Another workforce housing project has had prospective affordable homebuyers pre-qualify for home loans through a developer-approved lender — despite the Maui County Code calling for such vetting to be done by the applicant’s choice of lender.

Online marketing materials for the 33-home Kaiaulu Maui project in Kaanapali say that home applicants must, among other things, “pre-qualify for a loan with the developer’s approved lender, HomeStreet Bank.”

The project is being developed by Aina Lani Pacific LLC. Its president, Howard Kihune Jr., released a statement Friday after being asked about the conflict between the wording of the county’s workforce housing ordinance and Kaiaulu’s eligibility criteria for prospective homebuyers.

“Aina Lani Pacific did not disqualify any potential buyers regardless of their lender pre-qualification,” Kihune said via email. “HomeStreet Bank is the developer’s preferred lender because they have a tremendous amount of experience with ‘workforce housing’ and its buyer criteria here on Maui.”

All 33 homes had been sold as of Friday, he said. Thirty-two of the 33 buyers are from West Maui.

Buyers will be closing their homes in 2017, and “have their choice of lender to close their purchase,” Kihune said. “A majority of applicants used HomeStreet to pre-qualify. We also have a wait list of qualified buyers for the project.”

Project home prices start at $395,000 for below-moderate-income buyers and rise to $649,000 for above-moderate-income buyers, he said. Ten of the 33 homes are priced for below-moderate-income buyers, 17 moderate and six above-moderate.

The issue of whether developers are strictly complying with the county’s workforce housing ordinance’s pre-qualification provision surfaced this month with questions from Maui County Council Member Elle Cochran of West Maui. She raised the issue in connection with two A&B Properties workforce housing projects — Nov. 3 during a meeting of the council’s Housing, Human Services and Transportation Committee and Wednesday during a Land Use Committee meeting.

Cochran cited marketing materials for A&B Properties’ Kamalani subdivision in north Kihei that called for pre-qualification by developer-approved lenders, instead of the prospective homebuyer’s choice of lender as provided for by the ordinance.

On Thursday, A&B Properties Vice President Grant Chun said there had been a “misunderstanding” about the wording of the Kamalani marketing materials, and that home applicants could choose their own lenders for loan pre-qualification.

The project’s marketing material would be revised to clear up the problem, he said.

As of Saturday, the developer-approved lender language had been removed from Kamalani’s online marketing materials.

Buyers still need to obtain a loan pre-qualification letter, but the developer’s website no longer says that the “developer reserves the right to require the applicant obtain the pre-qualification letter from a list of developer-approved lenders.”

On Friday, Cochran said she was continuing to look into developer compliance with the county’s workforce housing ordinance and was waiting to “get a direct answer from corporation counsel,” the county’s legal advisers.

So far, she said, her office was looking at the Kamalani and Kaiaulu projects. She said it’s her understanding that the Kaiaulu project is connected with Bach Corp.’s requirement to provide a dozen workforce housing units in connection with its 158-unit Wailele Ridge development in Napili.

If developers are not complying with the pre-qualification provision of the workforce housing ordinance, then “we need to nip it,” she said. Otherwise, “who’s going to put the hammer down?”

Cochran said that if it’s found that prospective affordable homebuyers were turned away because they didn’t pre-qualify with a developer’s preferred lender, then the homebuyer application process should be redone.

“I believe it would be only fair and proper to use the ordinance as it was prescribed, as it was written by law,” she said.

Cochran said she hopes applicants for affordable homes would be contacted and told: “Please come back with your choice of lender for a pre-qualification letter.”

“That’s what I would like to see.”

Cochran said she’s received complaints from nearly a half-dozen “frustrated constituents” who tried and failed to pre-qualify for homes. She said A&B’s chosen lenders for its Kamalani project have been “very restrictive” and “very conservative” about pre-qualifying prospective homebuyers.

County Corporation Counsel Patrick Wong confirmed Friday that Maui County would require developers to comply with the workforce housing section calling for loan pre-qualification from the applicant’s choice of lender.

However, “we are unaware of any applicants that may fit your reference of being required to pre-qualify for loans with a developer-approved lender. Please have anyone that may fit your referenced category of applicant contact my office.”

The phone number for the Department of the Corporation Counsel is 270-7740.

There is nothing in the ordinance that requires a developer to redo its prospective homebuyer-vetting process or its offering to buyers, he said.

Wong provided The Maui News with copies of A&B’s residential workforce housing agreement for Kamalani. He said his review of the document confirmed “that there is no contravention of MCC 2.96.090(B)6,” which is the section that provides for loan pre-qualification from the applicant’s choice of lender.

Regarding homebuyer applicant pre-qualification, the Kamalani workforce housing agreement’s section on eligibility says an applicant must “have pre-qualified for a loan and obtained a pre-qualification letter setting forth the maximum amount of the pre-qualified loan.”

* Brian Perry can be reached at bperry@mauinews.com.