Housing prices in Hawai‚Äôi are among the most expensive in the nation, which can make buying your first home in the state extraordinarily difficult. However, Hawai‚Äôi‚Äôs residents may be able to take advantage of state- and county-level programs designed to make homeownership more accessible.
Most of these programs require homebuyers to have moderate or low income, and applicants must meet the formal definition of first-time homebuyer. That means buyers can‚Äôt have owned residential real estate in the past three years.
Hawai‚Äôi‚Äôs first-time homebuyer programs are also considered affordable housing programs. These are programs designed to help residents buy a family home in their local market. The broadest first-time homebuyer programs are administered through Hawai‚Äôi Housing Finance and Development Corporation (HHFDC). The HHFDC is the primary agency in charge of developing affordable housing in Hawai‚Äôi.
In addition to state-level agencies, first-time buyers in Hawai‚Äôi can find local programs administered through local agencies. For example, the Hawai‚Äôi Community Development Authority (HCDA) provides affordable housing in the Kaka‚Äôako area. Kaua‚Äôi, Maui and Honolulu counties also offer homebuying programs for their residents.
The exact requirements for financial assistance depend on the program. However, for most first-time homebuyer programs in Hawai‚Äôi, buyers must be either low or moderate income buyers (earning less than 140% of the area‚Äôs median income). Additionally, buyers may not have owned a home in the last three years.
The Reserved Housing program was created to increase the availability and affordability of homeownership for low- and moderate-income people in Kaka‚Äôako. Under the Reserved Housing program, certain housing developments sell at least three-quarters of their units to people earning less than 140% of Honolulu‚Äôs median income. If you qualify to buy a home under the program, your monthly payment will be less than one-third of your monthly income.
To qualify, you must
This program is only available after a qualified housing development is complete. You‚Äôll find out that a specific housing development is accepting applications through an announcement in a widely circulated newspaper (such as the Honolulu Star).
The announcement will include information about the availability of housing and how to apply for the program. You may need to be prequalified for a home mortgage with a specific lender to complete your application.
Once you‚Äôve submitted a completed application, you‚Äôll become eligible for a unit. Housing units are sold to eligible participants on a first-come, first-served basis or through a lottery drawing.
Under the HHFDC Affordable Resale Program, eligible people can purchase a housing unit for below market rate. In exchange for purchasing a low cost housing unit, homeowners share future equity gains with the state of Hawai‚Äôi.
To qualify, you must
If you want to buy a house in one of the government-sponsored developments, you can learn more through the Locations Hawai‚Äôi website. After filling out a short form at the bottom of the webpage, the real estate agency will send you more information and an application for the program.
In Hawai‚Äôi, people eligible for the Mortgage Credit Certificate can claim a federal tax credit for 20% of the interest that they pay on their primary home mortgage.
To qualify, you must
MCCs are only available through certain lenders in Hawai‚Äôi. When you‚Äôre taking out a home mortgage, ask the lender about the Mortgage Certificate Credit. The lender will give you the information you need to apply for the MCC. When you file your taxes, you will need to fill out IRS form 8396 to claim your credit.
To qualify, you must
The 0% interest loans are distributed on a first-come, first-served basis. To apply for a down payment loan, you must take homebuyer education class. After you complete the class, you can apply for a home mortgage through a bank or credit union.
When you‚Äôre applying for your home mortgage, let the lender know that you‚Äôre interested in a down payment loan from the city of Honolulu. The lender must submit your loan file to the city, and the city will approve you for the loan (if you meet the requirements).
Through the Kaua‚Äôi Home Buyer Loan program, eligible borrowers can finance up to $450,000 on a low-interest loan with no mortgage insurance.
Before you can apply for a low-cost mortgage, you must complete a homebuyer education class. After completing the class, you can submit a Kaua‚Äėi Resident Affordable Home Buyer Registration Form. After that, you‚Äôll be added to an affordable housing waitlist. Once you‚Äôre on this list, you‚Äôll receive updates about homes that are for sale (or under development). The notifications will also tell you whether you‚Äôre eligible to buy the properties.
Each year, Maui County offers grants of up to $30,000 to help first-time buyers cover down payment and closing costs. These grants only have to be repaid when the buyer sells, refinances or moves out of the house.
In order to qualify you must
The grants are distributed through a lottery system. To enter the lottery, you must pick up an application from the County‚Äôs Housing Division Administration office (2065 Main Street Suite 108, Wailuku).
In addition to filling out the application, you must get a preapproval letter from a mortgage lender. The application and the preapproval letter must be delivered to the Housing Division Administration office (either by mail or hand delivered).
In 2019, the deadline for the grant was January 4, 2019. No information is available yet for the 2020 program.
The state and county programs in Hawai‚Äôi make buying your first home much more accessible, especially if you‚Äôre a low- or moderate-income earner. But these aren‚Äôt the only programs available to you. First-time buyers can combine the Hawai‚Äôian programs with national programs to make homebuying even more accessible.
Most of the national programs are loan programs, which can be used to buy some of Hawai‚Äôi‚Äôs affordable housing units. The loans available on a national level may also be combined with some of Hawai‚Äôi‚Äôs down payment loans and grants.
This article contains links to LendingTree, our parent company.