sidewalks, utilities, and se~vices, or other site improvements, or 165-3 2237 §15-165-4 construction, reconstruction, repair, remodeling, extension, equipment, or furnishing of buildings or other structures, or any combination of the foregoing, of any housing project. It also includes any and all undertakings necessary therefor, and the acquisition of any housing, in whole or in part. "Eligible borrower 11 means: (1) Any person or family, irrespective of race, creed, national origin, or sex, who: (A) Is a citizen of the United States or a declarant alien; (B) Is a bona fide resident of the State; {C) Is at least of legal age; (D) Does not personally, or whose spouse if the person is married, own a majority interest in any residential property in the State; (E) Does not have an income which exceeds one hundred forty per cent of the area median income as determined by the United States department of housing and urban development and as adjusted by the corporation for family size; or (2) A qualified sponsor of an affordable housing project. 11Eligible developer" means an individual, partnership, corporation or public agency which the board has determined (1) to be qualified by experience and financial responsibility and support to construct housing of the type described and of the magnitude encompassed by a given project or development; (2) to have submitted plans for a development adequately meeting the objectives of chapter 201G, HRS, the maintenance of aesthetic values in the locale of the project or development, and the requirements of all applicable environmental statutes and rules; and (3) to meet all other requirements that the corporation deems to be just and reasonable, and all other requirements provided in these rules. 0 Eligible housing project .. means a project principally targeted to meeting the housing needs of persons or families earning up to one hundred forty per cent of the area median income as determined by the united States Department of Housing and Urban Development, and which meets other requirements as set forth in the procedural guide established by the • corporat.ion. 165-4 2237 §15-165-4 "Eligible loan" or "loan 11 means: (1) A loan to an eligible borrower for the purchase of a housing unit, including a condominium unit; provided that the property financed is located in the State, will be occupied as the principal place of residence by the eligible borrower. An el1gible loan includes a first mortgage loan which, unless otherwise expressly waived by the board, is insured by a mortgage insurer acceptable to the corporation and which has been made to an eligible borrower; or (2) An interim or permanent loan, which may be federally insured or guaranteed, made to a qualified sponsor for the financing of an eligible housing project. "Governor .. means the duly elected governor of the State of Hawaii whose office was created by Article V of the Constitution of the State of Hawaii. "HRS" means the Hawaii Revised Statutes, as amended. "Mortgage originator 11 means a mortgage lender who originates mortgage loans, which will be closed in the name of the corporation, as the mortgage lender. nMortgage servicer" means an institution approved by the corporation to service mortgages made or purchased by the corporation. The mortgage servicer will perform the obligations described in a mortgage servicing agreement in a manner which protects the corporation's interests. ~Projecth or ~housing project" means a plan, design, or undertaking by the corporation or an eligible developer for the developme~t of dwelling units, and includes all real and personal property, buildings and improvements, commercial space, lands for farming and gardening, community facilities acquired or constructed or to be acquired or constructed, and all tangible or intangible assets held or used in connection with the housing project. 0 Qualified sponsor 11 means qualified sponsor as defined in part III, chapter 201G, HRS, and who is determined by the corporation to have articles of incorporation or comparable documents of organization or a written agreement with the corporation which, in addition to other requirements of law, provides that if the person or entity receives an eligible project· loan from the corporation as provided for in part III, 165-5 22 a 1 §15-165-4 chapter 201G, HRS, it shall be authorized to enter into an agreement with the corporation, providing for regulations with respect to rents, profits, dividends, and dispositions of property or franchises. "Rules" means these rules. "State .. !P.e!lllll State of Hawaii. [Eff QC I l:) 1Q99 J (Auth: HRS §2O1G-4, 201G- 243) (Imp: HRS §201G-241} SlS-165-5 Delegation. The corporation delegates to the administrator the authority to implement and carry out the ,u~oses of these rules. [Eff OCT 2 5 1 9~l ] (Auth: HRS §201G-4, 201G-243) (Imp: HRS §20 G-2(b)) SlS-165-6 General. Specific provisions of section 201G-161, HRS, authorize the corporation to issue securities from time to time in the name of the corporation (and not in the name of the State) in such amounts as may be necessary to provide financing for mortgage loans and housing projects as authorized and approved by the corporation under section 201G-243, HRS. Except as provided in sections 201G-161, 201G-164 through 201G-167, 201G-170, HRS, the securities shall be issued pursuant to part III of chapter 39, HRS. The corporation is authorized to assign eligible loans to the trustee as security for the payment of the corporation's securities pursuant to a trust indenture or such other security agreement required by the trustee. All issuances of securities by the corporation shallJ:l,c; wcu::te1 gfAfAlY with the approval of the governor. [Eff UL.ii lo i~~ ) (Auth: