HAR §15-317-18. Acquisition cost limitation

(a) No dwelling unit financed shall have an acquisition cost that exceeds the maximum acquisition cost based on the loan limits permitted by section 143(a) of the Internal Revenue Code of 1986, as amended. (b) The acquisition cost shall include: 317-9 (1) All amounts paid, either in cash or in kind, by the eligible borrower (or a related party or for the benefit of the seller) as consideration for the dwelling unit, including the amount of any lien or assessment to which the dwelling unit is subject; and (2) If a dwelling unit is incomplete, the reasonable cost of completing the dwelling unit, whether the cost of completing construction is to be financed with the mortgage loan. (c) The acquisition cost shall not include: (1) The usual and reasonable settlement or financing costs, including: (A) Title and transfer costs; (B) Title insurance; (C) Survey fees or other similar costs; (D) Credit reference fees; (E) Legal fees; (F) Appraisal expenses; (G) Points that are paid by the eligible borrower (but not the seller, even though borne by the eligible borrower through a higher purchase price); or (H) Other costs of financing the dwelling unit, but only in cases to the extent that the amount does not exceed the usual and reasonable costs, which would be paid by the eligible borrower where financing is not provided through the use of tax- exempt bonds; and (2) The cost of land, which has been owned by the mortgagor for at least two years prior to the date that construction of the dwelling unit begins. [Eff ] (Auth: HRS §§201H-93, 201H-94, 201H-97) (Imp: HRS §§201H-18, 201H-94, 201H-106) §15-317-19 Security for loan; establishment of mortgage lien. The mortgage securing each eligible loan shall constitute a second lien on such residential property purchased with the eligible loan. The nonprofit organization or mortgage lender shall promptly record or file, or both, with the bureau of conveyances of the State of Hawaii or the office of the assistant registrar of the land court of the State of Hawaii, as the case may be, except that mortgages for eligible loans located on Hawaiian Home Lands must be recorded with the 317-10 Department of Hawaiian Home Lands (DHHL), to ensure the creation of a valid lien on the property. A certified recorded or filed copy of the mortgage, original promissory note, and an electronic copy of all borrowers’ signed documentation for the eligible loan shall be provided to the corporation within ten working days of the loan closing date. [Eff ] (Auth: HRS §§201H-4, 201H-161)(Imp: HRS §201H-161) §15-317-20 Technical default of loan and acceleration of maturity of loan. The occurrence of any of the following events shall be sufficient grounds for the corporation, at its option, to accelerate the maturity of the loan: (l) The eligible borrower sells, transfers, or refinances the property described in the mortgage; provided, however, that a transfer of title shall be permitted if it appears to the satisfaction of the corporation that the transfer was effected for estate planning purposes and the corporation's security interest is unaffected by the transfer; (2) The eligible borrower rents or fails to occupy the property described in the mortgage as the eligible borrower’s permanent and primary residence; (3) The eligible borrower fails to abide by any agreements executed by the eligible borrower for the purpose of the eligible loan; (4) The corporation finds to be false any statement made by the eligible borrower in the application for an eligible loan ; or (5) The eligible borrower fails to respond in writing within thirty days to the corporation's written request to verify the occupancy of the eligible borrower. [Eff ] (6) Any dwelling unit in which more than fifteen per cent of the total area is reasonably expected to be used primarily in a trade or business shall not be considered a principal residence for purposes of this chapter. (Auth: HRS §§201H-4, 201H-161)(Imp: HRS §201H-161)