The Hawaii Housing Finance and Development Corporation is bringing back its first-time homebuyer finance program. The last time it was offered was over a decade ago.
The Hale Kama'āina Mortgage Program offers qualified first-time home buyers below-market mortgages. Some of the requirements include being a state resident, being over the age of 18, and not owning any property within the last three years.
HHFDC Executive Director Dean Minakami explained that bringing back the program is an important step forward in helping locals afford to live here.
“W e really saw a need to reactivate this program because we saw many people leaving the state because they didn't see a path towards home ownership here,” he said.
“Of course, one of the reasons that folks can't afford a home in Hawaiʻi is because of the rise in interest rates that occurred in the past several years, and that coupled with the difficulty in coming up with a down payment. So when interest rates rose, staff here pretty quickly got together and relaunched this mortgage program.”
The Hale Kama'āina Mortgage interest rate can be as low as 5.4%, while private rates have increased to over 6%. That could be hundreds of dollars of savings a month.
The property price and buyer income limits to participate in the program vary depending on the area. For example, the Kapahulu area on Oʻahu is one of the “targeted areas,” so the price limit on a property there is $989,377. The price limit in a non-targeted area would be $809,458.
Minakami added that the fees through the Hale Kama'āina Mortgage Program are lower than traditional mortgages.
The program is being funded through bonds and will have enough initial funds for $30 million worth of mortgages.
“ They expect that'll last for only maybe a quarter or two at most,” Minakami said.
“And we'll be keeping an eye on how quickly funds are being drawn down, and when funds are drawn down, we're going to issue more bonds to fund the program.”
If interest rates drop, Minakami explained that HHFDC would match the drop rate so it can continue to offer below market-rate mortgages. For example, if next year, interest rates have dropped by a quarter of a percentage point, HHFDC will do another bond issuance and the Hale Kama'āina Program interest rate will also drop about a quarter of a percentage point.
