Are Prepayment Penalties allowed on DSCR Loans in Hawaii?

[Robin Simon]

🤔🤔🤔 Are Prepayment Penalties Allowed on DSCR Loans in Hawaii?

🌈🌈 🌈 Yes, Prepayment Penalties are Fully Allowed with no restrictions for DSCR Loans in Hawaii. Hawaii law contains consumer protections under HRS § 454F-1, which only cover residential mortgage loans for personal, family or household use, which fall outside of the scope of DSCR Loans, which are for business use (i.e. rental properties) only. As such, DSCR Lenders can typically offer all standard prepayment penalty options such as Descending Prepay Penalties (i.e. "3/2/1"), Flat Prepay (i.e. 5/5/5/5/5) or California-Style (i.e. 6 Months Interest, 20% Freely Prepayable, 5 Year Duration) in the Aloha State.

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