Section 6-27-20 - Security for loans(a) Member home loans shall be secured by: (1) First mortgages on unencumbered improved real estate owned in fee simple; or(2) First mortgages on leasehold interests in improved real estate.(b) Leasehold conversion loans shall be secured by a first mortgage on the fee simple interest and a second mortgage on the leasehold interest on improved real estate. For the purpose of this section, improved real estate owned in fee simple is unencumbered notwithstanding the existence of:
(1) Instruments reserving mineral, oil, timber, or similar rights, rights of way, sewer rights, rights in walls;(2) Any liens for taxes or assessments not yet due;(3) Liens not delinquent for community recreation facilities or for the maintenance of community facilities;(4) Building restrictions or other restrictive covenants common to the community in which the property is located;(5) Liens for service and maintenance of water rights where not delinquent.[Eff 2/9/89] (Auth: HRS §§ 88-28, 88-119) (Imp: HRS §§ 88-119, 88-119.5)