The Federal Housing Administration was created by the National Housing Act and approved on June 27, 1934. The FHA was established to encourage improvements in housing standards and conditions, and to provide an adequate home financing system by insuring mortgages. The FHA does not make loans or build homes, but operates insurance programs which provide protection against loss due to foreclosure on home mortgages made by private lending institutions. The most common type of FHA financing is the fixed rate mortgage which is insured under Section 203B. Both fixed rate and adjustable rate programs are available. Financing is also available for attached townhomes, FHA approved condominiums, and duplexes. Check with your REALTOR® or lender for loan limits. Down payment requirements vary depending on the loan amount and are approximately 4-6% of the sales price or appraised value, whichever is lower. For specific details, it will be necessary to know who is paying what closing costs, and you will need to consult your REALTOR® or mortgage broker. The amount of mortgage insurance premium depends on a number of different factors. Check with your REALTOR® or mortgage lender for details.
Effective October 19, 2005, the maximum FHA mortgage limits increased for Hawaii and Maui Counties. New limits are as follows: Hawaii County - One Family $391,850, Two-Family $441,350, Three-Family $536,250 and Four-Family $618,750; Maui County - One Family $469,342, Two-Family $575,650, Three-Family $699,400 and Four-Family $807,000. The new limits represent a 3 to 12 percent increase from previous limits that were increased in June. Effective January 1, 2006, the maximum mortgage limits also increased for Honolulu County: One Family $544,185, Two-Family $658,106, Three-Family $799,568 and Four-Family $922,578. These increases reflect Hawaii's current active real estate market. These higher mortgage limits will enable more individuals to obtain adequate FHA financing contributing to homeownership in the State. For FHA mortgage limits on the web go to https://entp.hud.gov/idapp/html/hicost1.cfm. Another nice characteristic of the FHA instrument is that it is assumable by future home buyers if they qualify. For more information about FHA mortgages, consult your REALTOR® or mortgage lender. You can visit the US Department of Housing and Urban Development website here (select "Hawaii" from the states list, then select "Homeownership" in the submenu).
Another method used to finance the purchase of your home is Owner Financing, often referred to as a Purchase Money Mortgage. This is a mortgage held by the seller of the property to facilitate the sale. In some cases the seller will use the Purchase Money Mortgage as an investment vehicle. It is likely that an owner held mortgage will have more favorable interest rates and terms than conventional or government loans. Whichever type of financing you choose, get all the facts before you commit. You may obtain assistance in the financing of your home through a REALTOR®, mortgage banker, commercial bank, savings and loan association, credit union or mortgage broker.
A homeowner who needs to repair his or her primary home, but cannot afford the high costs, may qualify for the City’s Rehabilitation Loan Program. The program offers a low interest rate loan to low- and moderate-income qualified applicants. Loan funds can be used for re-roofing, electrical rewiring, plumbing, painting, termite treatment or any other health and safety related repairs. Improvements are also allowed to accommodate persons with disabilities.
Any homeowner who has a need to make essential repairs to his or her primary home and the total household income for the residence is at or below 80% of the area median income for Oahu. The 2010 income eligibility limits are listed:
The maximum loan is $75,000. Loan amount will depend upon the available equity on the property.
The Rehabilitation Loan term is up to 20 years.
Interest rates range from 0% to 2%. The interest rate will be determined on the income qualification of the applicant.
The Rehabilitation Loan will be secured by a mortgage to the borrower’s primary property.
To obtain information on the City’s Rehabilitation Loan Program, call or visit one of the City and County of Honolulu Rehabilitation Loan Branches shown below:
Downtown Branch 51 Merchant Street Honolulu, HI 96813 Phone: 808 768-7076 Kapolei Branch 1000 Uluohia Street, #118 Kapolei, HI 96707 Phone: 808 768-3240 Additional information is also available at the City’s website listed below: www.honolulu.gov/dcs/housingloans.htm
© 1995-2012 Honolulu Board of REALTORS®. All rights reserved.Information herein deemed reliable but not guaranteed.
Note: Honolulu Board of REALTORS® receives inquiries seeking professional advice; however the Honolulu Board of REALTORS® staff is not qualified, nor licensed, by the state of Hawaii to properly address real estate or legal issues. For questions concerning these issues, consult with either the Hawaii Real Estate Commission, your Principal Broker, or an Attorney.