HI SB1240

Establishes a no-interest loan program allowing the Hawaii Housing Finance and Development Corporation to provide loans to qualified low-income housing developers in lieu of state low-income housing tax credits.

Loan amounts equal 70 percent of the ten-year discounted present value of state low-income housing tax credits, capitalized at the rate of interest on general obligation bonds funding the loans.

Developers receiving loans become ineligible for the state low-income housing tax credit under section 235-110.8 and must meet the same rent, income, and use restrictions as traditional tax credit projects.

Corporation may forgive the no-interest loan after 30 years if the owner remains in compliance and the building continues as qualified low-income housing.

Authorizes issuance of general obligation bonds to fund the loan program, with appropriated funds available through June 30, 2014, and effective for buildings placed in service after December 31, 2011.