Second MortgagesPosted on Aug 30, 2021 in Main
Second Mortgages for HCDA Reserved Housing units
Please allow at least four to six weeks to complete the subordination process needed for these second mortgages.
This process may be further delayed due to missing or incorrect information provided to the HCDA.
At its August 4, 2021 Kakaako Meeting, the Authority approved subordinating its Equity Sharing Payment for Reserved Housing Units to allow unit owners to obtain a second mortgage under the following conditions:
1. The maximum allowable second mortgage amount will be limited to the Original Sales Contract Price plus Any Partial Shared Equity Payments minus the Remaining Mortgage, and
2. The total allowable first mortgage plus second mortgage cannot exceed the current City and County of Honolulu property tax assessed value, if the current property tax assessed value is less than the Original Sales Contract Price.
HCDA’s Equity Sharing Payment is generally the difference between the Original Fair Market Value of the unit and its Original Sales Contract Price, but not to exceed the difference between the Resale Fair Market Value and the Original Sales Contract Price.
Example calculations of second mortgage amount:
The above policy on second mortgages is in addition to a previously approved policy that allows owners to refinance their primary/original mortgage up to 95% of the original purchase price. For more information on refinancing your primary/original mortgage, please visit our “Refinancing a Reserved Housing Unit” webpage here.
The HCDA requires the following documents to process requests for Subordination of Equity Sharing Payment Agreement for a Second Mortgage:
- Second Mortgage Subordination Request Letter
- Subordination Request Fillable Form
- Unit Deed with Reservation and Conditions;
- Unilateral Declaration of Restrictive Covenants for Unit Designated as Reserved Housing Unit;
- Preliminary Title Report;
- Current Mortgage Balance Statement
Submit all documents listed above via email to:
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.
If you have any questions, or for more information about HCDA’s Reserved Housing Program:
Phone: (808) 594-0311