Stanley Chang
State Senate | Honolulu, HI

Credit Enhancement for Housing

Idea Category: Housing

2023 Ideas Challenge Entry

Hawaii Senator Stanley Chang introduced legislation that would leverage funds to boost existing housing production programs. Each year, the state allocates funds to the Rental Housing Revolving Fund (RHRF), providing $177,000 per unit for 4% Low Income Housing Tax Credit (LIHTC) projects. Specifically, the bill would:

 - Guaranty Fund: Part of RHRF serves as collateral, securing loans from private lenders.

 - Interest Rate Reduction: The state leverages credit for lower interest rates.

 - Funds Stay with the State: Funds remain with the state rather than being transferred to borrowers.


The aim is to multiply housing projects.


Chang believes this legislation would enable three to four times as many housing projects while reducing risk and financial strain on the state. Given the current costs required to create one unit, reducing the impact of state subsidy per unit. This proposal will encourage the growth of the private lending industry rather than replace private sector lenders. Eventually, this will help create a critical mass of inexpensive housing.

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