Haw. Code R. § 6-27-12 - First mortgage loans; minimum and maximum loan amounts
(a) No member home loan secured by a first
mortgage on unencumbered improved real estate owned in fee simple shall exceed
eighty per cent of the lesser of the purchase price or the appraised value of
the real estate mortgaged to secure it.
(b) No member home loan secured by a first
mortgage on leasehold interest in improved real estate shall exceed eighty per
cent of the lesser of the purchase price or the appraised value of the
leasehold interest and improvements.
(c) If the purpose of the member home loan is
to satisfy an agreement of sale, the loan-to-value ratio shall be the lesser of
the purchase price, if purchased less than one year ago, or the appraised
value.
(d) If the loan-to-value
ratio is over eighty per cent, lenders shall obtain the system's prior written
approval for mortgage insurance. The mortgage insurance shall be obtained from
a mortgage insurer licensed to do business in the State of Hawaii and shall
insure or guarantee against the borrower's default or loss sufficient to reduce
the system's exposure to not more than eighty per cent of the value of the
mortgaged property. Mortgage insurance coverage shall remain in force until the
principal amount of the loan is reduced to eighty per cent of the market value
of the mortgaged property, at which time the coverage shall be subject to
cancellation solely at the board's option. The borrow shall pay for the
premiums for the insurance.
(e) No
member home loan secured by a first mortgage shall be made in an amount which
is less than or greater than the minimum or maximum loan amounts set by the
board of trustees. The minimum and maximum loan amounts shall be set and may be
periodically adjusted by the board of trustees at any of its regularly
scheduled meetings. Notice of the board's intention to adjust the minimum and
maximum loan amounts shall be included in the agenda for the meeting at which
loan amounts shall be set or adjusted.
(f) There shall be a minimum cash equity of
ten per cent of the purchase price for home purchases.
Notes
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