State Assisted Sales and Lease Program

DEPARTMENT OF BUSINESS, BUSINESS, ECONOMIC DEVELOPMENT DEVELOPMENT TOURISM AND TOURISM

Amendment and Compilation Amendment Compilation of Chapter 15-308, Hawaii Administrative Rules Hawaii

November 14, 2022 November 2022

SUMMARY

1. §§15-308-1 through 15-308-4 §§15-308-1 15-308-4 are are amended.

2. §S15-308-21 and 15-308-22 §§15-308-21 15-308-22 are are amended.

3. §15-308-24 is §15-308-24 is amended.

4. §§15-308-27 and 15-308-28 §§15-308-27 15-308-28 are are amended.

5. §§15-308-41 through 15-308-44 §§15-308-41 15-308-44 are are amended.

6. §15-308-61 is §15-308-61 is amended.

7. and 15-308-64 §§15-308-63 and 15-308-64 are are amended.

8. §S15-308-83 through §§15-308-83 through 15-308-86 15-308-86 are are amended.

9. §S15-308-89 and 15-308-90 §§15-308~89 15-308-90 are are amended.

SS15-308-106 through 10. §§15-308-106 through 15-308-108 15-308-108 are are amended.

§15-308-122 is 11. §15-308-122 is amended. I �

§15-308-124 is amended. 12. §15-308-124

S§15-308-128 and 13. §§15-308-128 and 15-308-129 15-308-129 are are amended.

§15-308-151 is 14. §15-308-151 is amended.

§§15-308-153 and 15. §§15-308-153 and 15-308-154 15-308-154 are are amended.

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§15-308-173 is 16. §15-308-173 is amended.

Chapter 308 is 17. Chapter is compiled.

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HAWAII HAWAII ADMINISTRATIVE RULES

TITLE 15 TITLE

DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT TOURISM AND TOURISM

SUBTITLE 14 SUBTITLE 14 HAWAII HOUSING HAWAII HOUSING FINANCE FINANCE AND DEVELOPMENT CORPORATION CORPORATION CHAPTER 308 CHAPTER

ASSISTED SALES AND LEASE PROGRAM STATE ASSISTED PROGRAM

Subchapter 1 Subchapter General Provisions General

$15-308-1 §15-308-1 Purpose §15-308-2 §15-308-2 Definitions §15-308-3 to other chapters References to §15-308-4 Fees

Subchapter 2 Subchapter Eligibility and Preferences to Eligibility to Purchase Affordable Dwelling Units

§15-308-21 Purpose $15-308-22 §15-308-22 Eligibility Eligibility $15-308-23 §15-308-23 Eligibility for current Eligibility current owners in in corporation sponsored corporation sponsored projects §15-308-24 Eligibility for former owners in Eligibility in corporation sponsored corporation sponsored projects $15-308-25 §15-308-25, sale units Occupancy guidelines for sale $15-308-26 §15-308-26 Counseling §15-308-27 Preference in Preference in dwelling dwelling unit unit sales $15-308-28 §15-308-28 Information and verification Information verification

Subchapter 3 Subchapter Marketing and Sale of Affordable Dwelling Units

$15-308-41 §15-308-41 sale of dwelling units Marketing and sale §15-308-42 Announcement, publication §15-308-43 intake list, Application intake list, requirements

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$15-308-44 §15-308-44 residential units Sale of residential

Subchapter 4 Subchapter Rental of Corporation-Owned Rental Corporation-Owned' Dwelling Units

$15-308-61 §15-308-61 Eligibility Eligibility $15-308-62 §15-308-62 Occupancy guidelines for rental units §15-308-63 Preference for the rental of dwelling units §15-308-64 §15-308-64 verification Information and verification §15-308-65 Rent determination Rent determination S$15-308-66 §15-308-66 Rental agreement Rental agreement §15-308-67 Program administration Program administration

Subchapter 5 Subchapter Repurchase of Dwelling Units Subject to Subject to Restrictions $15-308-81 §15-308-81 Purpose $15-308-82 §15-308-82 Applicability Applicability S$15-308-83 §15-308-83 Providing consent consent toto additional financing financing $15-308-84 §15-308-84 owner seeks to Repurchase when owner to transfer title title $15-308-85 §15-308-85 Determination of repurchase price for purchases subject toto restrictions restrictions S15-308-86 §15-308-86 Waiver by corporation Waiver corporation of right to to repurchase repurchase $15-308-87 §15-308-87 corporation of right to Release by corporation to purchase §15-308-88 §15-308-88 regarding repurchase Procedures regarding repurchase by corporation and waiver of right of corporation repurchase repurchase $15-308-89 §15-308-89 repurchased Resale or rental of repurchased dwelling unit dwelling unit §$15-308-90 §15-308-90 'Repurchase Repurchase under under foreclosure foreclosure of tI I� �

subject to properties subject to restrictions restrictions

Subchapter 6 Subchapter Program Shared Appreciation Equity Program Restrictions

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§15-308-101 Purpose $15-308-102 §15-308-102 Applicability Applicability $15-308-103 §15-308-103 share of net Corporation's percentage share net appreciation appreciation $15-308-104 §15-308-104 Payment due on sale Payment sale or transfer S$15-308-105 §15-308-105 sale or transfer Definition of sale $15-308-106 §15-308-106 transfers Permitted transfers §15-308-107 market value Determination of fair market $15-308-108 §15-308-108 the corporation's share Cancellation of the share the net of the net appreciation appreciation $15-308-109 §15-308-109 the right to Exercise of the to purchase restriction restriction §15-308-110 Prepayment of corporation's percentage Prepayment share of net share net appreciation appreciation

Subchapter 7 Subchapter Owner Occupancy Waiver Owner Waiver Procedures

$15-308-121 §15-308-121 applicability Purpose and applicability §$15-308-122 §15-308-122 Application for temporary Application temporary owner owner waiver occupancy waiver S15-308-123 §15-308-123 required Hardship circumstances required §15-308-124 §15-308-124 temporary waiver Duration of temporary waiver $15-308-125 §15-308-125 the dwelling Allowable uses of the dwelling unit unit during the during the temporary temporary waiver waiver period §15-308-126 Proof of occupancy Proof S15-308-127 §15-308-127 the owner Extension of the owner occupancy requirement requirement S$15-308-128 §15-308-128 administrative expenses and Recovery of administrative Attorneys' fees fees S$15-308-129 §15-308-129 to reoccupy Failure to reoccupy §15-308-130 the temporary Extension of the temporary waiver waiver period

Subchapter 8 Subchapter to Implement Procedures to Implement Qualified Resident Preferences in Resident in the the Initial Initial Sale of Market-Priced Dwelling Units

§15-308-151 publication Announcement; publication §15-308-152 Designation of residential units §15-308-153 list; requirements Reservation list; §15-308-154 Sale of residential units

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Subchapter 9 Subchapter Corporation Administration of Corporation Leases

§15-308-171 Purpose §15-308-172 Applicability §15-308-173 leases Administration of residential leases §15-308-174 General lease General lease provisions §15-308-175 fixed rent period or term Extension of fixed term for mortgage purposes $15-308-176 §15-308-176 leased fee Sale of leased fee interest of the the land land

Historical Note: Chapter 308 of Title Chapter Title 15, Hawaii Hawaii formerly part Administrative Rules, was formerly part of Chapter Chapter 15- Hawaii Administrative Rules [Eff 307, Hawaii [Eff 12/04/10; am am and comp 4/28/17], Chapter 373 of Title 6, Hawaii Hawaii am 8/3/92; R [Eff 1/9/89; am Administrative Rules [Eff Chapter 175 of Title 15, Hawaii 10/25/99], and Chapter Hawaii [Eff 10/25/99; R 12/04/10]. Administrative Rules [Eff

SUBCHAPTER 1 SUBCHAPTER

PROVISIONS GENERAL PROVISIONS

§15-308-1 Purpose. is adopted This chapter is adopted under chapter 91, HRS, and implements the under the provisions of chapter 201H, HRS, providing for thethe sale, resale, resale, dwelling purchase, repurchase, lease, or rental of dwelling units. Priority for affordable Priority affordable units marketed and sold sold under this chapter shall be for first-time under first-time homebuyers require the who require the assistance assistance of programs under under chapter to purchase their home. A first-time 201H, HRS, to first-time homebuyer who intends to homebuyer unit developed or to purchase a unit sold under sold under this this chapter with cash cash does not not require require the assistance of assistance of programs under under chapter 201H, HRS, to to homeowner. become a homeowner. am and comp DE[ ] 0 [Eff 1/15/22; am [Eff ( 202? ] (Auth: HRS §201H-4) (Imp: HRS §201H-4)

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§15-308-2 Definitions. Definitions. As As used in in this this chapter: means expenses incurred "Administrative expenses" means incurred the corporation by the corporation for activities activities performed inin conjunction with the administration conjunction administration of this this chapter pursuant to pursuant to sections 201H-47 thru thru 201H-51, HRS. Such may include, but costs may but are are not not limited limited to to salaries, necessary other employee benefits, and other expenses necessary to administer this to this chapter. means the "Administrator" means the executive director the board or the employed by the the executive director's designated representative. designated means the primary person who submits "Applicant" means application to an application to purchase a property under under chapter 201H, HRS, and if applicable, applicant's spouse, co- 201H, co­ co-applicant spouse. applicant, and co-applicant "Application" means an application "Application" application toto purchase a unit in unit in a project. An application application is is deemed complete when submitted together with thethe required required supporting supporting information and verification information verification documents for determination of eligibility determination eligibility to to purchase a unit unit in in a new for-sale new for-sale affordable development, on a formform the corporation. approved by the "Application for relief" "Application relief" means means an application application toto party seeking corporation by a party the corporation seeking relief under under this this chapter. "Assets" means total cash, securities, "Assets" securities, and real less any outstanding property less outstanding liabilities liabilities secured secured by the assets. the project which is "Assisted project" means a project "Assisted is initiated and developed by an entity initiated entity other than than the the corporation, and which is is being provided state state assistance to assistance to lower sales prices or rental rates. assistance may Such assistance may include, but but is is not not necessarily necessarily limited to, interim limited interim and permanent permanent financing, financing, expedited expedited processing of projects, taxtax credits, general general excise tax exemptions, and rental assistance. tax means the "Board" means the board of directors of thethe Hawaii housing finance Hawaii finance and development development corporation corporation established under established under chapter 201H, HRS.

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"Co-applicant" "Co-applicant" means a person who submits an application to application to purchase an affordable affordable unit with the the applicant and who is: applicant (1 Not married to Not to an applicant, isis of the age of majority, unrelated toto the the applicant, and to reside intends to reside in in the the unit; or Related to (2 Related to an applicant by blood, marriage, operation of law, including or operation including foster children and hanai children hanai children, isis of the the age of majority, and wishes to to be on title title of affordable unit. the affordable "Contractor" means a general "Contractor" general engineering engineering general building contractor or general building contractor licensed licensed under chapter 444, HRS. under "Corporation" means "Corporation" means the Hawaii Hawaii housing finance finance development corporation and development corporation established established under under chapter 201H, HRS. "County" includes thethe counties of Kauai, Maui, Hawaii, and the citycity and county of Honolulu, and context requires a different unless the context different meaning, it shall mean thethe county county in in which the the project project is is situated. professional "Design professional" means a professional "Design landscape architect engineer, architect, surveyor, or landscape licensed under licensed under chapter 464, HRS. means the "Develop" or "development" means the planning, financing, acquisition financing, acquisition of real property, demolition demolition of existing structures, clearance existing clearance of real property, alteration, or repairing construction, reconstruction, alteration, repairing of approaches, streets, sidewalks, utilities, and services or other sitesite improvements, or construction, reconstruction, repair, remodeling, extension, furnishing of buildings or other equipment, or furnishing structures or any combination of the the foregoing, of any housing project. also includes any and all It also acquisition undertakings necessary therefor, and the acquisition of any housing, in in whole or in in part. "Domicile" means "Domicile" means the state state where a person has his her true, fixed, or her fixed, and permanent permanent home and toto where intention of returning the person has the intention returning whenever whenever the the person isis absent. A person may have only one domicile.

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"Dwelling" means a structure "Dwelling" means structure designated for residential use. "Dwelling unit" "Dwelling unit" or or "unit" "unit" means means the structure structure and land upon which the structure land structure isis constructed, whether whether fee simple or leasehold on fee leasehold property, developed pursuant to pursuant to chapter 201H, HRS, which is is intended intended for residential purposes. may also It may also mean improved oror unimproved real property which is is developed for pursuant to residential purposes pursuant to the the provisions of chapter 201H, HRS. "Elder" means "Elder" means a person who is is a qualified qualified resident ofof the the State and who has attained attained the age of of sixty-two. "Eligible developer" means "Eligible means an individual, including limited partnership, cooperative, including limited equity equity defined in housing cooperatives (as defined in chapter 421H, firm, nonprofit HRS), firm, nonprofit or or profit profit corporation, limited limited liability company, or public agency which the liability the corporation has certified corporation certified pursuant pursuant to to the provisions section 15-308-24 of section 15-308-24 of this this chapter. "Eligible purchaser" means "Eligible first-time homebuyer means a first-time homebuyer qualified resident who demonstrates need for or qualified assistance in assistance in obtaining obtaining housing, and who meets the the requirements ofof section section 15-308-22 15-308-22 for the project project for application is which an application is submitted. market value" means "Fair market means the unencumbered fair market value of a property that has no State or market or county restrictions attached restrictions attached thereto, as determined by a real estate appraiser licensed estate licensed or or certified certified to to practice inin the State ofof Hawaii Hawaii subject subject to to the requirements of of section 466K-4, HRS. section "First-time homebuyer" means "First-time qualified resident means a qualified not owned any unit who has not unit anywhere for a period of of year prior one year prior to to the date of application application for a lower cost housing unit. cost owner of "Former owner" means a former owner of a dwelling dwelling unit: (1) From whom the From whom the dwelling dwelling unit unit was repurchased repurchased pursuant to pursuant to section section 201H-47, HRS; or or (2 Who has obtained a waiver waiver of repurchase rights from rights from the corporation corporation under under section section 201H-47, HRS.

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"Government assistance program" means "Government assistance means any housing program qualified by the corporation program qualified corporation and administered administered or operated by the State, the corporation, the United States, or any of its its political political subdivisions, agencies, or instrumentalities, corporate or otherwise, which may be used to to effectuate effectuate housing development for qualified development qualified persons inin the State. Government assistance Government assistance program program includes, but but is is not not limited to, the following: limited following: (1) Any program eligible program specified, allowed, or eligible assistance under for assistance under chapter 201H, HRS; (2) Any program eligible program specified, allowed, or eligible assistance under for assistance under laws, rules, or regulations of the regulations the United States Department Department Development and the of Housing and Urban Development the Department of Agriculture; or United States Department (3 Any program regulated by either the program regulated corporation, counties, or thethe United States political subdivisions, or any of their political corporate or agencies, or instrumentalities, corporate otherwise. "Gross household income" meansmeans the the total amount amount of income of household members, from all sources members, from including all income for household before deductions including members eighteen members eighteen years of age and older who are currently residing currently residing in in the household, or who willwill physically reside physically reside in in the the dwelling dwelling unit unit to to be purchased. "Guaranteed loan" "Guaranteed loan" means means a loan loan that is is guaranteed to which a commitment or as to commitment toto guarantee has been made made under the provisions of a federal or state under state law. means those who meet "Homeless" means meet one or more of established by the the four categories of homelessness established Department of Housing and Urban: United States Department Urban,�

follows: Development, as follows: (1) families who lack Individuals and families lack a fixed, fixed, residence regular, and adequate nighttime residence subset for an individual who and includes a subset is exiting is exiting an institution institution where he or she resided resided for ninety days or less and who ninety resided in resided in an emergency shelter or a place

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not meant not meant for human habitation habitation immediately immediately entering that institution; before entering (2) families who will Individuals and families will imminently imminently lose their primary nighttime residence; lose (3) families with Unaccompanied youth and families children and youth who are children are defined defined as under other federal statutes; homeless under statutes; or (4) families who are Individuals and families are fleeing, fleeing, or are attempting are attempting to to flee, flee, domestic violence, dating violence, sexual assault, stalking, dating life-threatening or other dangerous or life-threatening relate to conditions that relate to violence against family member. the individual or a family the member. means an individual; or two or more "Household" means live or intend persons who live intend to to live unit live together as a unit and whose income and resources are are available available to to meet meet the household's need and who may, but the but need not not be, related by blood, marriage, or operation related operation of law, including foster children including children and hanai hanai children children and whose reached the age of majority, or head of household has reached is otherwise legally is legally emancipated. "Household member" means a person who is "Household co­ is a co- applicant or will applicant will reside reside in in the the dwelling dwelling unit. "Household size" "Household size" means the the total number number of household members residing, or that will will be legally legally residing, inin a dwelling dwelling unit. ForFor purposes of calculating household size, a person who is calculating is pregnant pregnant count as two household members. shall count means the Hawaii "HRS" means Hawaii Revised Statutes. means the United States Department "HUD" means Department of Housing and Urban Development. means an addition, renovation, or "Improvement" means replacement to replacement to the the dwelling dwelling unit unit which enhances the the value of the property, and for which labor and capital, are expended. Improvements do not are not include include repairs repairs or maintenance of the property. offering" means "Initial public offering" means the date when the the project is project is authorized authorized for release release to to the the general general public and applications are are made available available for distribution and acceptance. distribution cost housing", in "Lower cost in the the context context of identifying the identifying the persons or families families intended intended to to be

