NAHADZA asks commission to advance trust funds as federal grant timing remains uncertain

NAHADZA (Nahazda) government relations staff outlined program needs and a request to advance trust funds to cover homeowner financing and turnkey projects while awaiting federal grant disbursements.

Government relations specialist Lewa Kino reported a current NAHADZA block-grant balance of under $3 million (as of June 3) and said staff project block-grant receipt of roughly $25.2 million in July 2026 after processing HUD award paperwork. Kino said NAHADZA has two concurrent turnkey projects (Pu Hona and EK2C) and anticipated demand for homeowner financing and rental subsidies. He said projected FY27 expenditures are tight (staff cited approximately $25.255 million in planned spending) and asked the commission to consider an advance from the Hawaiian Home Trust Fund to bridge cash-flow timing risks for projects including the 41 of 53 families in Kulo Kahi.

Kino described leveraging strategies that reduce per-unit trust-fund costs by combining DHHL commitments with developer financing, revenue bonds and tax credits; he also explained that a requested $2.4 million letter of commitment to a developer leverages $14.75 million in revenue bonds and tax credit investments. On grant timing, Kino said the President's FY27 budget initially zeroed HUD Native Hawaiian Housing Block Grant funding and that subsequent Congressional actions are uncertain, which makes the timing of federal disbursements unpredictable. He described conversations with Congressional staff and HUD about pre-award cost rules and emphasized that any pre-award costs are incurred at DHHL's risk until federal grants are formally executed.

Why it matters: advancing trust funds could allow construction and loan programs to proceed without delay, but doing so would expose the trust to repayment risk if federal appropriations are delayed or reduced. Kino said the department intends to repay any advance if future federal appropriations materialize and proposed a repayment time horizon through FY2030.

Kino closed by noting he will return for the commission action item and that NAHADZA would prefer advances to avoid program interruptions while HUD funding is finalized.