Initially introduced on January 23 and sponsored by nine members – including Democratic Reps. Kim Coco Iwamoto, Elle Cochran and Tina Nakada Grandinetti, and Republican representatives. Christopher L. Muraoka and Kanani Souza – the bill said that such a program could help to help older Hawaiians, referred to as ‘Kupuna’, with the rising costs of homeowners.
RMD put out his hand to the offices of different sponsor laws in the state, but did not receive an immediate answer.
“The legislative power finds that a lot of Kupuna in Hawaii with limited pension income that may have equity in their home are confronted with challenges in increasing increased costs with regard to homeowner; Whether it concerns rising maintenance costs, community assessments or insurance costs, ”is the bill.
“Setting up a state rated by the State [HECM] program, similar to the federal Housing and Urban Development Department (HUD) Program for eligible pensioners can offer a home security and exemption for some Kupuna. “
The program would help “to offer a path to affordable rental properties for Kupuna who have exhausted their equity, helping to prevent older displacement and homelessness,” added the bill, and would set up a Kupuna HECM program under the scope of the HFDC From the state.
Similar to the HECM program sponsored by the Federal Housing Administration (FHA), The proposed program would have a minimum age of 62 and would add the HECM insurance authority to the HFDC. Lenders who offer the program must be approved by the state agency, while borrowers must meet the age requirement and individual counseling requirements.
The bill also states that the borrower is “not liable for any difference between the net amount of the remaining debt of the Kupuna house owner under the mortgage and the amount found by the mortgage holder”, language similar to the FHA-stunned HECM programs not -re -recording function.
The bill also calls for the program to wear a variety of payment options, including a standby credit line and various monthly payment options.
And the bill has a provision that would make help for a borrower when the equity in their home is exhausted. At that time, HFDC would “coordinate with and the Kupuna homeowner to move to an affordable rental properties under the company and start the sale of the home,” is the bill.
After that point, the borrower will “have no debts after the sale of the home”, and the rents in a new home would “be” comparable to rental interest under tenant -based housing choice program “managed by HUD.
In an e -mail realization for his membership, NRMLA said that it will revise the bill with his external general counsel and will weigh as soon as that assessment is completed.
On state -based reverse mortgage programs are extremely rare. An exception is a program in Montana that sponsor a “reverse annuity mortage” (RAM) program with lower interest rates and yields, along with a higher minimal qualifying age that distinguishes the fha-supported HECM program.
But fha-supported HECMs are only a small fraction of all American mortgage installations, and the Montana program is so unknown that some area institutions were not even aware of it when RMD requested. This is mainly because applications are handled by the board of the state. But last summer the State raised the promotion of the program in an attempt to exhaust his budget assignment from the legislative power of Montana.
‘[The RAM program] Had an available balance, which is rare because very little of our programs have available financing, and I certainly do not like to leave resources on the table when we have to use them to serve our citizens, ”Cheryl Cohen, division manager for the Housing division on the Montana Department of Commerce and executive director of the Montana Board of Housingsaid in an interview with RMD in August 2024.
But the Hawaii proposal is also greater in reach than the Montana program, which has a more limited suitability threshold including a higher minimum age and a maximum loan amount of $ 150,000.