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served by such housing, primarily includes housing for families whose incomes are persons or families are identified identified as forty per one hundred forty per cent cent or less less of the the area median income for each of thethe counties of Hawaii, Maui, Kauai as determined by the Honolulu, and Kauai the United States Department of Department of Housing and Urban Development Development from from time to time, and as adjusted to adjusted by family family size. ForFor the the purpose ofof this this chapter, such persons or families families include persons or families include families within within the the following following income groups: (1) low income" -- those "Very low those earning earning fifty fifty per per cent of the cent the area median income and below; (2) (2) "Low income" -- those "Low those earning earning above fifty fifty per cent per cent up to to eighty eighty per per cent cent of of the the area area median income; (3) earning above 3) "Low-moderate income" -- those earning eighty per eighty per cent cent up to to one hundred twenty perper cent of the cent the area median income; or (4) earning above one "Moderate income" - those earning per cent hundred twenty per cent up toto one hundred forty per forty per cent cent of of the area median income. "Mortgage payment" means "Mortgage means the owner's payment payment on any mortgage which is is necessary for financing financing the the purchase ofof an owner's dwelling dwelling unit. It maymay also also include payments for lease include lease rent, real property taxes, association fees, mortgage insurance, association fees, and any other directly related expenses directly related to to financing financing the the purchase of of the owner's real property or to to maintaining an ownership interest in in the the real property. "Mortgagee" means "Mortgagee" means any bank oror other institution institution authorized by federal or state authorized state law law to to make make loans on dwelling units or the authorized dwelling authorized assignee assignee of of such such bank, or institution. 1,

"Ownen" means "Ownen" means the the owner owner of of a dwelling unit. "Person with a disability" "Pers;on disability" means means a person having '; , 1 a physical or mental physicaJ,,or mental impairment impairment that substantially substantially limits one or more major limits major life record of life activities; a record such an impairment; or is is regarded regarded as having such such an r1 Major life impairment. Major life activities activities include include caring caring for manual tasks, walking, seeing, oneself, performing manual hearing, speaking, breathing, and working.

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specifications" includes construction "Plans and specifications" construction document that plans and specifications and any other document required by the may be required the county county in in the the processing of thethe specifications for the plans and specifications the issuance issuance of permits construction and building of improvements within a for construction project. "Project" or "housing "Project" "housing project" project" means a plan, corporation or an design, or undertaking by the corporation eligible developer for the eligible the development development of dwelling dwelling personal property, units, and includes all real and personal commercial space, lands buildings and improvements, commercial farming and gardening, community facilities for farming facilities acquired or constructed acquired constructed or toto be acquired acquired or tangible or intangible constructed, and all tangible intangible assets assets held or used inin connection with the the housing project, assisted project, or sponsored assisted sponsored project. "Qualified appraiser" "Qualified appraiser" means estate means a real estate licensed or certified appraiser licensed certified to to practice inin the the State of Hawaii State Hawaii subject subject toto the requirements of section section HRS. 466K-4, HRS. "Qualified nonprofit "Qualified nonprofit housing trust" trust" means means a corporation, association, or other duly chartered corporation; chartered organization that is organization is registered registered and in in good standing standing the State; is with the is recognized recognized by the the Internal Internal Revenue charitable or otherwise tax-exempt Service as a charitable tax-exempt organization under organization under section section 501 (c) (3) of the the Internal Internal Revenue Code of 1986, as amended; has the the capacity, resources, and mission to to carry carry out out the the purposes of this chapter; and has been determined by the this the corporation to corporation to operate a homeownership program that: program (1) Provides homeownership opportunities to to first-time homebuyers; and first~time restriction on (2) Imposes an owner-occupancy restriction the homebuyers with a minimum term of ten minimum term ten I fl

years. A "qualified "qualified nonprofit nonprofit housing trust" trust" shall be to have the capacity, resources, and determined to to carry mission to carry out out the the purposes of thethe chapter when is determined, in it is in the the corporation's sole sole it: discretion, that it:

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(1) (1) Demonstrates efficient Demonstrates efficient financial financial capacity capacity and ability and ability to to exercise exercise thethe corporation's corporation's repurchase rights repurchase rights in timely fashion; in aa timely fashion; (2) Demonstrates (2) Demonstrates the the ability ability toto comply comply with with the the requirements set requirements set forth forth in in subchapter subchapter 5,5, infra; and infra; and (3) Agrees (3) Agrees to to comply comply withwith all all applicable applicable requirements set requirements set forth forth in subchapter 55 of in subchapter of this chapter. this chapter. "Qualified resident" "Qualified resident" means means the the same same as as defined defined under section under section 201H-32, 201H-32, HRS. HRS. "Rules" means "Rules" means these these rules. rules. "Sponsored" includes, "Sponsored" includes, but but is is not not limited limited to, to, the the provision of provision of aa loan loan and and exemptions exemptions pursuant pursuant to to section section 201H-38, HRS. 201H-38, HRS. "Sponsored project" "Sponsored project" means means aa housing housing project project benefitting from benefitting from various various programs programs administered administered by by the the corporation including, corporation including, but but not not limited limited to, to, aa loan loan and and exemptions pursuant exemptions pursuant to to section section 201H-38, 201H-38, HRS. HRS. "State" means "State" means the the State State of of Hawaii. Hawaii. "Subsidies" means "Subsidies" means the the difference difference between between all all costs expended costs expended byby the the corporation, corporation, less less any any recoveries recoveries by the by the corporation. corporation. It It also also includes includes unrecovered unrecovered development, land, development, land, financing, financing, and and carrying carrying costs. costs. "Sustainable affordable "Sustainable affordable leases" leases" means means the the same same as as defined in defined in section section 516-1, 516-1, HRS. HRS. "Value" means "Value" means the the value of aa property value of property asas determined by determined by aa qualified qualified appraiser. appraiser. [Eff 1/15/22; [Eff 1/15/22; amam and and comp comp DEC 1 0 2022 � (Auth: (Auth: HRS Hxs §§201H-4, 201H-40, §§201H-4, 201H-40, 201H-41, 201H-41, 201H-42, 201H-42, 201H-45, 201H-45, 201H-47, 201H-47, 201H-51) (Imp: 201H-51) (Imp: HRS HRS §§201H-1, §§201H-1, 201H-4, 201H-4, 201H-8, 201H-8, 201H-40, 201H-40, 201H-41, 201H-42, 201H-41, 201H-42, 201H-44, 201H-44, ------- II 201H-45, 201H-45, 201H-47, 201H-47, 201H-51) 201H-51) l -..- - 1I References to other chapters. §15-308-3 Referrnces (a) To (a) To the extent the extent appropriat~ appropriate for for the the implementation implementation ofof chapter 201H, chapter 201H, HRS, HRS, references references ·in in documents, documents, forms, forms, and and similar instruments similar instruments of of the the corporation corporation to to chapters chapters 201E, 201G, 201E, 201G, 356, 356, 359, 359, and and 359G, 359G, HRS, HRS, shall shall be be treated treated as references as references to to chapter chapter 201H, 201H, HRS. HRS. (b) To (b) To the the extent extent appropriate appropriate for for the the implementation of implementation of this this chapter, chapter, references references in in documents, forms, documents, forms, and and similar similar instruments instruments ofof the the

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corporation to to chapter 15-307 15-307 shall be treated treated as to this references to this chapter. [Eff [Eff 1/15/22; am am and comp DEC 1 0 2022 ]] (Auth: HRS §201H-4) (Imp: HRS §201H-4)

§15-308-4 Fees. corporation shall have the The corporation to charge reasonable fees right to fees for administrative administrative incurred in expenses incurred in processing required required real estate estate under this documents under this chapter, as follows. These fees fees shall be nonrefundable.

PURPOSE AMOUNT CHARGED A. A. BUYBACK AND SAE PROGRAMS BUYBACK 1. 1. Consent to Mortgage/Subordination Consent to of SAE of Analysis of Consent to Mortgage, Consent to Subordination of SAE, or both $250 to Mortgage Document, Consent to Consent Subordination Subordination of SAE Document, or both (including, as applicable, to Qualified Resident) Resale to Resident) $250 2. Releases Analysis of Program Program Compliance for Release of Restriction Of Buyback Restriction $250 Restriction Of Buyback Restriction Release of Document Document $250 SAE Program/ Release of SAE Program/ Agreement Agreement Document Document $250 Document Release of Mortgage Document $250 3. Waivers Amendment to Amendment to Deed for Temporary Owner Occupancy �I Waiver of Owner Waiver Requirement and Extension of Owner Requirement Owner Occupancy and Buyback Requirements, Temporary Waiver Waiver of Owner Owner Occupancy Requirement Requirement and Defer Payment Under Defer Payment Under SAE Agreement, or both SAE $250 Analysis of Application for Temporary Waiver Owner Occupancy Waiver of Owner Restriction Restriction $250

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PURPOSE AMOUNT CHARGED AMOUNT CHARGED Waiver and Acknowledgement Waiver Acknowledgement of Right Document Repurchase Right Document $250 4. Affidavits Affidavits Affidavit as to Buyer's Affidavit to Qualified Resident Resident $250 Affidavit of Owner Transferee's Affidavit Owner SAE Agreement Occupancy and SAE Agreement Requirements $250 5. Notices 5. Notices Conditional Analysis and Notice of Conditional Approval After-the-Fact Approval After-the-Fact $250 Approval and Final Notice of Approval Final Recording $150 Default - SAE Notice of Default □ Program SAE Program $250 Default - Buyback Program Notice of Default Program Program SAE Program or SAE $250 Notice of Non-Compliance with SAE SAE Program Program $250 SAE Demand Notice of SAE $250 Transfers 6. Transfers 6. Eligibility for Owner's Analysis of Eligibility Title Transfer, Permitted Transfer, Title or Authorized Resale to to Qualified Buyer Resident Buyer Resident $250 Program Compliance for Analysis of Program Title Transfer Title into Owner's Transfer into Trust Revocable Trust $250 Calculation of SAESAE Payoff Payoff (Sale, Rental of Property) Transfer, or Rental Property) $250 Payment and Acknowledgement Defer Payment Defer Acknowledgement of SAE Agreement SAE Agreement Document Document $250 Program Compliance for Analysis of Program Title Additional Transfer of Title Additional Documents $150 Memoranda to 7. Memoranda 7. to Deed Program Memorandum of Buyback Program Memorandum Document Document $250 SAE Agreement Memorandum of SAE Memorandum Agreement Document Document $250 B. DEFERRED B. SALES PRICE DEFERRED. SALES PRICE (OR LAND LAND VALUE) PROGRAM VALUE) PROGRAM

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PURPOSE AMOUNT CHARGED of Payoff Analysis of Analysis Payoff of of Deferred Deferred Sales Sales or Land Price or Price Land Value Value $250 $250 of Non-Compliance Notice of Notice Non-Compliance with with Deferred Sales Deferred Sales Price Price or or Land Land Value Value Program Program $250 $250 of Deferred Release of Release Deferred Sales Sales Price Price oror Land Value Land Value Document Document $250 $250 C. C. LEASEHOLD PROGRAM PROGRAM ADMINISTRATION ADMINISTRATION of Lease Amendment of Amendment Lease Document Document $250 $250 and Preparation Analysis and Analysis Preparation ofof Conveyance Tax Conveyance Tax Certificate Certificate forfor Amendment of Amendment of Lease Lease $150 $150 of Program Analysis of Analysis Program Compliance Compliance forfor Leased Fee Leased Fee or or Fee Simple Interest Fee Simple Interest Purchase Agreement Purchase Agreement $250 $250 Analysis of Analysis Program Compliance of Program Compliance forfor Lessee Transfer Lessee Transfer of of Title Title $250 $250 Assignment of Assignment of Lease Lease Document Document $250 $250 to (Leasehold) Consent to Consent (Leasehold) Mortgage Mortgage Analysis Analysis $250 $250 Consent to Consent Mortgage (Leasehold) Mortgage to (Leasehold) Document Document $250 $250 Assignment (Transfer) to Assignment Consent to Consent (Transfer) of of Lease Document Lease Document $250 $250 Conversion from Conversion from Leasehold Leasehold to Fee to Fee Simple - New Simple .a New Deed Deed $250 $250 Conveyance Tax Conveyance Tax Certificate for Certificate for of Lease Amendment of Amendment Lease Document Document $150 $150 Lease Rent Lease Delinquency Fee Rent Delinquency Fee (per (per statement) statement) $50 $50 Term Extension Lease Term Lease Extension Analysis Analysis $250 $250 New Quitclaim New Quitclaim Deed (for Lease-to-Fee Deed (for Lease-to-Fee Conversion) Conversion) $250 $250 of Lease Notice of Notice Default (per Lease Default (per notice) notice) $100 $100 of Title Transfer of Transfer Fee Title Fee $250 $250 D. RENT TO TO OWN PROGRAM PROGRAM Program Compliance of Program Analysis of Analysis Compliance as as requested by requested by participant participant $250 $250

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PURPOSE AMOUNT CHARGED AMOUNT CHARGED E. HOUSE PLANS Actual cost Actual cost of of reproduction reproduction [ Eff 1/15 /22; am comp and comp JEC 1 )0 2)2 (Auth: HRS [Eff 1/15/22; am and 202?2 (Au th : HRS SS201H-4, 201H-16, §§201H-4, 201H-16, 201H-100) 201H-100) (Imp: (Imp: HR~HRS §§201H-4, SS201H-4, 201H-16, 201H-100) 201H-16, 201H-100)

SUBCHAPTER 22 SUBCHAPTER

ELIGIBILITY AND ELIGIBILITY AND PREFERENCES PREFERENCES TO TO PURCHASE PURCHASE AFFORDABLE AFFORDABLE DWELLING UNITS DWELLING UNITS

§15-308-21 Purpose. This subchapter This subchapter governs governs the the eligibility for purchase of and preferences for the eligibility for purchase of and preferences for the sale of sale of dwelling dwelling units units and and vacant vacant house house lots lots developed developed under chapter under chapter 15-307. 15-307. [Eff [Eff 1/15/22; 1/15/22; am am and and comp comp 0 2022 ]) (Auth DEC 1 Q (Auth: HRS §§201H-4, HRS §§201 201H- 47) 201H-47) (Imp: HRS (Imp: HRS §§201H-45, §§201H-45, 201H-47) 201H-47)

Eligibility. (a) §15-308-22 Eligibility. (a) Priority Priority for for affordable units affordable units marketed marketed and and sold sold under under this this chapter chapter shall be shall be for for first-time first-time homebuyers homebuyers who who require require the the assistance of assistance of programs programs under under chapter chapter 201H, 201H, HRS, HRS, toto purchase their purchase their home. home. A first-time homebuyer A first-time homebuyer who who intends to intends purchase aa unit to purchase unit developed developed or or sold sold under under this chapter this chapter with with cash cash does does not not require require the the assistance assistance of programs of programs under under chapter chapter 201H, 201H, HRS, HRS, to to become become aa homeowner. homeowner. (b) An (b) An applicant applicant shall shall be be eligible eligible to to purchase purchase aa dwelling unit dwelling unit developed developed under under this this chapter chapter if if the the applicant meets applicant meets all all of of the the following following requirements: requirements: (1) Is (1) Is aa first-time first-time homebuyer homebuyer or or qualified qualified resident who resident who is is domiciled domiciled in in the the State State and and meets other meets other qualifications qualifications set set forth forth under under section 201H-32, section 201H-32, HRS; HRS; Does not (2) Does (2) not have have aa household household income income exceeding exceeding the corporation-established the corporation-established project project income income limits, or limits, or one one hundred hundred forty forty per per cent cent ofof the the

