U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSING-
FEDERAL HOUSING COMMISSIONER
November 1, 2004
MORTGAGEE LETTER 2004-43
TO: ALL APPROVED MORTGAGEES
SUBJECT: Eligibility of Mortgages on Hawaiian Home Lands Insured
Under Section 247
On June 15, 2004, the Department of Housing and Urban Development
published an interim rule in the Federal Register to implement a
revised definition of the term "native Hawaiian." This was in
response to Section 215 of the Department of Veteran Affairs (VA),
HUD, and Independent Agencies Appropriations Act of 2002 that amended
Section 247 of the National Housing Act (12 USC 1715z-12) and HUD's
rule at 24 CFR 203.43i, "Single-Family Mortgage Insurance on Hawaiian
Effective July 15, 2004, the term native Hawaiian, as used for
mortgages to be insured under Section 247, is defined as "...any
descendant of not less than one-half part of the blood of the races
inhabiting the Hawaiian islands before January 1, 1778, or, in the
case of an individual who is awarded an interest in a lease of
Hawaiian home lands through transfer or succession, such lower
percentage as may be established under section 208 or section 209 of
the Hawaiian Homes Commission Act of 1920 (42 Stat. 111), or under
the corresponding provision of the Constitution of the State of
Section 215 of the Department of Veteran Affairs (VA), HUD, and
Independent Agencies Appropriations Act of 2002 also added subsection
(e) to section 247, which provides that possession of a lease issued
under section 207(a) of the Hawaiian Homes Commission Act of 1920
shall be sufficient to certify eligibility for a mortgage to be
insured under section 247. DHHL has prepared a form, entitled
"Request for Certification of Eligibility," on which DHHL will
certify that the native Hawaiian possesses a homestead lease in good
standing (not cancelled or in default). (See Attachment 1.) The
lender or processing agency will complete the DHHL form and submit it
directly to DHHL for completion. DHHL will issue the completed form
to the lender or the local processing agency, which shall keep it in
the case file. If mortgagees or applicants for a mortgage on a
property in the Hawaiian Home Lands have a question with respect to
the eligibility requirements, they may go to the website at
8.htm or call the Department of Hawaiian Home Lands (DHHL) at
808-586-3802. DHHL is solely responsible for determining eligibility
for a "Certificate of Eligibility" and its subsequent issuance.
The lender must obtain a copy of the homestead lease issued by DHHL
that identifies the proposed mortgagor as the lessee. This will be
either an original homestead lease issued to the proposed mortgagor
or an original homestead lease, along with documentation showing
succession or assignment of the homestead lease to the mortgagor and
DHHL's consent to each and every transfer of the homestead lease.
Any amendments to the original homestead lease must be included as
part of the documentation. All homestead lease documents must bear
evidence of having been recorded at the DHHL.
The homestead lease must be in a form approved by HUD and must include
DHHL's Mortgage Insurance Rider as part of the homestead lease.
Attachment II is a revision to the rider that must be used for
all new mortgage applications for eligible native Hawaiians taken on
or after the date of this Mortgagee Letter. Paragraph (3) has been
revised to read "The Lessor..." rather than "The Lessee..." to be in
compliance with the regulations requiring that DHHL not cancel the
homestead lease without HUD's permission.
The following is a summary of the loan documents unique to the
Section 247 program that must be collected by the lender to establish
the mortgagor's eligibility and included in the insurance binder
submitted to FHA:
1. DHHL Certification of native Hawaiian eligibility and status of
the homestead lease used as security.
2. Homestead lease issued by DHHL and any amendments and assignments
of the homestead lease, with DHHL's Consent to each amendment or
3. DHHL Mortgage Insurance Program Rider.
4. Department of Hawaiian Home Land Mortgage form.
5. DHHL Consent to Mortgage.
The information collection requirements contained in this document
have been approved by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and
assigned OMB control number 2502-0538. In accordance with the
Paperwork Reduction Act, HUD may not conduct or sponsor, and a person
is not required to respond to, a collection of information unless the
collection displays a currently valid OMB control number.
If you have any questions regarding this Mortgagee Letter, please
contact Gayle Ota in the Department's Honolulu Office at (808)
522-8190 or call the Homeownership Center (HOC) in Santa Ana (888)
John C. Weicher
Assistant Secretary for Housing-
Federal Housing Commissioner
Click Here or type Alt-1 for Attachment 1
REQUEST FOR CERTIFICATION OF ELIGIBILITY
PRIVACY ACT NOTICE STATEMENT: The information contained herein is to
be used by the agency collecting it to determine whether you qualify
as a prospective mortgagor for mortgage insurance under the agency's
program. It will not be disclosed outside the agency without your
consent except to financial institutions for verification of your
eligibility and as required and permitted by law. You do not have to
give us this information, but, if you do not, your application for
approval as a prospective mortgagor for mortgage insurance may be
delayed or rejected. This information request is authorized by Title
12, U.S.C., §1701 et. seq.
