Kaua'i County, HI Article 5 Housing Eligibility and Selection

§ 7A-5.1 Kaua'i Resident Home-Buyer List.

(a) Purpose and Objectives. The Housing Agency shall establish a long term program, known as the Kaua'i resident home-buyer list program (home-buyer list), where Kaua'i residents may be placed on a list to be the first potential buyers of housing units or properties either developed directly by or for the County or privately developed to satisfy a County housing requirement. The home-buyer list is intended to:

(1) Establish a permanent list of individuals who want to be resident buyers that keep their position on the list for buyer selection for all available applicable properties;

(2) Prepare residents for the home buying process through home ownership education;

(3) Assist residents to become mortgage-ready so they will be able to buy a home; and

(4) Keep residents aware of upcoming projects and opportunities to buy a home.

(b) Eligibility. Any individual shall be added to the home-buyer list who:

(1) Is either a citizen of the United States of America or a resident alien thereof who physically resides on the Island of Kaua'i, State of Hawai'i; and

(2) Is at least 18 years old; and

(3) By oneself or together with a spouse does not own a majority interest in any real estate suitable for residential purposes; and

(4) Has completed a course of home-ownership education, approved by the Kaua'i County Housing Agency, that must consist of at least eight hours of classroom instruction, including consultation to determine mortgage-ready status.

(c) Home-Buyer Number.

(1) The number assigned to an eligible individual under the home-buyer list program shall be known as their "home-buyer number."

(2) Once an individual provides the necessary documentation to establish current Kaua'i residency and documents completion of the home ownership education and mortgage-ready consultation requirement, that individual shall be given a home-buyer number that is the next number on the home-buyer list on a first-come, first served basis, as determined by the Housing Agency's date and time stamp imprinted on a copy of the individual's home-ownership education certificate.

(3) Each individual that qualifies for the home-buyer list shall be assigned a home-buyer number. For married couples where each spouse qualifies for the home-buyer list, the same home-buyer number is assigned to each individual spouse.

(4) For individuals that have previously registered with the Housing Agency under the home-buyer priority list program and have provided evidence of their home ownership education and counseling, a public lottery was held to establish the numerical sequence of the first names for the home-buyer list.

(5) A home-buyer number is permanent and will not change.

(d) Removal from the Home-Buyer List. An eligible individual and his or her assigned home-buyer number shall remain on the home-buyer list until one of the following three events occur, wherein the individual's name and home-buyer number are retired from the list:

(1) The individual becomes the majority owner, either by oneself or together with one's spouse, of real property suitable for residential purposes; or

(2) The individual no longer resides or is no longer domiciled on the Island of Kaua'i; or

(3) The individual is deceased.

(e) Reinstatement. For an individual that was formerly on the home-buyer list and was removed because the individual became a majority owner of residential property, or no longer resided on the Island of Kaua'i, that individual may become eligible for the home-buyer list program upon once again qualifying for eligibility pursuant to the criteria listed in Subsection (b) of this Section under "Eligibility." Upon requalification, the individual shall be assigned the next available home-buyer number on the home-buyer list. The individual shall not be entitled to his or her former home-buyer number.

(f) Dormant Home-Buyer List Individuals. It is the responsibility of each individual on the home-buyer list to keep the Kaua'i County Housing Agency informed of the individual's current mailing address and telephone numbers. If mail from the Housing Agency is returned undeliverable and the individual's phone numbers are no longer in service, the Housing Agency shall deem that individual "dormant" until such time that the individual re-establishes contact with the Housing Agency. When re-establishing contact with the Housing Agency, the individual shall be required to document that they continued to be a Kaua'i resident during the dormant period.