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area median income as determined by HUD, as adjusted by family adjusted family size, size, whichever whichever is is lower; (3 Has household assets for initial deposit deposit and down payment. Gift funds Gift funds to to assist in in the the payment for purchase of the down payment the dwelling dwelling unit shall not unit not exceed thirty-five thirty-five per per cent cent the purchase price and must of the must be received received from a relative from relative as defined defined according according toto Fannie Mae oror Freddie Mac Mac guidelines, as may be amended, inin United States currency; and 4) Has not (4) not previously received received assistance assistance under under program designed and a homeownership program under this implemented under this chapter by the the corporation or corporation or any of the the counties in in the the State. the corporation However, the corporation may on an allow a person who individual basis, allow previously purchased a dwelling dwelling sponsored or assisted by the assisted the corporation corporation or any of thethe counties toto reapply, provided that (A) the county, or a The corporation, the qualified nonprofit qualified nonprofit housing trust repurchased the repurchased the dwelling dwelling unit; or (B) applicant is The applicant is still living living in in the the subject to unit subject to section section 201H-47, HRS; and there has been a significant increase there increase in in household size. applicant may become eligible An applicant eligible again again if the the sale of sale of such such person's first dwelling dwelling was caused by hardship such as family extreme hardship family death, divorce, loss of employment, or of or a disability, and the the dwelling dwelling was repurchased by the repurchased the corporation corporation or the the county. Provided further that in in the the case of divorce, retains ownership where one spouse retains ownership of of the the dwelling dwelling the other spouse may become eligible unit, the eligible one ,year year the final divorce after the divorce decree decree to to reapply reapply for a dwelling unit dwelling unit sponsored oror assisted assisted by the the corporation corporation or the or the county. An applicant applicant may become eligible eligible again again the applicant if the applicant isis still living living in in the the previously restricted unit restricted unit subject toto section section 201H-47, HRS, applies for a newnew affordable affordable unit, and sells sells the the currently owned dwelling unit currently unit to to a qualified resident

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meeting corporation corporation income requirements at a restricted price approved by the corporation. restricted [Eff 1/15/22; am [Eff am and comp DEC 1 0O2022 1] (Auth: HRS SS S§201H-1, §§201H-4, 201H-151, 201H-33) (Imp: HRS §§201H-1, 201H-162) 201H-151, 201H-162)

Eligibility for current §15-308-23 Eligibility current owners in in corporation sponsored projects. corporation current owner (a) A current owner unit sponsored by the of a multi-family dwelling unit the corporation may apply corporation apply for the purchase of a larger unit in dwelling unit in a corporation corporation sponsored project project if: if: (1) The applicant's current current household size size has increased and exceeds thethe permissible size for the household size the current unit unit as prevailing county building or determined by prevailing housing codes; or inin the absence thereof, the housing code of the the the city city and county county of Honolulu; and (2) resided in The applicant has resided in the the current current unit for at least one year. dwelling unit (b) size shall be determined by the Household size the number of individuals on title number title and their dependents. (c) applicant shall sell the applicant's The applicant unit to current multi-family dwelling unit to the corporation corporation to or upon the prior to the closing closing of the the sale sale of the larger unit under dwelling unit under the the provisions of section section 201H-47, HRS. (d) Except for the Except the applicant's current current the applicant shall be a qualified residence, the qualified resident resident forth under as set forth under section section 201H-32, HRS. [Eff 1/15/22; comp [Eff DEC 10 2022 2022]1 (Auth: HRS §§201H- S§§201H- 201H-33) (Imp: HRS §§201H-l, 4, 201H-151, 201H-33) SS201H-1, 201H-1Sl, 201H-151, 201H-162) 201H-162)

Eligibility for former owners in §15-308-24 Eligibility in corporation sponsored projects. A former owner corporation owner of a cost hou~ing lower cost housing unit unit may apply apply to to purchase another unit under lower cost housing unit under the following following conditions: (1) the former owner If the owner is is released released from from title title to apply and wishes to apply again, the the former owner owner show that no profit shall show profit was made on the

308-19

affordable unit, and that sale of the first affordable unit was sold the unit sold to qualified resident to a qualified meeting corporation corporation income and asset restricted price requirements, and at a restricted approved by the corporation. (2) In the In the event event the corporation corporation does not not unit offered, the repurchase the unit the owner owner shall unit at a restricted sell the unit restricted price. The unit shall remain affordable unit affordable and sold sold to to a qualified resident whose income does not qualified not forty per exceed one hundred forty per cent cent of the the area median income. [Eff 1/15/22; am [Eff am and comp DEC 1 } 2022 ) (Auth: HRS §§201H-4, $S201H-4, 201H-47) (Imp: S201H-1) HRS §201H-1)

$15-308-25 §15-308-25 sale units. Occupancy guidelines for sale (a) following occupancy The following occupancy guidelines shall be used sale of units: for the sale (1) To determine the maximum affordable sales maximum affordable price; and ( 2 application period, to During the initial application to selection order list. establish a property selection establish list.

Unit Dwelling Unit Preferred Size Household Size 0 Bedroom Bedroom 1 person 1 Bedroom Bedroom 2 persons 2 Bedroom Bedroom 3 persons 3 Bedroom Bedroom 4 persons 4 Bedroom Bedroom 5 persons

(b) The maximum size is maximum household size is determined by prevailing county building or housing codes, or in in the city and county absence thereof, the city county of Honolulu housing code. [Eff 1/15/22; comp [Eff 102022 DEC 1 () 2022 1] (Auth: SS201H-4, 201H-33, 201H-41) HRS §§201H-4, 201H-41) (Imp: HRS SS§201H-111, 201H-33, 201H-38, 201H-41) §§201H-111, 201H-41)

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Counseling. §15-308-26 Counseling. (a) corporation The corporation shall require shall require developers to to provide homeownership counseling and training counseling training to to all qualified qualified applicants. counseling and training The counseling training program program shall be conducted by a HUD-approved housing counseling counseling agency. (b) counseling and training The purpose of the counseling training program to help program shall be to help people deal deal with economic problems, to to understand responsibilities understand and accept responsibilities in homeownership, to inherent in to prepare applicants for homeownership tasks, and toto develop resources that may may homeowner and the community. assist the homeowner [Eff 1/15/22; comp [Eff DEC 1 )0 2022 1] (Auth: HRS §§201H- SS201H- 4, 201H-16) (Imp: 201H-16) HRS §§201H-8, 201H-16)

§15-308-27 Preference inin dwelling unit unit sales. (a) Unless otherwise provided in in this this chapter, inin the sale of dwelling units by the corporation, the sale eligible developer, may corporation, or an eligible may give preference to to applicants on the basis of overall need to applicants who: and to (1) dwelling unit (1) Are former owners of a dwelling unit repurchased by the corporation corporation due toto a construction or soil defect; provided that construction owner has not the former owner not purchased another dwelling unit dwelling unit or land land pursuant pursuant to to section section 15-308-148; (2) Meet the occupancy guidelines set forth Meet forth in in section 15-308-25; provided that for section multiple income level projects with multiple groupings, preference shall alsoalso be based lowest income group and greater upon the lowest household size; For single-family detached dwelling unit (3) For unit projects, proj~cts, applicants having legal excluding the applicants' dependents, excluding i } � t 11,,

spouses, as defined inin the applicable regulations of the Internal Revenue Service and as shown on the applicants' or co- co­ state income tax applicants' state tax returns, divorce decrees having sole or joint custody, or other documents which are are to to be submitted upon the request of the

308-21

corporation. corporation. If preference If preference was was given given due due toto of aa child birth of birth child or or pregnancy pregnancy after after the the tax tax return year, return year, verification verification ofof newborn newborn children shall children shall be be made made at at the the time time of of application, lot application, lot selection selection and and purchase; purchase; (4) Have, (4) Have, as as homeowners, homeowners, been displaced from been displaced from their homes their homes because because ofof governmental governmental action; action; (5) For (5) For income income preferences preferences only, only, income income preference shall preference shall be be based based on on household household size size and annual and annual gross gross household household income income as as established by established by the the cor-poration corporation using using amounts amounts determined by determined by HUD. HUD. All' All income income for for household household members eighteen members eighteen years years of of age age and and older older who who are currently are currently residing residing with with the the household household and will and will physically physically reside reside in in the the dwelling dwelling unit to unit to be be purchased purchased shall shall be be added added toto the the gross household gross household income income to to determine determine thethe income preference. income preference. The The corporation corporation shall shall determine the determine the income income preference preference for for each each project; project; (6) Are (6) Are currently currently residing residing inin public public housing housing or or have relocated have relocated because because ofof income income disqualifications from disqualifications from public public housing; housing; (7) For (7) For multi-family multi-family projects projects only, only, are are persons persons with disabilities with disabilities oror whose whose household household members members are persons are persons with with disabilities; disabilities; oror (8) Have (8) Have larger larger household sizes than household sizes than other other applicants; provided applicants; provided that that the the household household size size does not does not exceed exceed the the applicable applicable county county occupancy standards. occupancy standards. (b) Not (b) Not more more than than twenty twenty per per cent cent of of all all affordable dwelling affordable dwelling units in aa specific units in specific project, project, as as determined by determined by the the corporation, corporation, shall shall be be for for applicants applicants preference as with aa preference with as ~rpvided provided inin paragraph paragraph (b) (b)(1), (1), (4),(6), (4), and (7) (6), and (7) howei~r, however, the the corporation corporation may may establish aa limit establish limit on on the the number number ofof units units for for which which preference is preference is provided provided on project-by-project basis. on aa project-by-project basis. (c) Other (c) Other preferences preferences may may be be determined determined byby the the for aa specific corporation for corporation specific project. project. 1/15/22; am [Eff 1/15/22; [Eff am and and comp comp (Auth: HRS DEC 1 0 2022 ] (Auth: HRS §201H-4) (Imp: §201H-4) (Imp: HRS §§201H-31, 201H-33, 201H-45) HRS §§201H-31, 201H-33, 201H-45)

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§15-308-28 Information and verification. (a) corporation shall require The corporation require applicants toto provide information relating information relating to to household income, household status changes prior to size, financial condition, and status to the close the close of the the sale. (b) corporation may require The corporation require applicants applicants and program program participants toto provide documentation to to verify information verify information submitted toto the corporation, including but including but not not limited limited to: (1) Hawaii state Hawaii state income tax tax return; (2) Federal income tax Federal tax return; return; (3) Certification of pregnancy; Certification (4) length of residency; and Verification of length (5) Other documents as required Other required by the the corporation. (c) applicant found An applicant found to to have willfully willfully submitted submitted false false information, made misstatements, or important information withheld important information shall be deemed to to be ineligible for the project ineligible project and disqualified disqualified from from future corporation-assisted future corporation-assisted projects, provided that corporation shall not the corporation not waive its its right to to pursue any other recourse provided by law. (d) corporation may establish The corporation establish an expiration expiration received to date for applications received to purchase a dwelling dwelling project-by-project basis. unit on a project-by-project unit [Eff 1/15/22; am [Eff am and comp DEC 1 0 2022 (Auth: HRS §201H-4) (Imp: HRS §201H-33)

SUBCHAPTER 3 SUBCHAPTER

MARKETING MARKETING AND SALE SALE OF AFFORDABLE DWELLING DWELLING UNITS

§15-308-41 Marketing and sale of of dwelling units. (a) developed under Affordable units develDped under chapter 201H, sold to HRS, shall be marketed and sold to eligible eligible purchasers forth in as set forth in this this subchapter. substantially completed (b) Units completed or substantially sold under shall be sold under the provisions of sections 201H-45 through 201H-50, HRS, including through including repurchase repurchase restrictions and the shared restrictions shared appreciation appreciation equity equity

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�I y

program restrictions as set forth program restrictions forth in in subchapters 7 and this chapter, as applicable. 8 of this c) (c) sold in Units shall be sold in accordance with all applicable state applicable state and federal fair fair housing housing laws. (d) Applications may may be accepted accepted from from an applicant for more than applicant than one project project sponsored sponsored or assisted by the assisted the corporation, provided that upon contract for any affordable execution of a binding contract affordable dwelling unit, the dwelling the applicant applicant must must withdraw withdraw all other applications. [Eff 1/15/22; am [Eff am and comp DEC 1 0Q 2022 1] (Auth: HRS §201H-4) -4 ) ( I mp: 24 Imp: 24 Part 108; 24 CFR Part CFR Part Part 200, Subpart Subpart M; M; HRS §§201H- §S201H- 45, 201H-47, 515-3; HRS Chapter 514B)514B)

§15-308-42 Announcement, publication. For §15-308-42 For a thirty calendar days, the period of thirty the developer shall publish or cause to to be published in in the the classified classified section of at least one newspaper published daily section daily in in the State the State and having having a general general circulation circulation inin the the county in county in which the the project project isis located, at least twice twice a week, or once a week if paired with another form form of designated project notice such as a designated public notice project website or announcement containing informational meeting, an announcement containing at minimum a summary of the minimum the following following information: (1) location of the The location the project; 2) A fair and reasonable (2) reasonable estimate of: number of affordable (A The total number affordable units to to included in be included in the the project; (B) range of the The price range the affordable affordable units; (C) size of the The approximate size the affordable affordable units; and (D) designation whether A designation whether the the affordable affordable are being sold units are sold in in fee fee simple or leasehold; statement that one hundred per 3) A statement (3) per cent cent of the the affordable units are affordable are being sold sold in in fee fee simple or leasehold; simple definition of "" 4) The definition ( 4) ""first-time first-time homebuyer"" ""qualified resident"" and ""qualified resident"" as contained contained in in section 201H-32, HRS; section

308-24

(5) (5) The name The name and and address address ofof the the real real estate estate broker designated broker designated byby the the developer, developer, whom whom eligible purchasers eligible purchasers maymay contact contact toto be be placed placed on aa reservation on reservation list, list, and and to to obtain obtain further further information on information on the the project; project; and and (6 (6 A statement that A statement that the the affordable affordable units units will will be available be available to to any any eligible eligible purchaser purchaser without regard without regard toto race, race, sex, sex, color, color, religion, marital religion, marital status, status, familial familial status, status, national origin, national origin, person with aa disability person with disability status, age, status, age, or or HIV HIV (human (human immunodeficiency immunodeficiency virus) infection. virus) infection. The publication The publication shall shall also also include include the the United United States Department States Department of of Housing Housing and and Urban Urban Development's Development's equal housing equal housing opportunity opportunity slo~an sl?gen or or logo. logo. [Eff 1/15/22; [Eff 1/15/22; am am and and comp comp DEC 1 ) Dt.C 202Z 1] (Auth: 02022 (Auth: HRS HRS §201H-4) (Imp: §201H-4) (Imp: 2424 CFR CFR Part Part 108; 108; 24 24 CFR CFR Part Part 200, 200, Subpart M; Subpart M; HRS HRS §§201H-1, §§201H-1, 201H-45, 201H-45, 515-3) 515-3)

Application intake list, §15-308-43 Application requirements. (a) During (a) During the the initial initial offering offering period period of thirty of thirty calendar calendar days, days, the the developer's developer's designated designated broker shall broker shall compile compile an an application application intake intake list list consisting of consisting of the the names, names, addresses, addresses, andand phone phone numbers numbers of all of all individuals individuals stating desire to stating aa desire to purchase purchase anan affordable unit affordable unit contained contained inin the the announced announced project. project. The application (b) The (b) application intake intake list list shall shall be be compiled in compiled in the the order order inin which which applicants applicants have have submitted to submitted to the the agent agent anan acknowledgement acknowledgement thatthat the the applicant meets applicant meets the the definition definition ofof "first-time "first-time homebuyer" or homebuyer" or "qualified "qualified resident" resident" andand intends intends toto become aa purchaser become purchaser ofof an an affordable affordable unit. unit. (c) Any (c) Any individual individual whowho makes makes any any false false statement statement in the in the acknowledgement acknowledgement is is subject subject to to criminal criminal charges charges and civil and civil action action under under the the laws laws of of this this State. State. Any Any individual found individual found to to have have willfully willfully submitted submitted false false information, made information, made misstatements, misstatements, or or withheld withheld important important information shall be deemed to be ineligible for the information shall be deemed to be ineligible for the project and project and disqualified disqualified from from future future corporation- corporation­ assisted projects, assisted projects, provided provided that that the the corporation corporation shall shall not waive not waive its its right right to to pursue pursue any any other other recourse recourse provided by provided by law. law.

