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Hawaii First-Time Home Buyer Programs of 2019

July 27, 2018
Finding the Right Mortgage, Mortgages
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Many people dream of living in Hawaii — it’s a tropical paradise with a laid-back vibe. But life in paradise can be expensive, especially for first-time home buyers.

National mortgage options, along with programs offered by the Hawaii Housing Finance and Development Corporation, or HHFDC, can make homeownership more accessible to first-time buyers in the Aloha State.

National first-time home buyer loans

These nationally available loans are often a good fit for first-time home buyers because they offer more relaxed credit score and down payment requirements.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit

» MORE:  Tips for first-time home buyers

Hawaii first-time home buyer programs

The HHFDC doesn’t offer loans or down payment assistance for first-time home buyers, but it does have two programs — Affordable Resale and Mortgage Credit Certificate — designed to make buying a home in Hawaii less expensive.

HHFDC highlights and eligibility requirements

Highlights

  • Below market price on HHFDC-owned properties, awarded by lottery.
  • Co-mortgagor, co-signer and gifts allowed.
  • Tax credits available through select lenders.

Eligibility

  • Must be a “qualified resident.”
  • Must meet income requirements, which vary by household size.
  • Must be pre-qualified for a home loan.
  • Must be a resident of Hawaii and live in the unit purchased.

» MORE: Get a mortgage prequalification

Affordable Resale Program

State program

Learn more

at HHFDC

What you need to know

Qualified residents of Hawaii can buy housing units from the HHFDC at below market prices — from $250,000 for a studio to $500,000 for a three-bedroom single-family home — through the Affordable Resale Program. HHFDC defines a qualified resident as a U.S. citizen or resident alien who is at least 18

 

Mortgage credit certificate

State program

Learn more

at HHFDC

Best for

Tax credits

What you need to know

The HHFDC mortgage credit certificate program, or MCC, is open to all Hawaii home buyers through select participating lenders. The MCC allows homeowners to recoup up to 20% of their annual mortgage interest as a federal tax credit. To be eligible, you must meet income and purchase price limits,

Your next step

To learn more about any of the programs listed above, contact the HHFDC or visit the website. There, you’ll be able to request an application for the Affordable Resale Program and see lenders who participate in the MCC program.

» MORE: See the best lenders for first-time home buyers

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