LENDER OR LOCAL PROCESSING AGENCY: Complete items 1 through 7. Have
applicant complete item 8. Forward directly to the Department of
Hawaiian Home Lands (DHHL).
DHHL: Please complete Parts II and III and return DIRECTLY to Lender
or Local Processing Agency named in Item 2.
PART I - REQUEST
1. TO: Department of Hawaiian Home Lands 2. FROM:
(Name of Lender or Local Processing Agency)
ATTN.: Loan Services Branch
P.O. Box 1879
Honolulu, HI 96805
I CERTIFY THAT THIS CERTIFICATION HAS BEEN SENT DIRECTLY TO DHHL AND
HAS NOT PASSED THROUGH THE HANDS OF THE APPLICANT OR ANY OTHER PARTY.
3. Signature of Lender or Official of 4. Title
Local Processing Agency
6. INFORMATION TO BE CERTIFIED:
Applicant is a native Hawaiian as defined in Section 247 of the
National Housing Act (12 U.S.C. 1715z-12), as amended by PL 107-73
§215. Applicant holds the following homestead lease in good standing
(not cancelled or in default):
Lease No. to TMK: Effective
TO DHHL: I have applied for mortgage insurance and stated that I
have an effective lease on Hawaiian home lands. You are authorized
to verify this information and to supply this lender or local
processing agency identified above with the information requested in
items 9 through 12. DHHL is held harmless by me for furnishing true
and correct information.
7. NAME AND ADDRESS OF APPLICANT 8.
SIGNATURE OF APPLICANT
PART II - TO BE COMPLETED BY DHHL
9. VERIFICATION OF NATIVE HAWAIIAN ANCESTRY: The above named
applicant has been verified as a native Hawaiian as defined in
Section 247 of the National Housing Act (12 U.S.C. 1715z-12), as
amended by PL 107-73 §215, and possesses a homestead lease in good
standing (not cancelled or in default) issued under Section 207(a) of
the Hawaiian Homes Commission Act of 1920, as amended.
10. LEASE INFORMATION: LEASE NO.
COMMENCEMENT DATE OF LEASE:
LEASE RENT: CURRENT? YES
REAL PROPERTY TAXES: CURRENT? YES
_______(LESSEES ARE EXEMPT FROM REAL PROPERTY TAXES FOR SEVEN YEARS
FROM COMMENCEMENT DATE OF LEASE.)__
11. DHHL LOANS OUTSTANDING
NO. OF LATE PMTS.
W/IN LAST 24 MOS.
LOAN NO. DATE OF LOAN ORIGINAL AMT. CURRENT BAL.
INSTALLMENTS 30 60 90
12. ADDITIONAL INFORMATION WHICH MAY BE OF ASSISTANCE IN
DETERMINATION OF CREDIT WORTHINESS: (Please include information on
loans paid in full.)
PART III - CERTIFICATION
13. Signature 14. Title
RETURN DIRECTLY TO LENDER OR LOCAL PROCESSING AGENCY
HAWAIIAN HOME LANDS
MORTGAGE INSURANCE PROGRAM
IT IS HEREBY agreed that the lease to which this rider is attached is
hereby amended and supplemented as follows:
Notwithstanding any provisions to the contrary, this lease may serve
as security for any leasehold mortgage insured or held by the
Secretary of the Department of Housing and Urban Development, and the
following shall apply during such time as the lease serves as such
(1) Any condemnation compensation due the Lessee shall be paid to the
mortgagee to be applied in the same manner as condemnation proceeds
under the terms of the mortgage.
(2) Assignment of this lease is restricted to those persons who have
received certificates issued by the Department of Hawaiian Home Lands
certifying that the assignee or assignees are native Hawaiians as
defined in Section 247 of the National Housing Act.
(3) The Lessor will not cancel this lease without the consent of the
Department of Housing and Urban Development.
(4) Any casualty insurance proceeds are to be applied in accordance
with the provisions of the leasehold mortgage.
IN WITNESS WHEREOF, the parties have executed this rider to
acknowledge the attachment hereof to said lease and the annotation of
said lease with the following statement:
Additional provisions pertaining to the lease when the lease
serves as security for a mortgage insured or held by the Secretary of
Housing and Urban Development are contained in the Department of
Hawaiian Home Lands Mortgage Insurance Program Rider, which is
attached to this lease and made a part thereof.
Dated: ________________, 20_____ STATE OF HAWAII
DEPARTMENT OF HAWAIIAN HOME LANDS
By: ___________________________ By:
LESSEE CHAIRMAN COMMISSIONER
HAWAIIAN HOMES COMMISSION
LEASE NO. ____________________________________
LOT NO. ______________________________________