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(d) The (d) The developer developer shall shall submit submit the the application application intake list intake list and and the the applicants' applicants' acknowledgement acknowledgement to to the the corporation within corporation within ten ten days days of of the the expiration expiration of of the the initial thirty initial thirty dayday offering offering period. The corporation period. The corporation will provide will provide thethe developer developer with with an an eligible eligible purchaser purchaser list, which list, which shall shall list list the the applicants applicants approved approved asas "first-time homebuyers" "first-time homebuyers" or or "qualified "qualified residents." residents." The The developer shall developer shall offer offer affordable affordable units units to to the the individuals on individuals on the the eligible eligible purchaser purchaser list list as as described in described in section section 15-308-44. 15-308-44. (e) Thirty (e) Thirty days days before before the the close close of of project project sales, the sales, the developer developer shall shall submit submit to to the the corporation corporation aa summary of summary of which which individuals individuals onon the the eligible eligible purchaser purchaser list purchased list purchased an an affordable affordable unit, unit, which which did did not not purchase an purchase an affordable affordable unit, unit, and and the the applicant's applicant's reason for reason for not purchasing aa unit. not purchasing unit. From From time time to to time, time, the corporation the corporation may may request request an an updated updated summary summary from from the dev the devi9p er. [Eff O_I)er. [Eff 1/15/22; 1/15/22; am am and and comp comp t: 1 ) JEC 0 2022 1] (Auth: (Auth: HRS HRS §201H-4) $201H-4) (Imp: (Imp: HRS HRS SS201H-1, 201H-45) §§201H-1, 201H-45)

S15-308-44 Sale of §15-308-44 of residential residential units. (a) The (a) The developer shall developer shall first first offer offer affordable affordable units units to to "first-time homebuyers"" "first-time homebuyers"" onon the the eligible eligible purchaser purchaser list by list by one one of of the the following following means: means: (1) In (1) In the the order order in in which which their their names names appear appear onon the list; the list; (2) By (2) the drawing By the drawing of of lots; lots; or or (3) By (3) By any any other other reasonable reasonable and and fair fair method method asas determined by determined by the the developer developer and and approved approved byby the corporation; the corporation; and then and then to to the the remaining remaining ""qualified ""qualified residents" residents" on on the eligible the eligible purchaser purchaser list list by by the the same same means. means. (b) The (b) The developer developer shall shall also also be be required required toto comply with comply with the the following: following: Prior to (1) Prior (1) to the the sale sale of of any any of of the the units, units, the the developer shall developer shall submit submit to to the the corporation, corporation, for its for its review review and and approval, approval, copies copies ofof the the sales contracts sales contracts and and deeds deeds which which reference reference the qualified the qualified resident resident preference; preference; Prior to (2) Prior (2) to the the sale sale of of any any of of the the units, units, the the developer shall developer shall submit submit to to the the corporation corporation aa

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� � ��

copy ofof the the covenants, conditions, and restrictions, if any, for review restrictions, review and approval; (3) submit to The developer shall submit to the the corporation a list of corporation of all of the the purchasers by lot number, name, date of sales contract, date ofof recordation, tax tax map key, and property address. this list, On this list, the the asterisk developer shall designate with an asterisk those purchasers who are (*) those are qualified qualified residents; and (4) developer shall comply with all The developer state and federal fair housing applicable state laws. [Eff 1/15/22; amam and comp DEC ) 2022 1 (Auth: HRS §201H-4) 10 ] $201H-4) (Imp: CFR 108; 24 CFR 24 CFR CFR 200, Subpart Subpart M; M; §§201H-l, 201H-45, 515-3; HRS Chapter HRS §§201H-1, Chapter 514B)

SUBCHAPTER 4 SUBCHAPTER

CORPORATION-OWNED DWELLING RENTAL OF CORPORATION-OWNED DWELLING UNITS

§15-308-61 Eligibility. (a) applicant is An applicant is eligible to eligible dwelling unit to rent a dwelling unit owned by the the corporation if the corporation the applicant meets all ofof the the following requirements: following (1) Is a qualified Is qualified resident who isis domiciled in in the State the State and meets other qualifications qualifications set forth in forth in section section 201H-32, HRS; (2) not have a household income of more Does not than one hundred forty than forty per per cent cent of of the the area area determined by HUD from median income as determined from time to time and as adjusted to adjusted by family family size; (3) Whose household assets do notnot exceed one thirty-five per hundred thirty-five per cent cent of of the the maximum maximum qualifying household income in qualifying in (2) above. Qualified retirement accounts shall not not count toward the count the asset limit; (4) not have an outstanding Does not outstanding debt debt owed toto the corporation; and the

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3 493

(5 not have a record Does not record or history history of conduct conduct or behavior, including including past past rent payment payment detrimental delinquencies, which may prove detrimental to other tenants or the to the corporation. (b) rented in Units shall be rented in accordance accordance with all state and federal fair housing applicable state housing laws. [Eff 1/15/22; am [Eff am and comp DEC 11 0C 2022 ]] (Auth: HRS §201H-4) (Imp: 24 CFR Part Part 108; 24 CFR PartPart 200, Subpart M; HRS §§201H-9, Subpart SS201H-9, 201H-31, 201H-33, 201H-45, 515-3) 515-3)

§15-308-62 Occupancy guidelines for rental §15-308-62 rental units. (a) following occupancy guidelines The following guidelines may be the number used for rental units when the number of applicants the number exceeds the number and types of units available:

Unit Dwelling Unit Preferred Size Household Size

0 Bedroom Bedroom 1 person 1 Bedroom Bedroom 2 persons 2 Bedroom Bedroom 3 persons 3 Bedroom Bedroom 4 persons 4 Bedroom Bedroom 5 persons

(b) maximum household size The maximum size is is based on health prevailing county housing, zoning, building, health fire codes, or in and fire in the the absence thereof, thereof, the the housing housing the city code of the city and county county of Honolulu. [Eff 1/15/22; comp [Eff DEC 1 0C2022 �] (Auth: HRS SS201H-4, 201H-33) (Imp: HRS §§201H-31, §§201H-4, SS201H-31, 201H-33)

rental of §15-308-63 Preference for the rental of dwelling units. Unless otherwise provided in in this this chapter, admission to preference for admission to the the rental program program under under this section this section shall be given given to to qualified qualified applicants who: (1) "displaced" by governmental Are "displaced" governmental action action as defined by section defined section 111-2, HRS;

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(2) Qualify as Qualify as "elders" "elders" for for projects projects which which are are specifically designed specifically designed for for elders; elders; (3) (3) Qualify as Qualify as persons persons with with disabilities; disabilities; (4) (4) Are persons Are persons or or families families who who are are transitioning from transitioning from homeless homeless shelters, shelters, provided that provided that certification certification by by appropriate appropriate service providers service providers or or shelter shelter operators operators shall shall be required; be required; or or (5) (5) Have an Have an urgent urgent need need for for housing housing asas determined by determined by the the administrator. administrator. [Eff 1/15/22; [Eff 1/15/22; am am and and comp comp DE C 1] 0() 70?? 202? (Auth: HRS (Auth: HRS §201H-4) §201H-4) (Imp: (Imp: HRS HRS §201H-lll) §201H-111)

§15-308-64 Information §15-308-64 Information andand verification. verification. (a) (a) The corporation The corporation may may require require applicants applicants and and program program participants to participants to provide provide information information relating relating to to their their household's income, household's income, composition, composition, financial financial condition, condition, and status and status changes, changes, priorprior to to admission admission to to the the program program and at and at any any other other timetime as as determined determined by by the the corporation. corporation. (b) The (b) The corporation corporation maymay require require applicants applicants andand program participants to program ·pa.rticipants to provide documentation to to verify information verify information submitted submitted toto the the corporation, corporation, including but including but notnot limited limited to: to: (1) Verification (1) Verification of of deposit; deposit; (2) Verification (2) Verification of of employment; employment; and and (3) Credit (3) Credit bureau bureau report report oror references. references. (c) An (c) An applicant applicant or or program program participant participant found found to to have willfully have willfully submitted submitted false false information, information, made made misstatements, or or withheld withheld important important information information shall shall be disqualified be disqualified from from participation participation in in the the rental rental program, and program, and the the corporation corporation reserves reserves the the right right to to pursue any pursue other recourse any, other recourse provided provided byby law. law. (d) The (d) corporation may The corporation may establish establish anan expiration expiration ': l1 date for date for applications applications received received toto rent rent a dwelling unit unit 1 1 ,,

on aa project-by-project on project-by-project basis. basis. [Eff[Eff 1/15/22; 1/15/22; am am ~nd and comp comp DE C }1 )Q 2022 I] (Auth (Auth:: HRS §201H-4) HRS $201H-4) (Imp: HRS §201H-33) §201H-33)

§15-308-65 Rent §15-308-65 Rent determination. The monthly determination. The monthly rent rent shall not shall not exceed exceed the the affordable affordable rent rent guidelines guidelines for for

308-29

households at one hundred forty forty per cent cent of areaarea median income ncome as calculated culated by thethe corpo ra t on b ased corporation on thethe area median income e s tablishedished by HUDHUD and adjusted usted from from time ime to to time. ime . [ Ef Eff 1 / 1 5 22 15/22; comp DEC 1 0 2022 ] ( Auth:: HRS § 2 0 1H-4) H- 4 ) (Imp:: HRS § § 2 01H-33, 2 0 1H-45) - )

§15 - 308-66 0 6 6 Rental Rental agreement agreement.. (a A revocablee rmi t as provided by the p ermit the corpo ration sha corporation l cons t shall i tute constitute agreement for unitss under this the rental agreement this rental program am and sha l s et forth shall forth the the names of the authorized zed occupants, monthly rent amount amount, condit ons conditions of occupancy, and obl i ga i ons of the obligations the part e . parties. (b The revocable permit permit sha l be executed by shall theh e re spons sponsibleible members of the h e tenant household and the t rator . administrator. the admini s (c Amendments to to the the revocable permi permitt sha l be shall in wri in ing and executed by the writing the part e s involved parties nvolved and attached to attached to the the revocable permi permit.t. [ Eff ff 1 / 1 5 15/22;2 comp DEC 1 0 2022 ] ( Auth:: HRS §2 01H- 1H- 4 (Imp: Imp : HRS §2 0 1 H 33 ) lH-33)

§15-308-67 Program §15-308-67 Program adminis Except as tration . Except administration. o therwi therwise provided by l a w or rule aw rule,, the h e rental program program for dwe l oped under thiss chapt l ing unitss developed dwelling chapter s ha halll be admini s t re inn accordance with chapter 5 21, HRS, administered the residential the ident i ord-tenant code.. landlord-tenant [ Eff ff 1 / 1 5 15/22; 2 comp DEC } ) 2I22 1 ( Auth:: HRS $ 2 0 1021J2Z 1 H- §201H- Imp : HRS §2 0 l H- 4 (Imp: 33 H-33 SUBCHAPTER 5 SUBCHAPTER

DWELLING UNITS REPURCHASE OF DWELLING i �

SUBJECT TO RESTRICTIONS I ONS

§15-308-81 Purpose §15-308-81 Purpose.. This Thi subchapter governs the gene the generalral procedures for thethe repurchase by the the orat o n or a qua l corporation i fied nonpro qualified fit housing nonprofit housing trust rus of a dwe l l ing uni dwelling unit s ubj ect too the ubject ictions the res t r i ct i ons set forth forth

3 0 8-30 30

in in s e c i on 2 0 1 section H- 4 7 a ( 1 201H-47 (1), HRS HRS. [E f 1/ 15 [Eff 2 1/15/22; comp comp DEC 1 0 2022 ] ( Auth : HRS §2 0 1 (Auth: HRS H- 4 ) Imp: §201H-4) Imp : HRS HRS §2 0 1 H- ) §201H-47)

§15-308-82 Applicability.. This §15-308-82 This subchapter subchapter app l e ttoo all applies all dwe l l ng unit dwelling unitss for for whi the which the restri c t i ons sset forth restrictions forth i ·in sect i ons 2 0 sections including 201H-47, including the shared the shared appreciation appreciation equity equity program restrictions,, program restrictions 2 01 H- 201H-49, and 2 0 1 and H- 201H-51, HRS HRS, rema remainin in in eeffect.. [E f 1/15 [Eff 1/15/22;2 comp comp DEC 1 0 2022 1] Auth:: HRS HRS §2 0 1H- §201H- 44 Imp: Imp : HRSHRS § 2 0 1 H- 4 77 §201H-4

§15-308-83 Providing consent §15-308-83 consent to to additional additional financing.. a Within Within the the statut statutorily l y required required ttimeime period period from from the the date date oof purcha purchase, the the corpora t on corporation shall cons shal consent ent ttoo addit onal financing additional financing or or re financ refinancinging of the of the original original mortgage mortgage andand subordinate subordinate the the restr provided iinn ssection i c t i on provided restriction ection 2 0 1 H - 201H-47, HRS HRS, a as fol l ows : follows: 1 When When the the total total loan amount does loan amount does not not exceed exceed corporation's purchas the corporation the purchase price price oof thethe property as property as determined determined by by the the provi provisionsons oof ssection ection 1 5 - 3 0 8 - 5 a 15-308-85(a); 2 WhenWhen the the total total l o an amount loan amount exceeds exceeds thethe corporati corporation's on purchas purchase priceprice oof thethe property property and the and the lloan oan iiss used used forfor:: (A) Capital (A) Capital improvement improvements; B Payment Payment oof subs idy , deferred subsidy, deferred llandand value value or deferred or deferred s a salese price price;; Payment oof the C Payment the corporat corporation's on share oof share appreciat appreciationion under under the the Shared Shared Appreciat Apprediation on Equi Equity t y Program; Program; or or D)D ) Purcha Purchase o leased fee of leased fee interest interest forfor the the leas ehold prope lease½8id owned.. rty owned property b When When the the corporati on ~orporation's rights under rights under ssection ection 1 5- 3 0 15-308-103 1 0 3 are are s t applicable,, the still app l i the total total amount amount oof li ens and liens and encumbrances encumbrances cannot cannot be be greater greater thanthan the the sum sum oof eeightyy per per cent cent oof the the owne r ' original owner's original purchas purchase price and price and thethe owner owner's' sshare oof netnet appre ciation . In appreciation. In cases whe cases where re aa house house lot lot was was purcha purchased and and the the owne owner contributed the contributed the owner owner's' own own llabor construct the abor ttoo construct the

3 0 8-31 31

0 l

dwe l l ing , the fair ma r dwelling, ket value of the market the dwel l ng shall dwelling be included as part of the the owner owner's ' share of net net appreciat appreciation. ion . In extreme hardship cases involving involving health and safety, safety, thethe corporation may al l ow up too an low addi tional twenty per cent additional cent of thethe owner owner's ' original gina purchase price price and the the owner owner's' share of net net appreciation; ion ; provided that the the lien lien or encumbrance iss improvement purposes only.. for a loan for capital improvement (c In cases where the the corporation on previouslyy consented to to the the exi s existinging loan oan and the the principal balance iss greater than than the the total loan oan amount amount determined herein, n , the corporation may cons ent too the consent the principal balance of the the previously ly consented-to consented-to loan. oan . (d In cases where the the corporation would have consented to to the the exi s existinging loan oan ini t i initiallya l y made wi thout without consent ent and the the lender ender has submi tted an app l i submitted application i on for re lief;e f ; provided that the the lender ende mus mustt complete all requirements and pay all l fees as l i s istedted in in s e ction i on 1 5- - . 3 0 8-4. (e In any event event, thethe total loan amount amount s hahall l not exceed the fair mar not ke t value or county a s s essed market sed value of the the property property at the h e time ime the he lo oana n iss made, whichever iss l owe whi r. ower. [ Eff f 1/15 2 15/22; am and am comp JEE 1 ()0 2022 ( Auth:: DEC HRS $ 2 0 1 H- 4 ) (Imp: §201H-4) Imp : HRS §2 0 1H - 7) 1H-47)

§15-308-84 0 8 4 Repurchase when owner seeks to to transfer title title.. (a If an owner owner s eeks to transfer e ks to the title the title toto a dwe l l ing unit to dwelling to whi which thiss subchapter app l applies, , the the corpo ration corporation shall have the first opt the ion option too purchase the the dwe l l ing uni dwelling t . If the unit. the corporation corporation wa ives its waives its repurchase option, option, a qual i fi ed nonpro qualified fi nonprofit housing trust s hall housing a l have th~the opt ion to option to repurchase the the uni unit.t. (b The repurchase price price sha l be dete shall rmined by determined the corporation the corporation pursuant pursuant to to the guide l guidelines set forth set forth inn s ection 1 . ction 1 5 - 3 08-105. (c The corporation corporation or qua l i fied nonprofit qualified nonprofit housing ing trust rust may repurchase repurchase thethe dwel l ing uni dwelling unitt e ither th by::