(g) Mortgage-Ready Eligibility. To be offered the opportunity to be the first potential buyer under the home-buyer list program, the eligible individual must be designated "mortgage-ready." To be designated mortgage-ready, the individual or the individual's household shall be determined capable to purchase a fee simple residential property selling for a minimum of $250,000 or a leasehold residential property selling for a minimum of $175,000, as determined by the Housing Agency, utilizing underwriting criteria for loans typically available for affordable housing, favorable credit history, and necessary cash requirements. All individuals added to the home-buyer list shall provide documentation of their income, debts, and credit to enable the Housing Agency to determine an individual or an individual's household ability to purchase a home before being placed on the mortgage-ready home-buyer list and, periodically thereafter, to remain on the mortgage-ready home-buyer list.

(1) Mortgage-Ready Home-Buyer List. An individual or individual's household deemed mortgage-ready shall be placed on the mortgage-ready home-buyer list in the order of their home-buyer number.

(2) Not Mortgage-Ready Individuals. An individual deemed by the Housing Agency not mortgage-ready shall be encouraged by the Housing Agency to continue to obtain ongoing counseling by their home-ownership education provider to become mortgage-ready. An individual may request that his or her name be moved to the mortgage-ready home-buyer list by the Housing Agency's reevaluation of their ability to purchase a home at any time, but not more often than every 90 days. An individual may formally make written appeal for reevaluation of his or her ability to purchase to the Housing Agency, in a form and manner as determined by the Housing Agency.

(h) Home-Buyer Policy Income Limits. There are no income limit restrictions for placement on the home-buyer list. However, income limits are utilized for the initial offerings of most housing units or properties sold by the County or privately sold by a developer satisfying a County housing requirement. Over income individuals on the home-buyer list would be eligible to purchase only after all income eligible potential buyers have had an opportunity to buy.

(i) Compliance to Project Requirements. The status of being an individual on the home-buyer list does not supersede buyer eligibility criteria for housing units or properties made available by the County or privately developed that require specific criteria for buyer eligibility. Home-buyer list applicants must comply with any income restrictions relevant to any applicable dwelling unit or source of financing. During each stage of the workforce restricted marketing period, the order of purchase opportunity for individuals who are project qualified and on the mortgage-ready home-buyer list shall have the first opportunity to buy applicable housing units or properties before individuals who are not on the mortgage-ready home-buyer list.

(j) Sales Selection. For any housing units or properties subject to this policy, the seller shall first make the offer to sell any dwelling units or land parcels then available for purchase to the individual on the mortgage-ready home-buyer list with the lowest home-buyer number. Next, the seller must make the offer to the individual with the next to the lowest mortgage-ready home-buyer number, then to the individual with the third lowest mortgage-ready home-buyer number and continue this sequence until all dwelling units or land parcels are sold. If the seller has any properties available after offering them to all individuals on the mortgage-ready home-buyer list, then the seller shall make the properties available to eligible buyers not on the home-buyer list. This first opportunity to purchase shall conform to the compliance to project requirements provision of Subsection (i) of this Section.

(k) Multiple Opportunities to Buy. Any individual on the home-buyer list who declines an offer to buy an offered housing unit or property, or fails to complete the purchase after accepting an offer to buy, shall remain on the mortgage-ready home-buyer list and retain his or her home-buyer number without penalty or restriction and be eligible for the next property or project subject to this policy.

(Ord. No. 860, November 20, 2007)

§ 7A-5.2 For-Sale Housing.

(a) General Provisions.

(1) Qualified Buyers. All County housing programs, including workforce housing developments required by this Chapter, which assist residents to become fee simple or leasehold homeowners, are restricted to qualified buyers, as defined herein, except where sales may become market sales pursuant to Section 7A-6.1(j).

(2) Application. Each program or project shall establish interested households for that program or project by requiring the interested household to submit a written application provided or approved by the Housing Agency and any other documents required by the Housing Agency to establish eligibility.

(3) Eligibility. The Housing Agency shall review all purchase applications to determine eligibility pursuant to the specific program or project eligibility criteria established for that program or project.

