HI SB2538

Establishes the Hawaii Direct Home Loan Program administered by the Hawaii Housing Finance and Development Corporation to assist very low and low-income residents unable to qualify for conventional mortgage financing.

Creates the Hawaii Direct Home Loan Special Fund to be funded by legislative appropriations, gifts, donations, grants, and loan repayments, with funds used exclusively for the home loan program.

Limits direct loans to qualified applicants (individuals/families with incomes below 80% of area median income, adequate income, and reasonable debt-to-income ratios) purchasing single-family dwellings as primary residences, including new construction and existing homes.

Allows interest rates to be subsidized based on applicant income, sets loan terms between 33-38 years depending on income level, requires annual income recertification, and mandates refinancing with private lenders when household income increases substantially or home equity becomes significant.

Prohibits loans for construction draws, furniture, income-producing properties, swimming pools, and other specified purposes; appropriates unspecified general revenue funds for fiscal year 2014-2015, effective July 1, 2050.