HRS §201G-4, 201G-243) (Imp: HRS §§201G-161, 201G-164 - 201G-l67, 201G-170 SUBCHAPTER 3 TAXABLE MORTGAGE SECURITIES; MORTGAGE LOAN PROGRAM SlS-165-11 Housing loan programs. (a) The proceeds from the issuance and sale of securities·to fund housing loan programs which the board has 165--6 2237 §15-165-11 authorized and approved pursuant to section 201G-243, HRS, may be used to enable the corporation to: (1) purchase eligible loans from one or more mortgage lenders; and {2) make eligible loans which have been originated by one or more mortgage lenders which have been or will be made to enable eligible borrowers to finance the purchase of a home in a specific project or development for which the developer is: (A) the corporation; or (B) an eligible developer together with the corporation; or (C) an eligible developer. (b) With the approval of the board, a portion of the proceeds from the issuance and sale of securities may also be used to provide spot mortgage financing to enable eligible borrowers to finance the purchase of a home. Such mortgage financing may be made available through the corporation•s purchase of a spot eligible loan from a mortgage lender or through the corporation making a spot eligible loan, which a mortgage lender has originated, to an eligible borrower. (c) As part of a housing loan program, the corporation may as a result of auction, invitation of tender, advance commitment or other negotiation limit a housing loan program for a specific project or development to only one mortgage lender or to several mortgage lenders. In deciding whether to work with only one mortgage lender or with a limited number of mortgage lenders, the corporation shall consider no less than the following factors: (1) the amount of securities being issued and the amount of proceeds which will be allocated to fund a housing loan program to finance the purchase of homes by eligible borrowers in a specific project or development; {2) the mortgage lender·s experience in mortgage lending, financial strength and resources, including personnel to either make or originate eligible loans expeditiously; (3) the services available from the mortgage lender; (4) the fees and charges, including loan or origination fees, of the mortgage lender; (5) the practicality of dealing with one mortgage lender or with a limited number of mortgage 165-7 2237 §15-165-11 lenders in connection with financing the purchase of homes by eligible borrowers in a particular project or development; and (6) such other factors which will tend to reduce the cost of mortgage financing or which will facilitate and promote the expeditious development of affordable housing. None of the foregoing factors shall be deemed controlling and the board shall have the discretion in selecting one mortgage lender or several mortgage lendel,,f, ~J;>articipate in a home loan program. [Eff uC' l 5 199Q ] (Auth: HRS S201G-4 I 201G-243) (Imp: HRS §§201e'-242, 201G-243) SlS-165-12 Commitment of funds. (a) The corporation may conunit the proceeds from the issuance and sale of securities to fund housing loan programs for projects or developments, including specific projects or developments in which the corporation is the developer or an eligible developer together with the corporation are the developers, and for housing loan programs providing spot mortgage loan financing. (b) As a condition for a commitment 0£ funds for any housing loan program for a specific project or development, the corporation may require the eligible developer to establish a reserve fund with the eligible developer's own funds to cover interest costs of the corporation's securities. The corporation shall establish the term during which such reserve fund must be maintained. After the term expires, any funds remaining in the reserve fund shall be returned to the eligible developer. All interest or other income earned from the reserve fund shall belong to the corporation. The corporation shall apply such interest or other income in furtherance of the corporation's housing loan programs. [ Eff OCT 2 5 1Q99 ] (Auth: HRS §201G-4, 201G-243) (Imp: HRS §201G-242) 515-165-13 Procedural guide. (a) The corporation shall prepare a procedural guide consistent with these rules. The procedural guide, as amended or supplemented from time to time by the board and at the board's sole discretion, shall cover without limitation guidelines and procedures relating to the following matters: • (l)• the purchase of eligible loans, which have 165-8 2287 §15-165-14 been made to eligible borrowers by a mortgage lender; (2) the origination of eligible loans by a mortgage lender; (3) the servicing of eligible loans; (4) qualification for mortgage insurers, mortgage originators and mortgage servicers· and their respective responsibilities and contractual obligations to the corporation; (5) fees, premiums and charges relating to housing loan programs; (6) individual or pooled mortgage insurance coverage for eligible loans; and (7) defaults. (b) A copy of the procedural guide shall at all times be kept at the principal office of the corporation in its most current form and shall be available for inspection at the corporation•s normal business hours. (c) The purchase of eligible loans from a mortgage lender shall be governed by a mortgage purchase agreement. The origination of eligible loans by a mortgage lender shall be governed by a mortgage origination agreement. The corporation may require mortgage lenders to sign and deliver such other documents which the corporation shall require generally for all housing loan programs or in connection with a housing loan,,.erogram for a specific project or development. [Eff uCT 2 5J90Q ] (Auth: HRS §201G-4, 201G-243) (Imp: HRS §201 -r.f4)