Hawaii Homeowner Incentive Programs
$75,000
About the Program
The Hale Kama’āina Mortgage Program (the “Program”) is a mortgage finance program designed to help first-time homebuyers in the State of Hawaii achieve affordable homeownership. The Program offers competitive fixed-rate 30-year mortgages (Mortgage loans) and optional down payment assistance loans (DPA loans) to eligible borrowers. How does the Program work? Interested first-time homebuyers will apply for mortgage loans through a participating lender (Lender). The Lender will accept and review your application to determine if you qualify for the Program. If you qualify for the Program, the Lender will process your loan application and conduct a closing for you to purchase your home. What are the Mortgage loan terms? The Mortgage loan terms include a competitive fixed interest rate for 30 years. The interest rate is based on loan type (government or conventional) and whether the borrower is receiving a DPA loan.
What are the DPA loan terms?
Each qualifying borrower will have the option to receive a 4% DPA loan. The DPA loan will be a second mortgage and accrue simple interest at a rate of 1% per year. The DPA loan will not require period payments. The DPA loan will be due in full upon Mortgage loan maturity, sale, refinance, or other qualifying event of the home. The DPA loan interest may be forgiven at HHFDC’s discretion if the borrower maintains full compliance with the terms of the Mortgage and DPA loans for at least 10 years. Forgiveness is determined at loan maturity or early payoff. The DPA loan principal balance is not forgivable and must be repaid. Who qualifies as a borrower? A borrower qualifies for the Program if all the following eligibility criteria are met:
1. First-time Homebuyer – the qualified borrower, including the spouse, must not have owned or held any interest in a principal residence within the past three (3) years
2. Household Income within limits
3. U.S. Citizen or Resident Alien
4. Bona fide resident of Hawaii
5. At least eighteen years of age
6. Received Recapture Tax Notice
7. Is financing a property that will be the eligible borrower’s principal residence
8. Successfully completed a homeownership counseling program through a housing counseling agency approved by the United States Department of Housing and Urban Development
9. Does not own in fee simple or leasehold, any other residential property within the State (DPA only)
10. Has not previously received a DPA loan through HHFDC’s previous DPA program under repealed Chapter 15-169 entitled Downpayment Loan Program (DPA only)
Important: Exceptions to the first-time homebuyer requirement may be granted for Veterans and/or purchases in targeted areas. Targeted areas are economically disadvantaged areas for which household income and purchase price limits may be higher to increase borrower access. Consult a Lender for more information
What type of property may be purchased?
Properties that can be purchased through the Program include new or existing single-family residences, townhomes, PUD’s and condominiums. The property must be located within the State of Hawaii, be within the Program purchase price limits and have a remaining useful life of at least 30 years. The qualified borrower must intend to occupy the property within 60 days of loan closing and maintain the property as their primary residence for the duration of the mortgage loan.
What about leasehold residences?
For leasehold properties, the remaining term of the lease must be at least 35 years and the lease rent must be fixed for no less than 10 years from the date of the Mortgage Loan (see your Lender for details). Are there other restrictions?
1. You must be an owner-occupant for the duration of the Mortgage loan or until the loan is paid in full. This provision is strictly enforced, and violation may cause the entire loan balance to become immediately due. HHFDC may grant a waiver of the owner-occupant requirement for a period not to exceed three years based on hardship, including but not limited to unforeseeable job or military transfer, serious illness of the qualified borrower, or any other hardship circumstance that HHFDC may determine on a case-by-case basis at its sole discretion.
2. Hale Kamaʻāina Mortgage Loans must be secured by the property to be purchased through first and second lien position as applicable for Mortgage loans and DPA loans, respectively.
3. Hale Kamaʻāina Mortgage Loans cannot be used to:
- a. refinance existing mortgages
- b. convert agreements of sale
- c. purchase fee simple title to leasehold properties
Are there any restrictions on selling a home that is financed with a Hale Kamaʻāina Mortgage Loan? Your mortgage loan will be financed with tax-exempt bond proceeds, which allows you to benefit from a lower interest rate than is customarily charged on other mortgage loans. Should you sell or otherwise dispose of your home within nine years of purchase, this benefit may be “recaptured”.
A recapture may occur if your household income increases above program limits, and by at least 5% each year for the first nine years, and you sell your home for a gain within the nine years of purchase.
Consult with a tax advisor for guidance. Qualified borrowers will receive recapture notices at loan pre-closing and loan closing.
Explore Communities Across Hawaii
You've learned about the program. Now explore communities across Hawaii to find the place that best fits your lifestyle, priorities, and goals.
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