3 0 8-32 32

� : ,

(1 Conveyance free free and clear of all liens iens and mortgages; or (2 Conveyance subj subjectect toto exi s ing mortgages and existing li ens iens. . (d If thethe real property property iss conveyed inn the the manner provided in manner in paragraph (c ( 1), it s ha l be hall conveyed to to the the corporation or or qua l i i ed nonprofit qualified nonprofit housing ing trust only after all mortgages and l i ens are iens are released. eas ed . (e If thethe real prope property rty iss conveyed inn thethe manner provided inn paragraph (c ( 2), the manner the corporation corporation or qua l i fied nonprofit qualified nonprofit hous housinging tru trust,, as app l i cabl e , applicable, s ha halll ass ume the sume the s e l l r s obl ller's igation on any f irst obligation s created for mortgage created o the the purpose of s ecuring curing the the payment of a loan payment oan of funds expended s o lelyy for the the purchase of the the real property property by the the s e ller; e ; and any mortgage or l i en created for any other purpose ien provided that the the corporation has previouslyy consented to it inn writing to writing.. The interest createdcreated by thethe provisions ions of thiss s ubsect ubsection s ha l cons t hall i tute a l i constitute en ien the real prope on the propertyrty and shal shall be superior too any other mortgage or l i except for:: en except ien (1 Any first mortgage created created for thethe purpose of s ecuring payment of a loan of funds ng the payment expended s o lelyy for the the purchase of the real property by the s e ller; property e ; (2 Any mortgage insured or held held by a federal housing ing agency; and (3 Any mortgage or lien ien created created for any other purp o s e provided that the corporation has previouslyy consented to to it inin wri t ing . The writing. ii1 amount paid by the corporation amount corporation or qua l i fied qualified nonprof nonprofit i t housing trust,, as app l i cabl e , too applicable, the s e l the ller s halla l be thethe di ffe rence , if any, fference, [f �I between the the purchase price price determined in in s ection i on 1 5 - 3 0 308-105 1 0 5 and the the total of the the out s tanding principal balances of the outstanding the mortgages and liens iens a s s umed by the sumed the corporation. on . (f If the the shared appreciation appreciation equ i y program equity program amount amount was paid, and the the corporation repurchases the the property roperty pursuant to pursuant to the the guidel guidelines set set forth forth inin s e ction i on 15-

3 0 8-33 33

308-105, the amount amount paid for the the shared appreciation i on e qui quity y program program shall be r eimbur eimbursed too the the owne r. owner. [ Eff f 1 /15 2 2 am 15/22; am and comp DEC 1 0O2022 ] (Auth:: HRS §2 0 1H-4) H- 4 ) (Imp: Imp : HRS § 2 0 1H-47) H- 4 7 )

§15-308-85 Determination of §15-308-85 of repurchase price for purchases subj ect to subject to restrictions.. (a If thethe corporation repurchases a dwe l l ng uni dwelling pursuant too unit pursuant section ection 2 0 1H- 1H-47(a)( ) ( 1), HRS, the repurchase p rice ce shall be dete rmined as fol l determined ows : lows: (1 The p rice c e at which the the dwe l l ing uni dwelling unit was origi riginally y purchased plus i nt erest credit subs i di , iff any, to subsidies, to be recaptured recaptured for o fede r federally y s ubs z ed mortgages;; provided ubsidized that when land and only is is purchased and the the purchaser p rovidesovides his or her labor abor to to cons t ruct the construct the dwe l l ing uni dwelling unit,, thethe f air mar ket market value of the the dwe l l ing provided by apprai dwelling appraisal for the the purpos e s o f qualifying qua l i fying for o r the f i rstst mortgage or by app r a isa obt a appraisal obtained by the the corporation plus the the o r iginal ginal purchase p rice ce of the h e landand sha shalll be u sed too det e rmine the ermine the original ginal purchase price price;; (2 The c ost s t of improvements too the the dwe l l ing dwelling uni unit added by the the owner owner a fter e the the original purchase, provided that the the own e sha owner l shall furnishs h financial i do cumentat cumentation on i ndi cati ng ndicating the actual c ost s t of improvements in form in a form deemed acceptable by the corpor t on inn itss corporation ion ; and s ole d i s c retion; ( 3 Simple impl i nt e nterest at the the rate rate of one per cent per year on the purcha ser purchaser's ori ginal cost cap i t and capital imp rovement s . improvements. (b If the rporation has a s s i the c orporation gned itss igned repurchase r ightsgh s too the the dwe l l ing uni dwelling unit to to a qua l i fied qualified nonprofit hous nonprofit ing t rus housing rust,, thethe corporation corporation sha l shall determine the the repurchase price price using using the the same ame methodology as provided in subs ection ( a).. subsection (c Any dwe l dwellingli ng uni unit repurchased by the the rporation or qua l c orporation i fied nonprofit qualified nonprofit housing housing trust rust under this s ubchapt ubchapter shall be in in resalablee cond i t on ; or,, condition; inn the alternative, ive , thethe e s timated imated expense required required too

3 0 8-34 34

r e store tore thethe dwe l l ng uni dwelling unitt to to r e s a able cond esalable i t on s hall condition al con s t itute a reduct constitute ion of the reduction the repurchase price price toto be p aidd by thethe corporat corporationon or qua l nonprofit housing i i ed nonprofit qualified ng t ru rust,, as app l i cabl e , provided,, howeve applicable, r, that no however, reduct reduction ion sha l be made for the shall the e s timated imated expense too repair a sub s tant i substantial s oil i or construction ion defect fect as defined ned inn s ection ion 2 01H-51, HRS HRS.. (d The corporat corporation on sha shalll notify fy the the s e l ller of the s e l l the r s r ight ller's ght too recoursee under chapter 1 5 -300, 3 inn the the event there iss a d i s event that there agreement on the sagreement the repurchasee priceprice determined D Y, the _the corporation.. [ Eff f 1/15 2 15/22; am and comp am DEC 1 [ 0 202? ] ( Auth:: HRS 1H - 4 ) (Imp: § 2 01H-4) Imp : HRS §§2 01H-4 1H- 1 ) 1 H- 4 7, 2 01H-51

S15-30 §15-308-86 8 6 Waiver by corporation corporation of of right right to to repurchase.. (a The corporation corporation may waive the the right to repurchase set to set forth forth in in s e ction 1H-47, HRS, if: i on 2 0 1H- f: (1 The owner owner wishes too transfer title title to to thethe dwe l l ing uni dwelling unit by devi devisee oror through the the laws aws of descentcent to to the the owner owner's ' spouse, chi child, d, parent,, or parent or s iblinging and thethe devi devisee or or he i heir iss otherwi otherwise e ligibleigible too purchase such a dwel l ing unit dwelling unit under this this chapter;; (2 The purchaser wishes to to transfer t itle t l e too the dwel the l ing uni dwelling unit toto the the co-owner co-owner or a household member member who meets the e l i gibil gibilityity requirements;; or requirement (3 One of the l owing conditions exist: the following exi : (A The wa iver wi waiver l not will not result inn the the owner owner being ablee to being to sell thethe dwe l l ing unit dwelling for a s ubs tant i ubstantial profit nor promot promote speculative purchasing ing or s e l ling ing of dwel l ing uni dwelling unitss to which thiss subchapter to whi !i � I� app l e and the applies the dwe l l ing unit iss sold dwelling sold i I

to a pe rson to s on who iss a qua l i i ed res ident qualified dent and the owner owner pays the corporation the corporat on itsits percentage share share of the net net appreciation, appreciation, iff app l applicable;; or ( B Fiscal cons considerations iderations wi will l not not a l l low ow repurchase of the the dwe l l ing unit dwelling unit.. b If the corporation waives itss right too repurchase a dwe l unit pur suant l ing uni dwelling uant toto sectioni on 2 01H- 1H-

3 0 8-35 35

0

47 47 a ( 1 (1),, HRS then the HRS, then the dwe l l ing uni dwelling may be unit may be t rans ferred by transferred by the the owne owner and the r and the r e s trict ions pprovided restrictions for iinn s e ct for i ons 2 0 1H sections 201H-47 4 7 through through 2 0201H-51, HRS HRS, sha l shall then bbe r e then instated iinn any reinstated any s ub s e quent conveyance subsequent conveyance.. IInn the event the event thethe r e s t r i ct i ons aaree wa restrictions ived the waived, the corpo r at on corporation shall inform shall inform thethe own owner e r oof the the waiver waiver in in writ writinging and and the owner the owner, at at the the owne owner's r ' exp expense, sha l draft shall draft and and rec o record such instruments as such instruments as are are nec e necessaryary to to make make the the wa iver e f waiver fective . effective. c IIf the the c o rporation waives corporation waives iitss r i ght to right to repurchase aa dwe l r epurcha l ing unit dwelling unit due due ttoo cons t ruction construction lit igation, then litigation, then the the dwe l l ing unit dwelling unit maymay be be rented rented b by tthe h e owner owner aas pprovided for for inin Sy_chap subcha,.pt~~4 7 7.. 1 1 2 ( ff 1/15/22; [Eff am and am and compcomp JEU 2022 j (Auth: DEC 1] U) 2Ul2] ( uth : HRSHRS §2 0 1H - 4 ) §201H-4) Imp : HRS Imp: HRS § S 2 0 1H- §§201H-47, 201H-49, 2 0 2 0 1H- 201H-50, 2 0 1H - 1) 201H-51)

§15-308-87 Release by the corporation §15-308-87 corporation of of right to purchase.. to a The The corporation corporation may may release release the the ri ght to right to purchas purchase a set forth as set forth iinn ssection ection 2 0 1 H- 201H-47, HRS HRS, iif the the property property iiss financed financed underunder aa fede r federally y s ubs mortgage pro subsidized mortgage gram and program and when when f i s ca fiscal cons ide rati ons wi considerations l nnott a l l will allow ow the the rrepurchase epurchase oof the the dwe l dwellingl ing uni unit.t. The corporation b The corporation's r i ght ttoo repurcha right repurchase presc prescribed ibed iinn s ec t ions 2 0 1 sections H- 4 7 ttoo 2 0 201H-47 201H-51, HRS HRS, s ha shalll bbe automat i c a l y ext automatically inguished and extinguished and shal shall not not attach attach iinn s ub s e quent t rans subsequent transferss o of t i t l e whe title mortgage holder when aa mortgage holder oor other other party party becomes the owner becomes the owner oof the the dwe l l ing uni dwelling unit mortgage forec pursuant ttoo aa mortgage pursuant losure , foreclosure foreclosure, foreclosure under under ppower owe r oof s al sale,e , oor aa conveyance conveyance in in llieu ieu oof for e c o sure foreclosure after aa foreclosure after foreclosure actionaction iiss commenced; commenced; oor when wheti.raa mor t mortgage gage iiss a s s igned ttoo aa feder assigned federal houshousing agencyagency~. IIf requested by requested by thethe owner the corpora owner, the t on shall corporation shall at at1 the the owne owner's r ' expense execute aa written expense execute written r e le releasea se inin aa form form whi which may may be recorded.. be reco [E f 1/15 [Eff 22 1/15/22; comp comp DEC 1 O2022 ] ( A uth : HRS (Auth: HRS §§22 0 1 H- 4 ) Imp:: , HRS OlH-4) HRS SS2 0 §§201H-47, - 201H-50, 2 0 1 H 2 0 1H- -51) 201H-51)

§15 - 308-88 0 8 8 Procedures regarding repurchase by of repurchase.. of right of corporation and waiver of a 3 0 8-36 36

��� � � 2

IIf an an owner owner s e seeks ks toto trans transfer aa dwe l unit,, the l ing unit dwelling the owner sha owner shall l deliver deliver to to the the corporation corporation by by mail mail,, postage prepai postage prepaid, d , or or in person aa certificate in person certificate of of intent intent ttoo s e l , and sell, and aa ccapital improvement improvement computation computation form form aas used used by by the corporation.. the corporat IIf the the owner owner s e e ks aa waiver seeks waiver oof the the corporat corporation's i on right to right to repurchase repurchase the the dwe l l ing dwelling unit under unit under ssection ection 2 0 1H- 201H-47(a ( 1 (1),, HRSHRS, thenthen the the owner owner sha l al shall also s o deliver deliver to to the the corporation corporation or or byby mai l, mail, postage prepaid, postage prepaid, oor iinn person person aa requerequest s t for for waiver waiver oof right oof repurcha right repurchase.. b The The corporation corporation sha l review shall review the the cert i fi cate certificate oof intent intent ttoo s e l , the sell, the reque request st for for waiver waiver oof right right oof repurchas repurchase,, or or both both.. The corporation The corporation may may reque request st any any addi tional information additional information neces necessary for for th~the review review and and the owner the owner sha shalll comply comply with with thethe reque request. s t . TheThe corporation sha corporation l , within shall, within sixty sixty daysdays,, not notify fy thethe owner owner in wri in writing t ing of of its its de c i ion to decision to e i either waive waive the the right right to repurcha to repurchase or or toto repurchas repurchase the the unit unit.. IIf thethe corporation corporation determines determines that that it it wiwilll repurcha repurchase the the dwel dwelling ling uni unit,, thethe repurcha repurchase sha shall l cl o e within close within ninety days ninety days of of noti fi cation . This notification. This timetime l imi limit,, howeve however, r may may be be extended extended iif the the homeowner homeowner fai failss to to comply with comply with aall l oof the the condi tions relating conditions relating to to the the repurchas repurchase procedure provided that procedures,, provided that the the repurchas repurchase pri price ce sha shall l remain remain unchanged unchanged.. c IIf the the corporat corporation determine determines that that it it wi willl either repurchas ei repurchase o or al l allowow aa qual i fied nonprofit qualified nonprofit hou housings ing trust trust to to repurchas repurchase the the dwe l l ing uni dwelling unit,, it it sha shall l provide provide aa repurchas repurchase di s cl o sure sheet disclosure sheet to to the the owner and owneF and enter enter intointo aa repurchas agreement with repurchase agreement with trhe the owne ownerr"·i . � All All rights rights and remedies oof the and remedies the corporation corporation in in regard regard:::F9 _ ot i itss opt option on to to repurchas repurchase the the dwe l dwellingl ing unit uniit • 1•

shal shall ~bE; 1 be I i �- JI, pre s e preservedrved notwithstanding notwithstanding the the fai lure failure of of the the owner J to, owner ,to execute aa repurchas execute agreement . repurchase agreement. �1 �u� +?~ ! 1 l ·1 ( a ) , IIf the the corporation corporation determine determines that that it it will wi1~i, waive 1)-t~ waive its � )· � I rights rights under under s e ction section 2 0 1 H- 201H-47 4 7 a ( 1 (1), , HRS HRS, ,1 ,

then it sha then shall l is s ue to issue to the the owne ownerr aa waiver waiver oof right right o 1~f:f repurchase.. repurcha The waiver The waiver sha shalll not not be be i s sued ttoo anyo~e issued anyone other tlJ...~ other than the the owner owner.. [ E ff 1 / 1 5 [Eff 1/15/22;2 comp comp UlC 11 C 2022 1] ( Auth UtL (Auth:: HRS §2 0 HRS 1H - 4 ) §201H-4) Imp : HRS Imp: HRS §2 0 1H §201H-47) - )

3 0 8-37 37

� �� � � ) !l I

§15 - 308-89 0 8 9 Resale or rental rental of of repurchased dwelling unit.. (a Fo l l owing the Following the repurchasee of a dwe l l ing uni dwelling pursuant too thiss subchapter, unit pursuant chapte , thethe corporat corporation on may in in itss d i scretion i on either resell l or rent or l e a s e the dwe l ease l ing uni dwelling unit.t. (b If the oration r e sells the corporation l s a repurchased ed dwe l l ing uni dwelling unit,t , the the s alesle price price sha l be dete shall rmined by determined the corporation;; provided, the provided, howeve however, r , that thethe s aleses p rice ce shall not not exceed the greater of:: ( 1 The fair market market value of the the dwe l l ing unit dwelling reduced by a reasonable onabl di sscount count rep resenting ent ing the decreasee in in value resulting ing from the r e s t ri from c t i on s set forth rictions forth in in s e c tions i on s 2 0 1H-47 H- 4 7 a nd 2 0 1H-49, H- HRS, and the the shared appreciation program appreciation program; or ( 2 The priceprice at whi which the the dwe l l ing uni dwelling unit was repurchased by the the corporation t on plus administrat administrative ive expenses and the the s alee s ha halll be condi t conditionedi oned on imp o s i t on of the imposition the re s tr i ct i ons set ictions set forth forth in in sections 2 0 1H-47 47 and 2 0 1H-49, H- HRS, and the the shared appreciation program appreciation program.. (c Res al pol i Resale ci e s too be fo l l policies owed by the followed the corporation or its corporation its de signated ed repre sentative are as ive are follows:: 11 Res al Resales sha shalll be priced ced too be affordablee too mee meett the h e incomes of target arget groups.. 2) 2 ) A s tatutor tatutorily y requi required red time ime period transfer and use re s t r i c t i on shall be imposed on each iction r e sale.e. 3 The shared appreci appreciation i on equity quity program program shashalll be part of the the r e salee program program.. 44 When the the numbe numberr of app l i cants exceeds the applicants the numberr and type numbe ype of uni ts avai l units ab e , s ection available, i on 15 - 3 0 2 5 s ha 308-25 l app hall apply.l . Aft After the the initial a p e riod, o d , theh e s alee of uni unitss s hall a l be offered ffered to app l to icants on the applicants the wai s . The waitt l ist. appl applicantcant s ha l a lso hall s o mee meett the original income requirements rements as det e rmined for the ermined the project j or uni t. unit. d If the the corporat corporation o n rents rents the the new new proj ect project dwe l ling uni dwelling unit or repurchased dwe l l ing uni dwelling unit,, it s hall l