(A) Income qualification shall be determined on gross annual income and based on documentation provided by the housing applicant, including the three (3) most current pay stubs and the two (2) most currently filed Federal income tax returns from all employed adults in the applicant's household.

(B) Kaua'i residency shall be determined on documentation provided by the applicant that indicates the applicant has a residence address on the Island of Kaua'i.

(C) Not owning real estate suitable for residential purposes shall be determined primarily from documentation provided by the housing applicant and may be verified by the Housing Agency.

(4) Preferences. The Housing Agency may approve various preferences for up to fifty percent (50%) of the units for sale in a project to prioritize otherwise eligible applicants including:

(A) Project Employee Preferences. Workforce housing units built by a developer for projects that generate workforce housing requirements may be sold with a preference to employees of the project.

(B) Geographical Preferences. One (1) or more geographical preferences may be imposed giving preference to qualified residents that live in a specified geographical area surrounding or adjacent to the project or that are employed within a specific geographical area surrounding or adjacent to the project. A geographical preference may also be extended to qualified residents whose immediate family lives in a specified geographical area surrounding or adjacent to the project.

(C) Essential Worker Preferences. Essential Worker providing critical community services such as health care, public safety, emergency first response, education, and the provision and maintenance of necessary community infrastructure.

(b) Selection. The selection list or lists shall be utilized by the developer to determine the numerical order to offer to sell workforce housing units to qualified buyers. Selection lists shall be established as follows:

(1) All applicable housing units shall first be offered to individuals on the mortgage-ready Kaua'i resident home-buyer list, in the order of their home-buyer number, subject to any preferences, and who otherwise qualify pursuant to any project-specific qualifying criteria, before any housing units are offered for sale to qualified buyers not on the mortgage-ready home-buyer list.

(2) After all individuals on the mortgage-ready home-buyer list have had an opportunity to purchase, a public lottery shall be conducted to establish a selection list for any project that anticipates more applicants than the number of housing units available. If the number of housing units available is equal to or greater than the number of anticipated applicants, selection may be established by a first-come, first-served basis or by lottery.

(A) The decision to utilize either the lottery or the first-come, first-served process shall be determined by the developer prior to the sales notice date.

(B) A lottery that has multiple preferences shall include all applicants in a single lottery. The selection list will be produced by applying applicant preferences and lottery numbers to sort all applicants into a selection list that has:

(i) The qualified buyer applicant with the lowest selection number (first) being a household that has the highest and the most preferences available and has the lowest lottery number, and

(ii) The qualified buyer applicant with the highest selection number (last) being a household that has no preferences and the highest lottery number.

(C) In a project that utilizes the first-come, first-served method, the developer shall utilize sorting method as utilized with a lottery, but substitute the date and time of receipt of a completed application in place of a lottery number to establish the numerical order.

(D) Projects that are developed in phases shall phase their respective restricted marketing periods and phase their respective application and selection processes.

(c) Priorities and Preferences for Sales by Lottery. After all applicable housing units in a project have been first offered for sale to all residents on the mortgage-ready home-buyer list, a development using a lottery to determine sales sequence for other buyers shall sort the lottery list by giving applicants priority as follows:

(1) First Priority—Homeownership Education. The first opportunity to purchase a workforce for-sale housing unit after home-buyer list residents have had the opportunity to purchase shall be given to income qualified buyers that have completed a qualified homeownership education course, as determined by the Housing Agency, consisting of at least eight (8) hours of classroom education, plus credit and mortgage ready counseling. To receive the homeownership education priority, a qualified buyer shall register with the Housing Agency and provide the Housing Agency with a copy of their homeownership education class graduation certificate. The Housing Agency shall determine which providers of homeownership education have the curriculum that qualifies graduates for the homeownership priority.

(2) Second Priority—Project Employee Preferences. Fifty percent (50%) of the total workforce housing units built by the developer for projects that generate workforce housing requirements of twenty (20) housing units or more shall be sold with a preference to employees of the developer and employees within the development area of the project as determined by the Housing Agency.

