Refinancing a Reserved Housing Unit

Please allow at least four to six weeks to complete the subordination process.
Be advised this process may be further delayed due to missing or incorrect information being provided to the HCDA.

Owners of an HCDA Reserved Housing Unit may refinance under certain conditions with subordination approval from HCDA.  Provided the request meets the guidelines below, please complete the owner request letter and Subordination Request fillable form linked below and return to the HCDA along with all other required documents.  This letter will serve as the formal request for Subordination of HCDA’s Equity Sharing Payment Agreement.

On August 5, 2020, HCDA’s board allowed the 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.

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.

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.

The HCDA requires the following documents to process all requests for Subordination of Equity Sharing Payment Agreement:

Submit all documents listed above via email to: DBEDT.hcda.reservedhousing@hawaii.gov.

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

After the HCDA receives all of the above documents, please allow four to six weeks for legal review and execution of the Subordination of Equity Sharing Payment Agreement.