3 0 8-38 38

)� �

rent the rent the dwe l unit as provided in l ng unit dwelling in subchapter 4.. [ Eff f 1 /15 2 15/22; am and comp am DEC 100 2022 ] ( Auth:: HRS H- 4 ) (Imp:: HRS §§2 0 1H-47, § 2 0 1H-4) H- 2 0 1H-49) H- 4 9 )

§15 - 3 0 90 Repurchase under foreclosure of 308-90 of properties subj ect to subject corporation to restrictions.. The corporation may repurchase a property property that iss the the subj ect of a subject mortgage foreclosure osure or or foreclosure closure under powe power r of s alee when the h e property property iss encumbered w i t h the ith the r ight- ght­ to- repurchas e restrictions o-repurchase restrictions set forth in et forth in s ecti ectionsons 2 01H-1H- 47, 2 0 1H-49, H- and 2 0 1H- 1H-51, HRS, and the the shared appreciation ion equity equity program program.. (1 ForFor property property encumbered by the the restri cti ons restrictions set forth set forth in in sections 2 0 1H-47, H- 2 0 1H-49, H- and 2 0 1H-51, H- HRS:: (A The priceprice may be determined by the the guidel guidelines set set forth forth inin s ectioni on 1 5-308- 105 (a (1 too ( 3),, or at a price price that wi l enable the will the corporation corporation to to r e selll the property; the property; or (B The corporat corporation on may waive itss opt ion to option to purchase the the p rope rty and sha roperty shall l be ent i tled to entitled to the the proceeds remaining remaining in in excess of the the customary and actual cos t and expenses of the costs the foreclosure foreclosure e , encumbrances of record, s ale, record, purchaser's costs purchaser sts of improvement improvements and simple impl annual annual interest of one per cent cent on purcha ser purchaser's cost and original cost capital improvement improvements. s. (2 ForFor prope propertyrty encumbered by the the shared ) I

appreciation program restriction ion equityy program restriction l � only:: y (A property may be repurchased when The property ' ITl1 'ti price,, determined by adding the price the adding the the l 1Il corporation's share of net corporation net appreciation appreciation amount plus the amount the superior encumb rances encumbrances c �1 [11I ,

of re cord, will enable the record, the corporation corporation to r e sell to l the the prope rty . property. (B The corporation sha l be ent i shall entitled l e d to to

3 0 8-39 39

9

its share oof net its share net appreciation appreciation whe the when the prope propertyrty is is trans ferred as transferred as the the result result of the of the fore c o s ur e s a foreclosure sale. e. C IIf thethe corporat i on corporation's share iiss not share not p a paidd whe when duedue,, interest interest on on thethe corporation corporation's amount wi amount l accrue will accrue intere interest at at the the ssimple impl annual annual rate rate of of twetwelve per per cent cent unt until paid.. i paid The corpo The rat o n shall corporation pursue fore c shall pursue foreclosureosure oor l eg legal a cti on . action. [E ff 1 / 1 5 [Eff 2 1/15/22; am and am and comp comp ( Auth : HRS DEC 1 CO2022 1] (Auth: §2 0 1 H - 4 ) HRS §201H-4) ( Imp : HRS (Imp: HRS §§2 0 1H - §§201H-107, 2 0 1H- 201H-47, 2 0 1 H - 201H-49, 2 0 1H - 1) 201H-51)

SUBCHAPTER 66 SUBCHAPTER

SHARED APPRECIAT SHARED ON EQUITY APPRECIATION EQUITY PROGRAM PROGRAM RESTRICT I ONS RESTRICTIONS

Purpose.. §15-308-101 Purpose This ssubchapter governs This governs the general the general procedure procedure for for the the payment payment ttoo thethe corporation corporation for for iitss pe percentage share share oof thethe net net appreciation upon appreciation upon thethe tran transfer o or s a salee o the dwe l of the l ing dwelling uni unit purcha Porat from �th.f_*orporation. purchased from ( .ion . [Eff 1 / 1 5 [ Ef 2 2 comp 1/15/22; comp (Auth:: C 2022 ] ( Auth Utt. ]f [ UEU HRS $2 0 HRS 1 H- §201H- 44 Imp: HRS § 2 0 Imp : HRS 1 H- 4 77 §201H-4

0 8-102 Applicability.. Thi §15 -308-102 This sub subchapter sha l app shall apply y ttoo aall l dwe l l ing uni dwelling unitss deve sold, oor developed, sold, sponsored sponsored by by the the corpora t ion and corporation and for for whi which a all res trictions sset forth restrictions forth iinn s e ct ion 2 0 1H- section 201H-47, HRS HRS, including the including the r i ght ttoo repurchcw~ right repurchaae_ r e s t ri c t i on are restriction are iinn ffect . eeffect. [E [Efff 1/15 2 1/15/22; comp comp DEC 1 ) utC 2022 1] ( Auth 02022 (Auth:: HRS §2 0 1 HRS H- 4 ) Imp: §201H-4) HRS §2 0 Imp : HRS 1H - 4 77 §201H-4

§15-308-103 Corporation Corporation's percentage share of of net appreciation.. net a As As the the corporation corporation iiss providing the providing the opportunity opportunity for for the the purchas purchaser t buy aa too buy home be home low fair below fair market value,, the market value the purcha purchaser s ha l pay shall pay corporation iits the corporation the t s share share oof the the net net appreciation appreciation whewhen tthe h e prope rty iiss t rans property ferred or transferred or s o sold.. The appra The i appraisal

3 0 8-40 4

procured by thethe corporation corporation s ha l be used to hall to e stablish sh the corporati the on corporation's percentage share at the the time ime of tran transfer or s alee by the fo l l culation : owing c a lculation: lowing Original Fai Market Value minus Purchas Fair Market er Purchaser's Original Base Purchase Price divided divided by Original Fai Market Value rounded to Fair Market to the the nearest nearest one per cent cent..

Net appreciation Net appreciation iss calculated lows : calculated as follows: (Current Current Fair Market Market Va lue of the Value the dwe l l ing unit dwelling as originallyy purchased excluding excluding any capital imp rovement by the improvements the purchaser subsequent ubsequent to to original purchase - Purchas er Purchaser's Original Base Purchase Price - Actual S a l ales incurred, iff costs incurred, appreciation equity any.. Any shared appreciation quity agreements into on or after August entered into August 27, 1 9999 sha l shall not be e l igible not gibl e too deduct e costs.. deduct s ales (b The shared appreciation appreciation e qu quity program i y program res triction ction sha l be part shall part of the the conveyance document document for the s alee of the dwe l unit recorded in l ng unit dwelling in the the bureau of conveyances conveyances.' Not i fi cation of the Notification the shared appreciation program appreciation program restriction restriction as an encumbrance on the property the property sha shalll be recorded as a separate eparate memorandum memorandum. (c If the the corporat ion corporation's percentage share of net appreciation appreciation iss less than one-ha one-halfl of one per cent cent,, appreciation equity the shared appreciation the y program program r e s t riction i ct ion sha shalll notnot apply.. [ Eff f 1/15 2 15/22; comp DEC 1 0) 2022 ( Auth:: HRS § 2 01H-4) 1H-4 ) (Imp: Imp : HRS § 2 01H-47) 1H- )

§15-308-104 Payment §15-308-104 Payment due on sale or transfer.. (a The purchaser agrees that upon any s alee or ransfer, t rans e , the the corporation orat shall sha immediately be l immediatel notified not i fied by the the owner owner of the terms the te rms and condit conditions of the s alee or transfer.. Except Except for a permitted t rans ransfer approved by the h e corporation, the the corporation shall on sha l be entitled ent it l e d to to be paid its its share share of the the net appreciation appreciation on the e f fective ive date date of the the transfer of an amount amount equal to: o:

308-41 308 41

Corp orat ion Corporation's Pe rcentage Share mul Percentage tipl ied by Net multiplied Net Appreciat ppreciation as dete ection 1 5 -308- rmined inn section determined 1 03 ( a).. (b If the corporat i on s share iss not corporation's not paid paid when due, interest on the the corporat ion s share of net corporation's appreciation ion sha shalll accrue at the the simple impl annual raterate of twelve per cent cent per year unt i paid.. The corporation until corporation s ha hall l a lsos o be ent i le d to entitled to be paid paid the the cost cost of reas onabl e attorney'ss fees reasonable fees and c ostss t to to enforce thethe payment of the payment corporation's percentage share of the the corporation the net appreciation net i on due.. (c If the corpora t i on s share iss not corporation's not paid paid when due as a r esult of a non-occupancy violation: olation : owner sha (1 The owner shalll provide evidence of the the e ffective date of non-occupancy.. In the ive date the event sufficient event c ent evidence is is nott provided by the owner owner, the h e corporat corporation on shal shall ma the make the final de terminat termination on of the the e f fective ive date date of non-o ccupancy.. (2 If the the owner owner failss too provide the the effective ffective date of non- occupancy, the the corporation on may commence legal action action against against thethe purchaser s too payy the the shared apprec i ion equity appreciation equity program amount due.. program amount (3 If a s alee occurs after the the non-occupancy vio lation, ation, a l l owab lowable clo ing cost osing cost sha l not shall not be a l l owed as a deduction lowed determining the on in determining the corporat i on corporation's share of net appreciation due.. net appreciation corporation shall pursue legal action (d The corporation action too recover the the total amount amount owed.. [ Eff f 1/15 2 15/22; comp � FC C 1 ()Q 2022 ] ( Au th : HRS $ 2 0 Auth: Imp : 1HR 1H- ) (Imp: §201H-4) 1 HRS1

§ 2 0 1H-47) - 7) � �

§15-308-105 Definition §15-308-105 Definition of of sale or transfer SFor transfe·r.. :~~lfor purposes of thiss subchapter, a s alee or transfer means when one of the f o l l owing o ccurs:: ollowing (1 When ownership int erest in the dwe l l ing unit dwelling iss s old ld or transferred; ransferred; (2 When the the dwe l l ing uni dwelling unit iss no longer used as the owner owner's' primaryy re sidence; idence ; or ( 3 When thethe dwe l l ing unit or any part of the dwelling the dwe l l ing uni dwelling unit is is rented rented to to someone omeone e lse, s e , and

3 0 8-42 42

3i 1

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owner has not the owner not obtained thethe corporation's determination rmination that hardship c i r cums rcumstances exist,, pursuant exi pursuant toto section ection 2 0 1H-49, H- HRS.. [ Eff ff 1 / 1 5 2 15/22; comp DECC 1 0 2022 ] 1 ( Auth :: HRS §2 0 1H-4) H- ) (Imp: Imp : HRS S S §§202 0 1 H- 4 7, 2 0 1H-49) H- 4 9 )

§15-308-106 Permitted transfers.. §15-308-106 (a The following permitted transfers following fers sha l not shall not result in in the the corporation corporation's percentage share of the the net net appreciation appreciation becoming due and payable.. However However, the the corporat i corporation's cons ent for the consent the f o l l owing transfers ollowing fers s ha l be required: hall ired : (1 Cre a t on of a l i Creation en or encumbrance whi ien which does not a ffect rights not rights of occupancy provided that the total amount the amount of liensiens and encumbrances cannot be greater than the cannot sum of e ighty the sum ghty per cent of the cent the owner owner's' original purchase price price the owner and the owner's ' share of net net appr e c i i on . appreciation. In the the case where a house lot was purchased the owner and the owner contributed hiss labor abor to to construct the construct the dwe l l dwelling, the then the then fair market market value of the the dwe l l ing s ha dwelling l be included as hall part of the part owner's the owne r ' share of net net appreciation.. In extreme hardship rdship c ases involving health and s afety, involving fety, the the corporat ion corporation may a l l ow up to low to an addit onal twenty additional twenty per cent of the cent the owne r ' original purchase price owner's price the owne and the r ' share of net owner's net apprec i i on appreciation provided that the the lien lien or encumbrance would be a loan oan for capital improvement improvement purposes only; onl (2 Tran sf Transfer by devi devise,, descent, operation oof cent , or operation la ~aww upon the h e death of a joint oint tenant enant or t enant by the .tenant the ent irety; entirety; ( 3 . cTransfer Transfer to relative who mee to a relative meetst e l igibili gibi l ty tiy 1 requirements requirements upon death of owner owner; ( 4 Trans fer to Transfer to spouse or chi ldren who meet children meet ' 1

e l igibi l y requirements; igibility equirements ; (5 T rans fe due to ransfer to a property property s et t l ement tlement wher whereby the the spouse who meets e l i gibility i ty rement becomes owner equirements r equi owner; (6 Trans fer into Transfer into an inter viva vivos t ru rust in in whi which the owner owners r ema in the emain the primary primary bene f i a ry beneficiary

3 0 8-43 43

and doess not not affect ffect their i r ights ghts off occupancy; or (7 Trans Transferfer into into or from from a communit community land and t rurust non-profit organi or other non-profit i s hed zat ion e s tablished organization too maintain or sustain sustain long-term ong-term housing ing a ffordab il y . ffordability. (b If the corporat ion corporation's r ights ghts under thiss subchapter are are derived from from the vacant lot the s alee of a vacant by the the corporation, corporation, the the use of the the land and as security ecurity for a loanoan too be used by the the owner owner too purchase the the land and or too finance finance the the construction construction of a principal res idence is esidence is a permi tted transfer too whi permitted which thethe corporation ' s corporation's consentconsent is not requi not required..red The corporation sha corporation l consent shall consent in in writing writing too the the s ubordina t ion of itss l i ubordination e n or contingent ien ngent lien ien rights rights this subchapter too the under this the l i ienen of any mortgage p laced aced on thethe proper propertyy too finance finance the the construction i on of a principal residence idence or the the purchase of the the va cantant llot. ot . [E f 1/15 [Eff comp and comp am and 2 2 am 1/15/22; DEC 1 Q DEC ) 2022 ] 1 (Auth:: ( Auth HRS §2 0 1H - 4 ) (Imp: OlH-4) Imp : HRS §2 01H-4 1H - 4 7 §15-308-107 Determination §15-308-107 Determination of of fair fair market market value.. Wheneverr it iss necessary (a Wheneve ary too det e rmine the net ermine appreciation i on of the the property property,, the the corporation i on s ha halll s e lect an appra i appraiser and order an appra i appraisal of the the fair market value of the market the dwe l l ng uni dwelling t . The owner unit. owner s ha halll payy for the the cos costt of the the appr a i l. appraisal. (b Within tenten bus business days upon receipt of the the appraisal,, a wr apprai itten copy sha written shalll be provided to to the the owne owner. r . Should thethe owner owner dispute sput e the the appr a i appraisal, , the the owner may obtain a s econd owner cond appra i appraisal the owne at the r' owner's s t and expense.. c ost � � �

(c If the the first appra i appraisal obtained by the the ­ corpo r corporation on iss n<f5t not d isputed, sputed, that appra i appraisal sha l be shall no u sed e toto dete rmine . th fair determ~Befthe i ma rket value.. market � ne

(d If the owne ownerr disputes spute s thethe first appra i appraisal, , the s econd the cond appraisal ordered by the the owner owner sha l be shall sent ent too thethe corporat corporation on within within thethe ear l earlier of (1 ten ten bus business days upon r e ceipt, ipt , or (2 forty-five five c a lendar endar days a fter e the the first app ra i appraisal is received is ived from from the the oration . corporation.

