Refinancing a Reserved Housing Unit

Refinancing a Reserved Housing Unit

Owners of an HCDA Reserved Housing Unit may refinance under certain conditions with subordination approval from HCDA.  Complete the highlighted sections of the letter linked below and return to HCDA, along with the documents mentioned at the bottom of the letter.  This letter will serve as your formal request for subordination of HCDA’s shared equity interest.

On June 3, 2020, HCDA’s board allowed the temporary increase of the maximum refinancing limit to 95 percent of the original purchase price.  Previously, refinancing requests were limited to the original loan amount, provided it was no higher than 80 percent of the purchase price.  The new board approval does not consider the original loan amount in refinance limits.  Any subordination requests placed prior to September 7, 2020 will be eligible for the higher 95 percent limit.

All other prior policies still apply, such as the HCDA maintaining its second lien position at all times.  The HCDA will deny all requests that would subordinate its shared equity interest to a second mortgage (i.e., Home Equity Line of Credit) or would further demote the HCDA’s second lien position on the property.

If your request meets the above limits, you will be asked to draft a Subordination of Equity Sharing Payment Agreement.  Templates for this document are linked at the bottom of this page according to the project.  Please note there is a specific template for lenders utilizing Mortgage Electronic Registration Systems (MERS).

Please allow 4-6 weeks for legal review after submitting the draft document to HCDA.

HCDA’s consent to subordinate is required prior to refinancing an existing loan, regardless of whether the regulated term has expired or not.  HCDA’s consent is not needed if the lender is willing to subordinate to the HCDA, thereby elevating the HCDA to the first lien position.

Return all documents to:

547 Queen Street
Honolulu, HI, 96813

Or by email to:

If you have any questions, call HCDA at (808) 594-0300.

Request-for-Subordination-Template-Letter-June 2020

400 Keawe Subordination Template Rev.7.14.20

Ke Kilohana Subordination Template Rev. 7.14.20

Keauhou Place Subordination Template Rev.7.14.20

Keola Lai Subordination Template Rev.7.14.20

Pacifica Subordination Template Rev.7.24.20

Rycroft Terrace Subordination Template Rev.7.14.20

Symphony Subordination Template Rev.7.20.20

MERS Subordination Document Template 3nd Rev.7.14.20