* Editor’s Note: The title of chapter 3.30 was amended by Ordinance 3374 § 1, 2006.

There is established and created a fund to be known as the “First-Time Home Buyers’ Revolving Fund.” (Ord. 3374 § 2, 2006: Ord. 3286 § 1 (part), 2005)

A. The council finds that:

1. The County has experienced a significant increase in the sales price of single-family residences and that substantial savings for a down payment are required for a home purchase.

2. Families with income not exceeding one hundred forty per cent of the median annual income in the County find it difficult to save for a down payment.

3. The establishment of the first-time home buyers’ revolving fund is in the public interest as it will assist in expanding the privilege of home ownership to individuals of low and moderate income levels by providing no interest loans.

B. In adopting each fiscal year’s budget and capital program, the council may make appropriations to the fund. (Ord. 3452 § 1, 2007; Ord. 3374 § 3, 2006: Ord. 3286 § 1 (part), 2005)

For purposes of this chapter, unless the context clearly indicates otherwise, the following words and phrases shall be defined as follows:

“Administrative expenses” means and includes loan application fees, loan origination fees, document recording or filing fees, and loan servicing fees incurred by the County or paid to a grantee agency for implementing and administering the program.

“Department” means the department of housing and human concerns of the County.

“Director” means the director of housing and human concerns of the County.

“Displaced homemaker” means an adult who has not been employed full-time in the labor force for at least one year, but has worked during that time primarily to care for the home and family without remuneration, and is currently unemployed.

“Household income” means the total adjusted gross income of the applicant’s household, as defined by the Internal Revenue Code of 1986, as amended, for the calendar year preceding the year in which an application is submitted pursuant to this chapter.

“Resident of the County” means the person’s principal residence and domicile is within the County.

“Single parent” means an unmarried or legally separated adult who is pregnant or has one or more minor (less than eighteen years of age) children for whom the adult has sole or joint custody. (Ord. 3498 § 1, 2007; Ord. 3374 § 4, 2006)

A. The director of finance shall establish a separate account to record revenues and supplemental transfers credited to, and expenditures made from, the fund.

B. The director shall administer the fund and may award a grant to a qualified agency for the implementation and administration of the first-time home buyers’ program.

C. The director and the director of finance may adopt administrative rules necessary to carry out the purpose of this chapter.

D. On or before September 1 of each year, the director shall submit to the council a report on transactions involving the first-time home buyers’ revolving fund for the preceding fiscal year, including, but not limited to, the following:

1. Number of defaults;

2. Number of noncompliance incidents;

3. Number of participants refinancing first mortgage loans;

4. The sales price of housing units for the preceding fiscal year;

5. The median income of all new participants; and

6. Any repayments of loans made pursuant to this chapter.

E. The director shall also furnish to council such other reports as council may direct.

F. Loan repayment revenues, interest, and penalties are deemed appropriated upon receipt and are authorized to be expended for the purposes of the fund.

G. On an annual basis, no more than three per cent of this fund shall be used for administrative expenses. (Ord. 3498 § 2, 2007; Ord. 3374 § 5, 2006: Ord. 3286 § 1 (part), 2005)

A. An applicant for the first-time home buyers’ program shall meet all of the following requirements:

1. Be a resident of the County at the time the application is submitted;

2. Agree to occupy the eligible property to be purchased under this chapter, as the applicant’s principal residence, provided that this requirement may be waived by the director if the applicant is temporarily out of the County to further the applicant’s education or is called to active military duty, in which event, the applicant shall provide proof of enrollment at an educational institution or of military status, respectively, upon requesting a waiver;

3. Be a United States citizen or resident alien;

4. Be at least eighteen years of age;

5. For the taxable year preceding the application, have a household income of one hundred forty per cent or less of the County median annual income, as determined by the United States Department of Housing and Urban Development (HUD), or, if the applicant is a resident of Lanai, Molokai, or Hana, one hundred forty per cent or less of the adjusted median income for Lanai, Molokai, or Hana, as determined by the department;

6. Shall not have a greater than fifty per cent interest in fee simple or leasehold land suitable for dwelling purposes, as determined by the director, for a period of at least three calendar years prior to the date the application is submitted, provided that this requirement may be waived by the director if the applicant is the head of the household and is a displaced homemaker, or a single parent, or is living in a home not suitable for habitation, as determined by the director; and

7. Shall not have previously received a loan under this program, provided that this requirement may be waived by the director if the applicant is the head of the household and is a displaced homemaker, or a single parent, or is living in a home not suitable for habitation, as determined by the director.

B. Eligible properties shall be one of the following:

1. Single-family detached dwelling;

2. Multifamily dwelling;

3. Residential lot with plans to construct a single-family detached dwelling; or

4. Homestead leasehold property under the jurisdiction of the department of Hawaiian home lands. (Ord. 3374 § 6 (part), 2006)

A. The loan shall be secured by a second mortgage in favor of the County and shall have a term of fifteen years from the date of purchase of the eligible property. The borrower shall execute a promissory note in favor of the County. No interest shall accrue.

B. No repayment shall be required until one of the following events occurs:

1. The borrower refinances the first mortgage loan on the eligible property;

2. The borrower no longer uses the property as the borrower’s principal residence;

3. The term of the loan expires; or

4. The borrower sells the property.

Upon the occurrence of any of the events enumerated in this subsection, the borrower, upon receipt of written demand from the County, shall pay the County the outstanding principal loan balance, without interest, within thirty calendar days of receipt of the written demand.

C. In the event payment as required pursuant to subsection B of this section is not received by the County, the borrower shall be subject to the following loan recapture provisions:

1. Immediate repayment of the principal loan balance to the County;

2. Interest on the principal loan balance from the date of purchase of the eligible property to the date of repayment of the principal balance to the County at an annual rate equal to two times the prime rate at the time of borrower’s default under subsection B of this section, provided that the interest rate shall not exceed the interest rate allowed pursuant to chapter 478, Hawaii Revised Statutes, or any successor law; and

3. All costs, expenses, and fees incurred by the County to enforce the loan recapture provisions, including reasonable attorneys’ fees.

D. The borrower shall pay an annual loan administration fee of up to $450, as determined by the director, to cover administrative costs of the department or agency administering the loan.

E. The maximum loan amount under this program shall not exceed $15,000 per household. (Ord. 3374 § 6 (part), 2006)