3 0 8-44 44 e IIf the the se cond apprai second appraisal iiss l owe than the lower than the fi firsts appra i appraisal, , the the fair fair mar market ke t value used sha value u s l be shall be one-hal one-half of of thethe sum sum o two appr a the two of the i l . appraisals. f IIf the the second second appra appraisal i iiss not not lowe r the lower, the corpora t i on corporation's first appra~sal first appraisal s ha l b shall used to be used to det ermine the determine the fair fair market market value value.. g AllAll apprai appraisals shashall l be be made made byby aa qua l i fied qualified appra i appraiser aas defined defined in in this this chapte chapter.. [Eff 1 / 1 5 [ Ef 1/15/22; 2 2 amam and comp and comp DEC 1 0O2022 Auth:: HRS HRS §20 - ) Imp: §201H-4) Imp : HRS HRS § 2 0 H- 4 77 §201H-4

§15-308-108 §15-308-108 of the corporation Cancellation of corporation's net appreciation.. of the net share of a The The corporation corporation's right ttoo be right be paid paid aa share share oof the the netnet appreciation appreciation sha l shall const itute aa l i constitute en on lien on the the property property unt i aall oof the until the fol l owing event following have occurred events have occurred:: 1 TheThe corporation corporation has has beenbeen ful fullyy paid paid iitss share oof the share the nnet appreciation appreciation and and any any other other amount that are amounts that are duedue andand owing owing the the corporation;; corporation 2 The The corporat corporationion r e l e releasesa s e s the the shared shared appre ciation equity appreciation equity program restriction; and program restriction; and 3 The The release release iiss recorded recorded at at the the bureau bureau oof conveyances bby the conveyances purchaser.. the purcha ( ) Should no amount be due (b) Should no amount be due the the corporation corporation fol l owing all following all computations computations, the the corporation corporation may may is sue issue aa r e l e a s e oof the release the shared shared appreciation appreciation equity equity program program upon the upon the reque requests t oof the the owner owner.. IInn the the event event the the corpora corporation t on provides provides wr itten not written ice ttoo the notice the owner owner that that no amount no amount is is due the owner due, the owner, at at the the owner ' own owner's own expens expense, shall shall dra and have draft and have recorded recorded such such ( i j

ins t ruments as instruments as are neces a~e;n~cessary to to ma make thethe re l ease release 7e e ff e c effective. ive . The The own e r sha ow~~~ submit aa recorded l submit shall recorded copy copy oof �1/) W 1.i I, 4 I.

the r e l the e a s e instr~~ents release instruments to to thethe ccorporation within within � � �me � n forty- forty-five five daysdays of the date otµt~e date of of the the corporation corporation's I1 �i !L�

written notice written notice in order to in,order to have have the the shared shared appreciation equity appreciation program r e s t equityiprogram riction cance restriction l cancelled. . i I / \I 1I

(E f 1/15 [Eff 1/15/22; 2 am and am and comp comp DEC 1 CJ� 2(022 1] Auth:: HRS JE HRS §2 0 1H - 4 ) Imp: §201H-4) Imp : HRS HRS § 2 0 H- 4 77 §201H-4

§15-308-109 08-109 Exercise of of the right right to to purchase restriction.. restriction In the In the event event the the corporation corporation exercises exercises

3 0 8-45 45

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its opt its on ttoo purchas option purchase the the propert property,y , the the shared shared apprec i i on equit appreciation equity y program program res t r i ct i on s ha restriction shalll not not app apply.. IIf the the purch purchaser p a part o d part paid of oror the the ful full payment for payment for thethe shared shared appre c i i on equity appreciation equity program, program, the corpora the corporationt on s ha shalll rrefundefund the the amount paid.. amount paid [Eff 1 / 1 [ Ef comp 5 / 2 2 ; comp 1/15/22; DEC 1 0 2022 ] Auth:: HRS DEC HRS § 2 0 §201H-1 - 44 Imp: Imp : HRSHRS § 2 0 1 H- 4 77 §201H-4

§15-308-110 Prepayment §15-308-110 Prepayment of of corporation corporation's percentage share of of net net appreciation.. a TheThe owner owner may pay aall or may pay or part part oof thethe corpora ti corporation's share oof the share the net appre c net appreciation i i on at at any any ttime without aa s a ime without salee or or t rans transfer o the dwe l of the l ing uni dwelling unit.. b IIf only only aa part payment iiss made partial payment made ttoo the the corporati corporation, on , the the owne r ' or owner's original purchas price sha purchase price l shall bbe increa increased for the s ed for the purp purpose o of ma king any making any l a later e calcu l i on to calculation to det e rmine the determine the b a l ance oof the balance the corporat corporation's i on share oof the share the net net appr eciat i on . appreciation. c The The minimum minimum amount amount oof part payment iiss partial payment twenty- twenty-five ive per per cent cent.. [E f 1/15 [Eff 1/15/22;22 comp comp 2022 ] ( Aut DEC 1 O2022] (Auth:: HRS §2 0 1 HRS H- ) Imp:: HRS §201H-4) HRS §2 0 1H - §201H-47) 4 7 )

SUBCHAPTER 77 SUBCHAPTER

OWNER OCCUPANCY OWNER OCCUPANCY WAIVER WAIVER PROCE DURES PROCEDURES

$15- 3 0 12 1 Purpose and applicability.. Thi §15-308-121 This subchapter iiss adopted subchapter adopted purs uant to pursuant to chapte chapter 991, HRS HRS, and and imp l ement section implements section 2 0 1 H - 201H-49, HRS and the HRS, and the shared shared appreciat appreciation ion equity equity program pursuant to program pursuant to s ec section i on 2 0 1H- 201H- 447, HRS HRS, whi which app l applies ttoo rea 1l property, property, re s t r i c t i ons restrictions on iitss us on use,, and and except i ons to exceptiod~ to tho thosee r e s t r i c t i ons . restrictions. [E f 1/15 [Eff 2 2 comp 1/15/22; comp DEC 1 .0 2022 l] ( Auth (Auth:: HRS §S2 HRS 0 1 H- §§201H- 44, 2 0 1 H- 201H-47, 2 01H - 9 ) Imp':' 201H-49) Imp: HRS HRS SS2 0 1H- §§201H-47, 2 0 1H -4 9 ) 201H-49)

S15 - 3 Application for temporary owner 08 -122 Application §15-308-122 occupancy waiver.. When the When the owner owner oof aa uni unit iin n any any qua l i i ed aaffordablee hous qualified ng proj housing project submit submits anan

3 0 8-46 46

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app l i application i on toto the corporat corporation on for an excep t on too the exception the owner owner o ccupancy requi rement rement in in s e c t i on ion 2 0 1H-4 9 , HRS , the fol l the owing sha lowing l apply:: shall (1 The app l cant s ha applicant halll submi submitt too the the corporation on a completed temporary owner occupancy waiver form owner form as provided by the corporat corporation; ion ; (2 Along with the the temporary waiver form, form, thethe applicant s ha app l submit too the l submit hall the corporation the fo l l the owing information:: following cover letter reque (A A cover s ting the requesting the temporary emporary owner occupancy waiver and whi owner states which states the length the ength of the the temporary temporary waiver period requested, ted, including including,, but but not not limited imited to to a letter etter fromfrom a phys ician, physician, dean, or commanding o f f fficer;; (B A signed Hawa Hawaiii i state state income tax tax return return for every year the app l cant has applicant occup occupiedi the dwe l the l ing uni dwelling unit;; (C Document Documentationati on the monthly mortgage payment payments the owne ownerr iss p a ying; ng ; and (D Addi t Additional documentation nec essary onal documentat ary for the corporation the corporation to to ver verify fy the the hardship circumstance and make a determination on the temporary waiver reque on the request.st . ( 3 Upon receipt, ipt , the s taff of the the corporation on s ha l time hall ime stamp tamp thethe app li application. i on . (A If thethe owner owner's ' temporary waiver reques requestt iss found to to be valid valid under this this chapter,, the the staff sha shall l iss ssueue written written not i fication of that det e rmi notification nation to ermination to the app l the cant within applicant within sixty ixty working days thereafter.. (B If thethe owner owner's ' temporary waiver reques requestt iss found too be inva l d under thiss invalid chapter,, the the staff s ha l , wi hall, thin sixty within ixty working days of receipt, ipt , soo not notify the fy the app l i cant , along applicant, long with the the reason reason or reasons that the the temporary wa iver waiver reque request is denied.. s t is

3 0 8-47 47

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[E ff 1 / 1 5 [Eff 2 15/22; am and am comp comp DEC 1 0 2022 ] (Auth:: HRS §S2 1 H- §§201H- 4, 2 0 1 H-49) - 4 9 ) (Imp: Imp : HRS § 2 01H-49) 1H- 4 9 )

§15 - 3 0 123 Hardship circumstances required.. 308-123 Except for a natural di s aster,, the Except the corporation corporation may grant a temporary grant emporary waiver of the the owner owner occupancy requirement r ement if the the app l applicant is is unab l to unable to reside ide on the prope the propertyrty temporari temporarily the fol l y due too the owing lowing condi t ons : conditions: (1 An unforeseeablee job ob or mi l itary t rans military fe ; ransfer; (2 A temporary emporary educational sabbati sabbatical;; (3 S e r ous i ll erious n e s s of the llness the person or household member member; or (4 Other circumstances as det e rmined by the ermined the corporation on a case by c ase b a sis.. Eff 1 / 1 5 [ Ef 15/22;2 2 comp DEC 102022 0 2022 ] ( Auth:: HRS §§2 01H-4, - 2 01H-49) 9 ) (Imp: Imp : HRS §2 01H-49) 1H- 4 9 )

$15-308 -124 Duration of temporary waiver.. §15-308-124 (a The c orporation rporation may waive the the owner owner occupancy requi r ement for a total of not rement not more than than ten ten years after thethe purchase of the the dwe l l ng uni dwelling unit.t . If the the owner owner does nott reoccupy the the dwe l l ing unit at the dwelling the end of the the t empo r y waiver period, emporary period, the the owne owner r sha shalll pay the the corp o r t on itss share of the oration appreciated value of the net appreciated the h e prope propertyrty inn accordance with subchapter 6, if app l applicable, e , and thethe corporation may repurchase epurchas the the dwe l l ing uni dwelling unit inin accordance with subchapter 5 of this this chapter.. If the the corpora t on e lects corporation ects not not too repurchase the dwe l the l ing uni dwelling unit,, thethe owner owner s ha l pay the hall the corporation corporation simple impl interest interest on the the original cost cost and capital imp rovements at the improvements the rate rate of twelve per cent a year unt untili the the unit is is reoccupied or s old. d. (b If thethe right too repurchasee r e s t riction i ct i on has expired and only expired only the the shared appreciation i on equity equity program i c t i on iss app l i program r e s t riction cabl e , then applicable, then thethe owner owner sha shalll pay the the corporation oration itss share of the the netnet appre c i ated value of the appreciated the property property inn accordance with subchapter 6 of thiss chapter.. [ Eff f 1 / 15 2 2 am 15/22; am and

3 0 8-48 48

comp DEC 1 0 2022 1 (Auth:: HRS §S2 0 H- §§201H-4, 2 0 1H-49) H- 4 9 ) (Imp: Imp : HRS §2 0 1 H- 4 9 )

§15-308-12 §15-308-125 5 Allowable uses of of the dwelling unitunit during the temporary waiver period.. the During the temporary emporary waiver period,period, the the dwe l l ing uni dwelling unit may be rented or l e a rented s ed , provided that the eased, the owner owner comp li complies with all applicablee laws. amount of monthly rent aws . The amount that may be charged by the the owner owner sha l not shall not exceed (1 the corporation the corporation's a ffordablee rent guidelines or (2 the owner the owner's ' monthly mortgage payments for principal,, i ntere nterest,, taxes,, and app l i cable payments for mortgage applicable homeowner a s s ociation insurance,, homeowner ion fees,, maintenance fees,, and l ea easee rent rent;; whi cheve r iss greater.. The whichever app l c ant sha applicant l submit shall ubmit to to the the corporation a s igned gned agreement.. rental agreement Sub letting iss not Subletting not a l l owed . lowed. [ Eff f 1 / 15 2 2 comp 15/22; DEC 1 ) 2022 1] (Auth:: HRS SS2 02022 1H - §§201H- 4, 2 0 1H-49) H- 4 9 ) (Imp: Imp : HRS § 2 0 1H -49) 1H-49)

§15-308-126 -308-126 Proof Proof of of occupancy.. A waiver may be granted only to to qua l i fied residentss who have paid qualified resi tate income taxes during dent state esident ng all years in in which they occupied the dwel they dwellingl ng uni t . The owner unit. owner sha l shall continue nue to to payy res ident dent s t atee income taxes during during the the waiver period.. owner s ha The owner l submit hall submit signed Hawa Hawaii ii state income t a state x returns for ax o each year of the the temporary emporary waive waiver period.. [ Eff f 1/15 22 15/22; comp 1 JEU U 2022 Q ] I ( Auth : : HRS SS2 0 H- §§201H-4, 2 0 1H-49) H- 4 9 ) (Imp:: HRS §200 1H- 4 9 S15-308-127 Extension of §15-308-127 of the owner occupancy requirement.. requirement The corporat ion may extend the corporation the owner owner occupancy requirementrement by one month for every month or fraction fra ction thereof that the the owner owner occupancy requirement requirement of section ection 2 0 1H-49, H- HRS , iss t emporar i y waived.. emporarily [ Eff ff 1 / 1 5 15/22;2 comp DEC 1 0 2022 1 (Auth:: HRS §S2 02022] 1H- §§201H- 4, 2 0 1H-49) Imp : HRS § 2 0 1H-49) H- 4 9 ) (Imp: H- 4 9 )

§15-308-128 Recovery of §15-308-128 of administrative expenses and attorneys'' fees.. The corporation may recover all l rel evant administrat elevant fees ive expenses and attorneys'' fees administrative

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from the from the appl cant iinn admi n i applicant s t ering and administering and imp l implementing this subchap this t . subchapter. [E [Effff 1 / 1 5 1/15/22;2 am and am and comp comp DEC 1 0 2022 ] Auth:: HRS HRS §§2 0 H- §§201H-4, 201H -4 9 ) 201H-49) Imp: Imp : HRS HRS § 2 0 1 H- 4 9 ) §201H-49)

S15-308-129 Failure to §15-308-129 to reoccupy.. Fai lure to Failure to reoccupy reoccupy the the dwe l l ing unit dwelling unit byby the the own owner e r at at the the eend of of the ttemporary the emporary waiver waiver period period sha shalll bebe suffi ci ent reason sufficient reason for the for the corporation, corporation, at at iitss opt ion : option: 1 To To purcha purchase the the unit unit asas provided provided in in s e c i on section 2 0 1H- 201H-47, HRS as app l i HRS, as applicable.. IInn this this si tuation , the situation, the owner owner shal shall not not rece ive mo receive morere than the than the maximum maximum to to which which thethe owner owner woul would be be ent i entitled under s e c l ed under i on 2 0 1 section H- 201H-47, HRS HRS; oror 2 Demand Demand the the ful payment for full payment for the the shared shared appreciation equity appreciation equity r e s t r i c t i on . The restriction. The corporation has corporation has the the r i ght to right to ve r verify the fy the owne ownerrsr ' failure failure to to ooccupy.. [E [Efff 1 /15 1/15/22; 2 am and am and comp comp DEC 1 0 2022 (Auth:: ( Auth HRS SS2 0 HRS H- §§201H-4, 201 H- 4 9 ) Imp:: HRS 201H-49) HRS §2 0 1 H- 4 9 ) §201H-49)

§15-308-130 -130 Extension of of the temporary waiver period.. An An owner owner may may appl apply y for for an an ext ension oof the extension the ttemporary emporary waiver waiver peri period; od ; provided provided thatthat the the total total waiver p e r waiver od s ha period shalll not not exceed exceed ttenen years years;; provided provided further,, that furthe that app l i application i on iiss made made atat l ea ninety least ninety wor days prior working days prior ttoo the the t e rmina t i on oof the termination the i n i initial a temporaI temporau Y _Wa iver _p e waiver riod . [ Ef fleriod. [Eff 1 / 1 5 1/15/22;2 comp comp 2022 1] ( Auth [JEU 1 0 202l Ut.C (Auth:: HRS §§201H-4, HRS SS2 0 1 H- 4 2 0 1 H- 4 9 ) 201H-49) HRS § 2 0 1 Imp:: HRS H- 4 9 ) §201H-49)

SUBCHAPTER 88 SUBCHAPTER

PROCEDURES TO IMPLEMENT PROCEDURES TO IMPLEMENT QUAL I FIED RES I QUALIFIED DENT PRE RESIDENT PREFERENCES IN THE IN THE INIT IAL SALE INITIAL SALE OOF MARKET- PRICED DWELLING MARKET-PRICED DWELLING UN ITS UNITS

§15 - 3 0 151 Announcement 308-151 publication.. Announcement;; publication For aa For per iod oof thirty period thirty cal days,, the enda days calendar the deve oper sha developer l shall pub l sh oor cause publish cause to to be be pub l shed iinn the published the c l a s s classifiedfied