(3) Third Priority—Geographical Preferences. One (1) or more geographical preferences may be imposed on the required workforce housing units giving preference to qualified residents that live in a specified geographical area surrounding or adjacent to the project or that are employed within a specific geographical area surrounding or adjacent to the project. A geographical preference may also be extended to qualified residents whose immediate family lives in a specified geographical area surrounding or adjacent to the project.

(4) Fourth Priority—Essential Worker Preferences. Essential Worker providing critical community services such as health care, public safety, emergency first response, education, and the provision and maintenance of necessary community infrastructure.

(5) A project that is assisted with government financing may disregard any priority or preference provided by this Chapter that violates Federal fair housing law.

(Ord. No. 860, November 20, 2007; Ord. No. 1081, October 29, 2020; Ord. No. 1159, June 6, 2024)

§ 7A-5.3 Rental Housing.

(a) General Provisions.

(1) Qualified Renter. All County or workforce rental projects are restricted to qualified renters, as defined herein.

(2) Application. Each project shall establish interested households for that project by requiring the interested household to submit a written application provided by the project's management entity and any other documents required to establish eligibility.

(3) Eligibility. The project's management entity shall review all applications to determine eligibility pursuant to the specific project eligibility criteria established for that project. Eligibility records shall be maintained on-site for at least three years and made available on-site to the County, or its representatives, to monitor upon request.

(4) Initial Occupancy Selection.

(A) A public lottery shall be conducted for any project that has more applicants than the number of housing units available in that project to establish the initial occupancy selection list. If the number of housing units available is equal to or greater than the number of applicants, selection may be established by a first-come, first-served basis or by lottery.

(B) The decision to utilize either the lottery or the first-come, first-served process shall be determined by the developer prior to the sales notice date.

(C) A lottery that has multiple preferences shall include all applicants in a single lottery. The selection list will be produced by applying applicant preferences and lottery numbers to sort all applicants into a selection list that has:

(i) The qualified buyer applicant with the lowest selection number (first) being a household that has the highest and the most preferences available and has the lowest lottery number, and

(ii) The qualified buyer applicant with the highest selection number (last) being a household that has no preferences and the highest lottery number.

(D) In a project that utilizes the first-come, first-served method, the developer shall utilize the date and time of receipt of a completed application to establish the chronological order and establish a separate list for each preference available to produce multiple selection lists by preference type.

(E) Projects that are developed in phases shall phase their respective restricted marketing periods and phase their respective application and selection processes.

(5) Waiting List. All County and workforce rental projects shall maintain a waiting list or lists of interested tenants for each bedroom size. The only preference applied after the initial occupancy of the project is the project employee preference. The project may decline to accept additional names to its bedroom size waiting list when the waiting list has an excess of 25 prospective tenants.

(b) Priorities and Preferences.

(1) First Priority—Project Employee Preferences. Fifty percent of the total workforce housing units built by the developer for projects that generate workforce housing requirements of 20 housing units or more shall be rented with a preference to employees of the developer and employees within the development area of the project as determined by the Housing Agency.

(2) Second Priority—Geographical Preferences. At initial occupancy, one (1) or more geographical preferences may be imposed on the required workforce housing units giving preference to qualified residents that live in a specified geographical area surrounding or adjacent to the project or that are employed within a specific geographical area surrounding or adjacent to the project. A geographical preference may also be extended to qualified residents whose immediate family lives in a specified geographical area surrounding or adjacent to the project.

(3) Third Priority—Essential Worker Preferences. Essential Worker providing critical community services such as health care, public safety, emergency first response, education, and the provision and maintenance of necessary community infrastructure.

(4) A project that is assisted with government financing may disregard any priority or preference provided by this Chapter that violates Federal fair housing law.

(Ord. No. 860, November 20, 2007; Ord. No. 1081, October 29, 2020; Ord. No. 1159, June 6, 2024)