Tuesday, December 22, 1998

City studies
loan linked to

The city makes a $13,000
error in charging Donna Kim's
parents no interest and a
low home-loan rate

By Gordon Y.K. Pang


City attorneys are investigating whether the parents of Councilwoman Donna Mercado Kim owe about $13,000 on a home loan that was improperly calculated by the city.

The initial $33,000 borrowed by Andrew and Lily Kim for improvements on their Moanalua home came out of the city's rehabilitation loan program in 1993.

After a media inquiry last week, it was discovered that the Kims should have been paying 4 percent interest on the loan, or about $244 a month, including part of the principal, city spokeswoman Carol Costa said.

Instead, they have been paying no interest and $25 each month under a "partially deferred payment" system, Costa said.

Different payment rates are offered, based on income. The Kims received additional income that mistakenly had not been calculated, said Costa.

Because the mistake was made by the city, Costa said, the corporation counsel's office is looking into the matter to determine whether the Kims need to pay some, or all, of the miscalculated amount.

Attorneys also will determine whether the Kims need to pay the correct monthly amount and interest, she said.

Councilwoman Kim is of town for the holidays and could not be reached for comment. Andrew and Lily Kim had no comment last night.

The rehabilitation loan program lends as much as $60,000 in federal housing money to low- and moderate-income owner-occupants for improvements such as repairs and reroofing. Rates may reach 6 percent, depending on gross household income of owner-occupants.

Costa noted while Donna Kim is a co-owner of the house, she does not live there and her income does not factor into the calculation.

About 50 loans made to other homeowners in recent years also were checked randomly during the weekend, Costa said. Of those, only one had a "minor discrepancy," although Costa said she did not know the specifics.

Mayor Jeremy Harris' administration began looking into the rehabilitation loans after reports that the program was being investigated by city prosecutors in connection with the Ewa Villages scandal involving misused city relocation funds.

Police and prosecutors have not found evidence of criminal wrongdoing involving the rehabilitation program, Deputy Prosecuting Attorney Christopher Young said.

Nonetheless, he said, "we are continuing to investigate all projects involving (fired city housing official) Michael Kahapea and any other players involved in the Ewa Villages investigation."

Costa said there is no connection between the Kim discrepancy and any prosecutorial investigation.

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