§207-3  Purpose for and terms of loans. Loans of state funds made pursuant to this part may be granted only forconstruction of residences upon the premises.  Loans shall be secured by amortgage which may be subordinate only to another mortgage given to a lendinginstitution as security for a loan for the purpose provided above.  Loans shallbe made to relieve the burden of the required down payment or to extend theperiod over which monthly payments would be required upon a finding that theapplicant's income would not otherwise reasonably support such payments.

Loans shall not exceed twenty-five per cent ofthe cost of the improvements, and in no case shall any loan exceed $5,000.  Thedirector of finance shall by appropriate regulation establish the interest rateon the state loan and may authorize repayment upon such terms as the directorof finance deems appropriate but in no case shall the payments extend beyondforty years. [L 1961, c 194, §4; am L 1963, c 114, §1; Supp, §98L-4; HRS§207-3; gen ch 1985]