First-Time Home Buyer In Hawaii: Loan And Programs To Know
UPDATED: Sep 10, 2024
Owning a home in Hawaii is a dream shared by many people, but making it happen can be a challenge. The median price of a home in Hawaii is $815,000, which is up from a year ago. When you consider the high cost of living and the price of homes, buying a house in Hawaii may always be a bit more expensive.
To help cover some of the cost, there are state and federal resources that help first-time buyers purchase their dream home in Hawaii.
Who Is Considered A First-Time Home Buyer In Hawaii?
If you haven’t owned a home in the last 3 years, you’re considered a first-time home buyer in Hawaii. If you meet this definition, you may qualify for down payment and closing cost assistance programs.
Hawaii Home Buying At A Glance
Here are some noteworthy statistics on buying a house in Hawaii:
|
Median Sale Price |
$815,000 |
|
Minimum Down Payment |
The minimum down payment is usually 3.5% |
|
Average Credit Score |
620 credit score |
|
Median Household Income |
$84,857 |
Hawaii First-Time Home Buyer Programs
The following resources are some of the first-time home buyer programs and down payment assistance programs available statewide:
- HHOC Mortgage Down Payment Assistance Loan Program
- HHFDC Affordable Resale Program
Hawaii Homeownership Center (HHOC)
The Hawaii Homeownership Center (HHOC) provides education and support to Hawaii first-time home buyers. They do this by providing free workshops and programs and walking you through the process of becoming a homeowner. There’s also foreclosure prevention and rental counseling available to struggling homeowners.
HHOC Mortgage Down Payment Assistance Loan Program
The HHOC Mortgage Down Payment Assistance Loan Program (DPAL) helps moderate- and low-income families purchase their first home. The program provides financing with a minimum 3% down payment, low interest rates, no mortgage insurance and down payment and closing cost assistance.
To qualify:
- You must be considered a low- or moderate-income borrower, which means your income is 120% of the area median income or below.
- HHOC Mortgage must originate the mortgage loan.
- You must complete the first-time home buyer education courses through HHOC.
Hawaii Housing Finance And Development Corporation (HHFDC)
The Hawaii Housing Finance And Development Corporation (HHFDC) provides information and resources on affordable housing in Hawaii. The HHFCD does this through its Affordable Resale Program.
HHFDC Affordable Resale Program
The HHFDC Affordable Resale Program allows first-time home buyers to buy repurchased condominiums.
To qualify, you must:
- Be a first-time home buyer and a Hawaii resident.
- Agree to live in the unit through the time of ownership.
- Meet the median income requirements.
What To Know About Mortgage Loan Limits In Hawaii
Each year, the Federal Housing Finance Agency (FHFA) sets new mortgage loan limits for the upcoming year. But the FHFA does adjust the limit for high-cost areas where the median home price exceeds the limit.
In Hawaii, the conforming loan limit for a single-unit home is $1,149,825.
Home Buying Help In Hawaii By Location
Some first-time home buyer programs and down payment assistance options are based on location. If you’re looking for a home in any of these places, you may be able to take advantage of special assistance options.
- Honolulu: Honolulu provides 0% interest loans that can be used toward your down payment. To qualify, you must be a first-time home buyer and your gross annual income cannot be more than 80% of the median area income.
- Hawaii Island: Hawaii Island is home to the Hawaii Island Community Development Corporation (HICDC), a nonprofit housing developer. The HICDC focuses on providing housing to low- and moderate-income families. If you’re interested in participating in the Self-Help Housing Program, contact the HICDC and they’ll let you know when projects become available.
- Kauai: Kauai offers a program where residents can be placed on a list to buy properties that are either developed directly by the county or privately developed to satisfy a county housing requirement.
- Maui: Maui provides the Maui County Emergency Rental Assistance program to create housing opportunities for low- and moderate-income residents. The program works to develop affordable long-term rental units and increase access to homeownership.
Additional Loan Options For Hawaii First-Time Home Buyers
First-time home buyers in Hawaii can take advantage of several types of loan options. Check out the eligibility criteria and determine which loan option is the best fit for you and your budgetary needs.
- Conventional loans aren’t backed by the government and come with guidelines set by Fannie Mae and Freddie Mac. Conventional loans often come with better loan terms but can be more difficult to qualify for.
- FHA loans are backed by the Federal Housing Administration (FHA), and they’re a good option for low-income borrowers with bad credit. These loans come with low interest rates and low down payment requirements.
- VA loans make homeownership possible for veterans and active-duty service members through the Department of Veterans Affairs (VA). If you qualify, there are no down payment requirements and no private mortgage insurance (PMI).
- USDA loans help low-income borrowers looking to buy a home in qualified rural areas through the U.S. Department of Agriculture (USDA). There are no down payment requirements, but you must meet the income requirements to qualify.
Tips For First-Time Home Buyers In Hawaii
Don’t let home buying stress you out. Check out some first-time home buyer tips for those house hunting in Hawaii.
Set A Budget
Before you start looking at houses, it’s important to know the type of home you can afford. Spend some time thinking about how much you can put toward a down payment, closing costs and moving costs. When estimating your monthly mortgage payments, don’t forget about things like PMI. Setting a budget will give you a more accurate idea of what you can afford.
Get Preapproved
Once you know how much home you can afford, it’s time to get preapproval for a mortgage. When you get preapproved, your lender takes a closer look at your financial situation and lets you know the maximum loan amount you qualify for. Receiving a preapproval letter lets sellers know you’re a serious home buyer.
Work With A Real Estate Agent
As a first-time home buyer, you can benefit from working with a qualified real estate agent. The right real estate agent will find appropriate listings for you, can advise you on the home buying process, and negotiate with the seller on your behalf. You can find a real estate agent by asking for recommendations from friends and family or through Rocket HomesSM.
Start Looking For Your Home
Now you’re ready to find a home that you want to make an offer on. As you’re looking, make sure you stay within the budget you set for yourself, even if you were preapproved for more money. Many other costs come with homeownership, so you don’t want to stretch yourself to the max on your monthly mortgage payments.
FAQs: Hawaii First-Time Home Buyer
Below are some of the most commonly asked questions about being a first-time home buyer in the Aloha State.
How do I buy my first home in Hawaii?
To buy a house in Hawaii, you should start by coming up with a budget and getting preapproved for a mortgage. From there, you can start looking for homes to make an offer on.
What is the minimum down payment for a house in Hawaii?
Most lenders require a minimum down payment of 3.5%, though there are exceptions if you qualify for a VA or USDA loan.
What credit score do I need to buy a house in Hawaii?
You’ll need at least a credit score of 620 or higher unless you qualify for specific government-backed programs.
Does Hawaii offer first-time veteran home buyer assistance?
HHOC Mortgage does offer a VA loan that you can pair with a second deferred mortgage if necessary.
The Bottom Line
Buying a home in Hawaii as a first-time home buyer can be expensive, but it is possible. There are local and federal programs available to provide low-cost loans and down payment and closing cost assistance.
If you’re ready to begin your home buying journey, you can start an application online today.
Jamie Johnson
Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.
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