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Hawaii First-Time Homebuyer Programs

It can be overwhelming to navigate the process of buying your first home in Hawaii.

Not only is it complicated, but the upfront costs can put a dent in your wallet. Don’t fear, however — you may be able to qualify for some kind of assistance as you start on the path to homeownership. First, of course, you need know where to look for that help.

In this guide, we will cover:

Hawaii first-time homebuyer programs

The statewide Hawaii Housing Finance & Development Corporation (HHFDC) has programs designed specifically for first-time homebuyers. It also offers affordable units for purchase through a lottery system and mortgage credit certificates, which can reduce the amount of federal income tax you pay.

In addition, the Hawaii HomeOwnership Center (HHOC), the state’s only nonprofit mortgage lender, offers a down payment assistance loan for first-time homebuyers. Many counties in Hawaii offer specific programs targeting first-time buyers, too.

In January 2019, we researched current programs for first-time homebuyer programs in Hawaii, which included reviewing program websites and Hawaii Housing Finance & Development Corporation guidelines. Here’s what first-time homebuyers in Hawaii need to know.

Eligibility for Hawaii assistance

All of Hawaii’s mortgage assistance programs require purchasers to meet specific income guidelines, and the mortgages can only be used for principal residences. Read on to learn more about each program and its eligibility guidelines.

Note: You can check current mortgage rates for your area here.

HHFDC affordable resale program

Features

  • Properties range from a $250,000 studio with parking space to a $500,000 three-bedroom, 2.5-bath, single-family unit.
  • Units located in specific government-sponsored developments.
  • Awarded by lottery system.

Eligibility

  • U.S. citizen or resident alien
  • At least 18 years old
  • Resident of Hawaii
  • Will reside in the unit
  • Meet income requirements
  • Do not currently own a home or residence
  • Units subject to HHFDC’s 10-year Buyback Program and Shared Appreciation Equity (SAE) Program restrictions

How it works

The Hawaii Housing Finance & Development Corporation owns and sells both single-family homes and condominium units for qualified low-income buyers. The properties, ranging from $250,000 studios to $500,000 three-bedroom, single-family homes, are made available to qualified buyers through a lottery system. You can download the application at their website.

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HHFDC mortgage credit certificate

Features

  • Tax credit reduces amount of income tax owed annually
  • Remains in effect for the life of the loan
  • Provides a deduction of up to 20% of annual mortgage interest

Eligibility

  • Home must be a principal residence
  • Borrower can’t have owned a home in the past three years
  • Mortgage must be a new loan
  • Subject to income and purchase price limits, depending on county of residence
  • Application and processing fee required

How it works

The HHFDC offers a mortgage credit certificate that reduces the amount of federal income tax you pay. A homeowner with a mortgage credit certificate qualifies for a tax credit worth 20% of their annual mortgage interest. The remaining 80% will still qualify as an itemized tax deduction. Borrowers must obtain the mortgage through qualified lenders listed here.

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HHOC Mortgage’s down payment assistance loan program

Features

  • 5% down payment
  • Low monthly payment
  • No mortgage insurance
  • No prepayment penalty
  • Maximum loan amount of $75,000

Eligibility

  • First-time buyers or buyers who haven’t owned a home in three years
  • Must be for a principal residence
  • Must meet income requirements, which vary by county
  • Must meet loan guidelines
  • Must complete nine hours of homebuyer education
  • Must complete one counseling session

How it works

An affiliate of the nonprofit Hawaii HomeOwnership Center, HHOC Mortgage offers financing that requires a low, 5% down payment. HHOC Mortgage helps connect buyers with a wide range of mortgage products, from conventional mortgages to FHA, VA and USDA loans. The maximum amount of a down payment assistance loan is $75,000. Talk to a loan officer at HHOC Mortgage to determine your eligibility.

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County of Maui’s first-time homebuyer’s down payment assistance program

Features

  • Loans of up to $30,000 to help cover down payments on properties in Maui County
  • Awarded by lottery

Eligibility

  • Completed application and credit preapproval letter required; check website for lottery dates
  • Resident of Maui
  • U.S. citizen or resident alien
  • At least 18 years old
  • Household income must be 140% or less of the county’s median annual income
  • Borrower must not have owned a home for at least three years
  • Total assets not to exceed $75,000

How it works

Maui residents can seek down payment assistance through Maui County’s housing division. Applicants will be chosen through a lottery process. The maximum amount granted is $30,000. Check here for program deadlines.

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Kaua‘i homebuyer loan program

Features

  • Low-cost loans to first-time homebuyers on the island of Kaua’i
  • Both primary and gap mortgages available

Eligibility

  • U.S. citizen or resident alien
  • At least 18 years old
  • First-time homebuyer
  • Property is primary residence
  • Borrower must complete homebuyer education program
  • Preference is given to Kaua’i residents
  • Borrower must meet Kaua’i median household income limits

How it works

The County of Kaua‘i offers low-cost primary and gap mortgages to qualified first-time homebuyers on the island of Kaua‘i. The maximum amount allotted is $450,000 for a primary mortgage and $150,000 for a gap mortgage. You can apply using the Kaua‘i Resident Affordable Home Buyer Registration Form once you have completed the homebuyer education program.

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City and County of Honolulu down payment loans

Features

  • 0% interest
  • No fee
  • Loan of up to $40,000
  • First come, first served

Eligibility

  • Home must be located on Oahu
  • Income must fall at or below 80% of Honolulu median income (check here)
  • Home must pass housing standards inspection
  • Must be owner-occupied
  • Borrower must complete homebuyer education program

How it works

Honolulu’s Department of Community Services offers zero-interest, no-fee down payment loans to low- and moderate-income homebuyers in Oahu. The maximum amount allotted is $40,000, and the loans are given on a first-come, first-served basis. Let your lender know you are interested in this program; your lender can submit your file to the city to get approval.

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National first-time homebuyer programs

Many first-time homebuyers in Hawaii can benefit from the USDA loan program for rural housing, as there are many desirable areas of the state’s islands that qualify as “rural” per federal guidelines. You can also obtain FHA loans, VA loans, Freddie Mac and Fannie Mae loans and others. More information on national first-time homebuyer programs can be found here.

 

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