Citizen or permanent resident alien, be at least eighteen years of age, resident in the state of Hawaii, and physically reside in the housing unit purchased; have sufficient gross household income to qualify for the loan to finance the purchase - these are the basic eligibility requirements for affordable housing in Hawaii. But what does this mean for prospective homebuyers? Let's take a look at the affordable housing requirements in Honolulu and clarify one thing before we start: the affordable housing program is not the same as the reserved housing program commonly seen in Kakaako projects, such as Paradise Painting LLC. The reserved housing program is overseen by the HCDA, another government agency responsible for development in the Kakaako neighborhood. They have some similar eligibility requirements, but the programs are different. The HHFDC or Hawaii Housing Finance and Development Corporation is the agency that oversees all affordable housing in Hawaii.
They also oversee the funding and development of real affordable housing units. To see if you qualify, check out some of the affordable housing FAQs below. There are several components that go into determining a buyer's eligibility status, as well as understanding whether the developer has any specific requirements for their building. An example of how developers introduced their own requirements beyond those required by the HHFDC occurred recently with Korean developer Sam Koo's two projects in Honolulu, Kapiolani Residence and The Central Ala Moana. With Kapiolani Residence (their first project), as long as you earned below the maximum income, you were eligible.
With The Central Ala Moana you had to be below the maximum entry requirement, but also above the minimum income requirement. This eliminated a lot of buyers who received help from a family member, because if you didn't make a certain amount of money, you couldn't buy no matter how much help you might receive. The down payment requirement for Kuilei Place is not known at this time, but for Ililani project only a 5% down payment is required. Some projects are 10%, while others only require 5%. Keep in mind that this is just what the developer requires, your loan agent may require a larger down payment to secure a loan. The repurchase program is one of two programs that are imposed on all new projects sponsored by the HHFDC.
In short, it requires the landlord to occupy the unit as their primary residence for 10 years or the duration of the program. The repurchase program gives the HHFDC the first right to repurchase the unit if the owner is no longer able to occupy it or decides to sell or transfer it during the first 10 years of ownership. At the end of this period, it disappears. If you decide to sell within this period, you'll get a 1% revaluation plus any improvements you've made to your property. Keep in mind that not all projects have a 10-year repurchase restriction - some can last much longer, such as Sky Ala Moana which I've heard will last 30 years.
The SAE or Shared Appreciation Program is designed to help finance future HHFDC affordable housing projects. It provides buyers with an opportunity to purchase a unit at below-market prices and returns a percentage of their profits to the state when they sell it. The sale can only take place after 10-year repurchase period is over and SAE percentage is calculated before closing and never changes. If you're interested in applying for an affordable housing unit, before I start researching what's available and anything about specific condos, I would contact a loan officer. Having a thorough understanding of your financial situation will determine the best way to move forward with these projects - maybe you need to save a little more or that increase you're about to accept will make you exceed your maximum income limit.
Having a plan and being prepared will make this whole buying process less stressful and more enjoyable. Kuilei Place is a project that you should definitely consider if you're looking to buy something in near future - keep in mind that this project is not yet built and it is likely that construction will not begin until end of next year. The typical construction time for project of this size is 28-30 months so get ready to deposit your deposit and be very patient for about four years. Explore latest condo launches in Honolulu - all proposed projects listed below are in Kakaako neighborhood and most of proposed projects include affordable housing units. Malina at Koa Ridge, downtown Oahu also offers affordable housing from time to time - you just have to be prepared and pre-qualified when they go on sale.
We expect 30% of what will be built here to include affordable housing in Kapolei and first offer will come from 2-3 bedroom townhouses in Kaulu by Gentry project which is currently under construction. Newly proposed condo tower on Kapiolani Boulevard consists of 1,005 units of affordable market-rate housing - so if you're looking for an opportunity to purchase something at below-market prices then this could be your chance! Affordable housing in Honolulu has long been a hot topic and often misunderstood - but with right information and preparation anyone can take advantage of these opportunities.
Leave Message