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section ction of at at l ea east one newspap newspaper er pub l shed dai published daily y inin the S t the having a general circulation ate and having tate irculation in the the county in in whi which the the proj ect iss located, project located, at at least twi twice a week, or once a week iff paired red with another form form of pub l c not public ice such as a de s ignated notice gnated project ect web s i te or website informational meeting, an announcement announcement containing ining at at a minimum a summary of the minimum the f o l l owing information:: ollowing (1 The location ion of the the proj ect ; project; (2 A fair and reasonable onab e s timate imate of:: (A)} The total number number of market-priced ced unitss to be included in to in the h e proj ect ; project; (B The priceprice range of the the mar ket-pri ced market-priced units;; (C The approximat approximate s ize ze of thethe market- market­ priced uni priced t ; and units; D ) A de s ignation (D) gnat ion whether the the mar ket-pri ced market-priced uni ts uni ts are are being being s old in fee fee s,simple imple or leasehold.. statement that one hundred per cent (3 A statement cent of the the mar ket-pri ced uni market-priced unitss are beingbeing sold sold in in fee fee simple or l ea s eho d ; easehold; (4 The de f inition of " qua l definition i ed res ident" qualified dent " as contained in in section i on 2 0 1H-32, H- HRS; (5 The name and addr address of the the real e statetate broker de s ignatedgnated by the the devel whom developer,, whom interested individuals interested l may contact contact to to be placed on a res ervation i on l ist, s , and to to obtain obtain information on the further information the p roj ct ; and roject; 6 ) A statement (6) tatement that that thethe mar marketket rate rate units units wi l will be ava i able to available to anyy qua l i fied r e s i qualified dent esident without regard without regard to to race,, sex, col color,, re l i gion, marital s t a igion, atus,, fami l ia status,, familial national origin,, person with a d i s ab onal origin il y ability status,, age, or HIV HIV (human immunodeficiency virus infection. virus i on . (7 The pub l i cation sha publication shall l a lsos o include include HUD HUD's' equal hous opportunity s logan housing opportunity ogan or logo.. [ Eff f 1/15 2 2 am 15/22; am and comp ] (Auth:: HRS §22 0 1 H lH-4) Imp : 2 4 CFR Part 4 ) (Imp: Part 1 08; 24 CFR Part Part 2 00, Subpart Subpart M; HRS SS2 0 §§201H-1,- 2 0 1H-45, - 5 1 5-3) 3)

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§15 - 3 0 -152 Designation of §15-308-152 of residential residential units.. The deve l developer of any hous housing ng pro ject containing containing mar ke t -priced res idential market-priced nt i units s ha units hall ignate one l designate hundred per cent cent of such unitss for s alee to to prospect ive prospective owner-occupant " qua l owner-occupant i ed r e s i qualified dent s " during esidents" ing an i n itial a offering ffering p e riod o d of thirty endar days.. There thirty calendar a fter , Thereafter, the deve the l developer has thethe d i scretion cretion too s ell l the rema ining remaining unitss too any purcha purchaser.s r. [ Eff f 1/15 22 15/22; comp DEC 1 0 2022 ] ( Auth:: HRS § 2 01H-4) 1H - 4 ) (Imp:: HRS §§2 01H-1, - 2 0 1H-45) H- 4 5 )

§15-3 0 8 153 Reservation lis 308-153 t , requirements.. list, (a Dur i ng the i n itial During a o f f eringing period period of thirty thirty c a le ndar days,, the lendar the deve l op e r ' s de s ignated developer's gnated broker shal shall comp compilei l a " qual i ed re sident"" re s ervation qualified rvation l ist s con s i consisting ing of the name names, s addresses,, and phone numbers of all individuals s tating ing a des ire to desire to purchase a mar ke t -priced uni market-priced unit contained in n the the announced proj ect . project. (b The l ist s shal shall be compi compiledled inn the the order inn whi which app l i applicantscant have submitted too the agent a dulyy the agent executed affidavi affidavit that the the appl applicant mee t the meets the de f i n definition i on of " qua l i ied r e sident", qualified " , agrees too be an owner - occupant for a minimum owner-occupant minimum of 365 days and wi l will obtain an owne obtain owner occupant type r occupant ype of loan oan and intendsends too become a purchaser of a mar ke t-pri ced uni market-priced unit.. (c Any individual who ma makes any false s e statement statement in the a f f idavit in davi iss sub j ect too criminal charges and subject civil action i on unde under the aws of thiss State.. Any the laws individual found to to have wi l l willfully y submitted false se information, informat on , made mi s s t atement , or wi misstatements, thhe withheld important important informat information on sha l be deemed shall emed too be ineligible igible for the the proj projectect and di s qu a l i fied from qualified from future future corporat corporation- on­ a s s isted s ted proj ect , provided that the projects, the corporation corporation shall, not waive waive:its i t r ight ght too pursue any other recoursee provided by law law.. (d The developer sha shalll submit the r e s e submit the rvation eservation l ist s together with the the executed affidavi affidavitss too the corporation within corporation within ten days of the the exp i ra i on of the expiration the i n itiala thirty thirty day offering ring period.. The corporat corporation ion wi willl provide provide the the deve l developer wiith an e l igible gible qua l i fied qualified resident l ist, which shal s , whi shall l ist s the the appl i applicants approved as " qual i fied re sidents." qualified . " The deve l developer sha l shall

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o ffer e affordable affordable uni units to to the the individuals ndividuals on on the the elig ib e qua l gible i fied res ident qualified dent l ist s ass described described in in i on 1 5 - 3 08-154. s ec tion 1 . (e Sixty ixty days before the the c lose o e of proj ect project s ales,, thethe developer shall submit ubmi t too the the corporation corporation a s ummar ummary off whi which individuals ndividual on on the the e l igible gible qua l i fied qualified r e sidents idents listlist purchased sed aa mar ke t rate market rate uni which did t , whi unit, id nott purchase a mar rate unit,, and the ket rate market the appli cant applicants' rea s on for not eason not purchasing ing a unit unit.. From time From ime to ime , to time, the c orporation the rporation may may reques requestt an an updated updated summary summary from from the deve l the developer.. [Eff Eff 1 / 1 5 2 2 am 15/22; am and and comp comp DE[ 1 )C 2022 1] ( Auth:: HRS DEC HRS $2 0 1 H- 4 ) (Imp: §201H-4) Imp : HRS HRS SS2 0 §§201H-1, - 2 0 1H-45) - )

§15-308-154 Sale of §15-308-154 of residential residential units.. (a) a ) The The developer l op shall offer shall ffer all l of of the the market-priced market-priced units units too those individuals who s names are whose are on thethe e l igible gible " qual ident " l ist i fied resident" qualified s by by one one off the the fol l owing lowing means:: the order in (1 In the in which their name names appear on the list;; the By the (2 By the drawing drawing of of l ot s ; or ots; or (3 By any other reasonable onable and fair method as determined by the developer.. the devel (b Once the e ligible igible " qual i ed res ident" qualified dent " l ists iss exhausted, exhausted, thethe developeroper hasa the the d i scretion cret i on to to s elll the remaining the remaining uni t to units to any purchaser.. (c The developer shall a lso s o be required required to to comp l comply y with the fol l owing lowing: : (1 Prior toto the the sale ale of any of the the units,, thethe developer loper sha l submit shall submit toto the the corporation, corporation, for its fdr its review review and approva approval, copies off the l , copies the sales contracts and deeds whi which reference ference the qua l i fied resident qualified ident prefe rence ; preference; ( 2 Prior to the sale Prio'r to sale of any of the the uni units the ts,, the developer shall developer ubmi t too the shall submit the corporation corporation aa copy of copy of the the covenant covenants, condit conditions,, and and restrict i ons , iff any, for review restrictions, review and approval approval;; The devel (3 The developer sha shalll submit submit to to the the corporation aa list is off all l ofof the the purchasers e number, name, date ot number by lot contract,, date of sales contract

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1, C�

date oof recorda date recordation, t o n , taxtax map map key, key, andand property addre property address.. On thi On thiss l i the s , the list, deve l developer sha shall l des i gnat e with designate with an an asteri asterisk sk * thos thosee purcha purchasers s are qua l who are who i fied qualified residents;; and res and 4 The deve The l developer s ha shall l comp l with comply with aall l app l i cabl e s t a t e a n d federal applicable state and federal fair housing fai r hous ing aws . llaws. [E ff 1 / 1 5 [Eff 1/15/22; 2 am and am and comp comp DEC 1 C 2022 ] Auth:: HRS HRS §2 0 1 H- 4 ) §201H-4) Imp : 224 CFR Imp: CFR 1 0 108; 2244 CFR CFR 2 0 Subpart M 200, Subpart M; HRS SS2 0 HRS §§201H-1,- 2 01H 201H-45,- 515 - 515-3; HRS Chapter HRS Chapter 51 514B)4B )

SUBCHAPTER 99 SUBCHAPTER

ADMINISTRAT ON OF ADMINISTRATION OF CORPORAT ION LEASES CORPORATION LEASES

§15-308-171 Purpose.. Thi §15-308-171 This s ubchapt subchapter s ha l shall gove the gene govern the generalral procedure procedures for for the the admini s t ration administration oof corp?tal i leases.. on-owned leases corp~:i;...a,.tion-owned [E ff 1 / 1 5 [Eff 2 1/15/22; comp comp UtL 1 � DEC 2022 1] ( Auth 0 2022 (Auth:: HRS $ 2 0 HRS 1H - ) Imp:: HRS §201H-4) HRS SS2 0 H- §§201H-5, 201 - 201H-9, 2 01 H- 201H-12, 201H-43, 2 0 2 0 1H- 201H-22 §15-308-172 Applicability.. This ssubchapter Thi s ha shalll appl apply y to to aall l lots lots deve and l ea developed and s ed by leased by the the corporation and corporation and des ignated for designated for lower lower cost cost and and ma r ket market hous housing, and and for for whi which llands ands and and funds funds wer used ttoo were used meet tthe meet h e goal goals andand obj ect objectives ° RFovidiuS a ffordab of~roviding affordablee hous housing.. (E f 1 /15 [Eff 2 1/15/22; comp comp DEU 1 0 2022 1] Auth:: DlC HRS § 2 0 HRS 1H - 4 ) Imp:: HRS §201H-4) HRS §S2 0 H- §§201H-5, 20 1H- 201H-9, 2 0 1H- 201H-12, 2 0 1H- 201H-15, 2 0 1 H- ) 201H-22)

§lS-308-173 Adminis S15-308-173 tration of Administration of residential residential leases.. a ) The (a) The corpora t on s ha corporation shalll review review app l icati ons submitted applications submitted by by l e s s e e s for lessees for a s s i gnment or assignment or transfer of transfer of leases leases and subleases,, when and sub l when app l applicable.. As app l i b As cable , aa purchas applicable, purchaser o of aa r e s identi residential le a s e sha lease l meet shall meet tthe h e fol l owing e l igibi following l y eligibility requirements:: requirement 1 The The purcha purchaser sha l be shall be aa qua l i ed res qualified ident ; resident;

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(2 The purchaser sha l not shall not be delinquent delinquent in in any obl igation too the obligation the State State or any county government, and sha government shall l not not have had a contract cancel previous contract cancelled due to fault ; to default; (3 If thethe lot iss vacant vacant, the the purchaser sha l shall demonstrate the financial abi l ity too ability cons truct a house within construct within two years of the the lease execut lease executionon date;; and (4 The purchaser sha l provide state shall tate and federal taxtax clearances.. (c The corporation corporation shall e s tablish lease rents sh lease rents initiate the and shall initiate the renegot i i on of lease renegotiation lease rents at the reopen period as stated the tated inn thethe lease agreement.. lease agreement (d Lease terms shall begin on the the sameame date date for all l uni unitss in ect , when pos s n a pro jject, ib . possible. (e The corpora t on sha corporation shall l te rminate a lease erminate lease when a les s ee fails essee fails toto cure thethe default fault of any condition condition of the l e a s e or violation ease violation of thisthis chapter,, using ing the the foll owing procedure:: ollowing (1 Lessees sha l be sent shall ent a written written not ice of notice default; fault ; (2 The mortgagee of record sha l be sent shall ent a copy the not the ice of defaul notice default;; and (3 L es required to essees shall be required to vacate the premi premises of the the l e a eased property upon s ed property termination of the termination the l e a ease.. (f corporation The corporation's cons ent shall be required consent requi red prior too any a s s i gnment or t rans ignment ransfer of leases and subleases,, if a l l sub l owed , according lowed, according too the the terms of the the le a s e agreement ease agreement.. [ Eff f 1/15 2 2 am 15/22; am and comp DEC 1 ()0 2022 �] ( Auth:: HRS $ 2 0 1 OEC H- 4 ) (Imp: §201H-4) Imp : HRS §§2 01H-5,- 2 01H-9, 1H- 2 01H-12, 2 0 1H- 1H-15, 2 0 1H- 1H-22) 2)

§15-308-174 §15-308-174 General lease provisions General prov~s~ons.. (a The corporation shal consent to shall consent to mortgages as stated tated inn I � I} 11 the l e a the ease.. (b The corporat i on corporation's cons ent shall be required consent required p rior or to to any improvements installed l ed on the land as stated tated inn the the lease.. (c The l e s s e e sha essee shalll pay for all costs when nec essary toto determine the the l e s s essee'ss equity quity in in the the property. roperty . f 1/15 [ Eff 2 15/22; comp DEC 1 0O 2022 1 ( Auth::

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HRS § 2 0 1H-4) H- 4 ) (Imp: Imp : HRS §S2 0 1H- §§201H-5, 2 0 1H-9, H- 2 0 1H- 1H-12, 2 0 1H-15, H- 1 5 , 2 0 1H-2 2 §15-308-175 1 7 5 Extension of of fixed fixed rent rent period or lease termterm for mortgage purposes.. (a The corporation may extend the corporation the fixed fixed rent period or term term for mortgage purposes.. corporation may adj The corporation the adjust the le a s e rent for the ease the current fixed periods current fixed ods and the the extended period as conditions of a l l owing the lowing the extension.. (b The extended l e a s e rentss sha ease shalll not not be used in the in the valuation valuation of the the purchase of the the l ea s ed fee eased fee i nt e nterest of the the land. and . (c The corpora corporationt on may charge fees fees for the the extension on app l ication . Such fees application. fees shashall l be as pres ented in § 1 5 - 308-7. esented - . (d The l e s see s ha essee l pay for all c osts hall a s s ociated ated w i ith h the h e extension.. [ Eff ff 1 / 1 5 22 15/22; comp DEC 1 0) 2022 ]1 ( Auth:: HRS §201H-4) Imp : HRS $ 2 0 1 H- 4 ) (Imp: § § 2 01H-5, H- 2 0 1H-9, H- 1H-12, 2 0 1H-15, 2 0 1H- H- 2 01H-22 §15 - 3 0 1 7 6 Sale of leased 308-176 leased fee interes interest of the land.. (a The corporation corporation ma may s ell l thethe l e a fee s ed fee eased interest of the the land and according ccording to to thethe terms of the the lea ease,e , or statetate s tatutes,e s , as app l i cable . applicable. (b The original terms ginal e rms of the the leaseea s e or revised s ed te rms and condi erms t ons mutua conditions mutuallyl agreed upon in in wri i ng writing s ha halll be used too value the l e a s ed fee eased fee int erest of the the la nd . and. (c The corporat corporation on may s ell l the l e a easeds ed fee fee nterest of the i ntere the land and for the project,, or for the proj individual ndividua l o s. ots. (d The l e s s e e sha essee shalll pay for all costs too purchase the leased fee fee int erest of the the l a nd " and." f 1/15 [ Eff comp 2 2 comp 15/22; DEC 1 O DEC 0 2022 ] 1 ( Auth : : HRS § 2 0 1H-4) H- 4 ) Imp : HRS §S2 0 (Imp: §§201H-5,- 2 0 1H-9, H- 2 0 1H-12, H- 1H-15, 2 01H- 2 0 1H- 1H- 22 3 0 8-56 56

9° 2 ,

DEPARTMENT PARTMENT OF OF BUS INE BUSINESS, ECONOMIC CONOMIC DEVELOPMENT DEVELOPMENT TOURISM AND TOURISM

Amendments ttoo and Amendments and compi l at on oof Chapter compilation Chapter 1 5 - 30 15-308, Hawai Hawaiii Admi ni s t rative Rul Administrative Rules,, on on the the Summary Summary Page Page dated dated November 114, 2 0 November 2022, wer adopted on were adopted on Novemb e r 115, 2 0 November 2022, foll owing aa pub following l c hearing public hearing held held on on Novemb e r 114, 2 0 November 2022, a ft aftere pub l public not noticece was given in was given in the the Honolulu Honolulu Star- Star­ Adve rt i Advertiser, , The The Garden Garden I s l and , The Island, The Maui Maui News News, We st West Hawaiii Today, Hawai y and and Hawa i i Tribune-Herald Hawaii Tribune-Herald newspapers newspapers on on October 14, October 4 2 022. 2 .

They sha They l ttake shall ake e f ten days effect ten days after after f i l ing with ling with the Office the Office oof the the Li eutenant Governor Lieutenant Governor..

DONN MENDE DONN MENDE, Cha i Chairperson 21 Hawaiii Hous Hawai ing Finance Housing Finance and and □ tJ) 0 C C'L □ 0 Si ~ Devel opment Corporat Development on Corporation � z. ca r-"\ er:: Lu Li J o0- APPROVED:: a � �/ ~Lu <-u � .,_ - r-L&... □ ga I Li.

~~ z5 ::z:: e~ w i-- ::> f:l � Gove rnor Governor u.J - ., 3 I State of State of Hawai Hawaiii

Dated:: No v. JV (\lo 0 91 2 °'1i).... 2

APPROVED AS TO APPROVED AS TO FORM::

Deputy Attorney General Deputy Attorney General

Fi ed iled

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