Down Payment Assistance in Hawaii: Hale Kama'aina Loan Program

Updated October 2026 with HHFDC's income and purchase-price limits effective June 13, 2026, and the program guidelines revised July 21, 2026.

What is the Hale Kamaʻāina loan program?

The Hale Kamaʻāina loan program is a first-time homebuyer mortgage for Hawaiʻi residents. It pairs a competitive 30-year fixed-rate first mortgage with optional down-payment assistance: a second mortgage equal to 4% of your loan amount at 1% simple interest, with no monthly payments. It's for a home you'll live in as your primary residence.

See if you qualify for the Hale Kamaʻāina loan program →

Who the Hale Kamaʻāina Loan Program Is Designed For

The Hawaiʻi Housing Finance & Development Corporation (HHFDC) created the Hale Kamaʻāina loan program to help local first-time homebuyers with today's affordability challenges. It fits families and individuals who are close to affording a home and need a little extra help.

You may be eligible if you meet all of these program requirements:

• You're 18 or older and have lived in Hawaiʻi for at least six consecutive months before closing
• You meet the citizenship requirements of your loan type (FHA, VA, USDA-RD, or conventional)
• You'll move into the home as your primary, full-time residence within 60 days of closing, and keep living there for the life of the loan
• Your household income and the purchase price are within the county limits below
• You have a credit score of at least 660 and a debt-to-income ratio no higher than 45%
• Everyone on title completes homebuyer counseling with a HUD-approved housing counseling agency

Non-occupant co-borrowers aren't allowed, and you can't rent out the home or any room in it.

Property Requirements

You can use the Hale Kamaʻāina loan program for new or existing one-unit homes:

• Single-family homes
• Condominiums
• Townhomes
• PUDs (planned unit developments), including new communities like Kahuina, Koa Ridge, and Hoʻopili

The purchase price must be within HHFDC's limits, and the home needs at least 30 years of remaining economic life. ADUs, manufactured and mobile homes, and vacation or seasonal homes don't qualify. If you're looking at a leasehold home, ask your lender how the ground rent counts toward the program's purchase-price limit.

First-Time Homebuyer Rule

You (and your spouse, even one who isn't on the purchase) must be first-time homebuyers. How strict that is depends on whether you take the down-payment assistance:

• Without the down-payment assistance: you can't have owned and lived in a primary residence at any time in the three years before you apply.
• With the down-payment assistance: you can't have had an ownership interest in any residence in the past three years, and you can't own any other residential property in Hawaiʻi, fee simple or leasehold.

Two exceptions waive the first-time buyer requirement:

• Targeted areas. If the home is in a federally designated targeted area, you don't need to be a first-time buyer.
• Veterans. Veterans discharged under conditions other than dishonorable (shown on a DD-214) are exempt, as long as they haven't already used the veteran exception for a mortgage revenue bond loan or mortgage credit certificate anywhere in the U.S.

Check your Hale Kamaʻāina eligibility →

The 30-Year Fixed-Rate Mortgage Explained

The program's first mortgage is a 30-year, fixed-rate, fully amortizing loan funded through HHFDC's mortgage revenue bonds. You can take it on its own at a lower rate, or pair it with the down-payment assistance at a slightly higher first-mortgage rate. Rates change, so your participating lender will quote the current ones.

What this means for you

• Your rate stays the same for 30 years
• Your monthly principal and interest payment doesn't change
• You get an FHA, VA, USDA-RD, or HFA conventional loan with state support behind it

Loan Types Allowed

• FHA
• VA
• USDA-RD
• Fannie Mae HFA Preferred / Freddie Mac HFA Advantage

How the 4% Down-Payment Assistance Works

The optional down-payment assistance (DPA) lowers the cash you need up front. It's a second mortgage equal to 4% of your first mortgage loan amount. It's reserved automatically when your lender reserves the first mortgage, and any assistance left after your down payment goes toward paying down your loan balance.

Cost & Terms

• 1% simple interest, with no compounding
• No monthly payments, with a 30-year deferred term
• You can pay it off early at any time with no penalty

For example, on a $500,000 first mortgage the assistance is $20,000. If you kept it for the full 30 years, the interest would be $6,000 ($20,000 × 1% × 30).

The assistance, plus interest, comes due when you:

• Sell or transfer the home
• Refinance or pay off the first mortgage
• Stop living in the home as your primary residence
• Reach the end of the first mortgage

What You Need to Bring

To get the assistance, you must put in at least 5% of the sales price yourself. Your earnest money deposit and gift funds count toward it. You also can't have received an HHFDC down-payment loan before. If you skip the assistance, you only need your loan type's normal minimum down payment.

Income Limits & Purchase Price Limits

The program has limits that differ by county and change each year. The figures below took effect June 13, 2026.

Income Limits

Income limits depend on your county, your household size, and whether the home is in a targeted area. Household income counts every adult 18 or older who will live in the home, but not a co-signer.

In Honolulu County, you can qualify with a household income of up to $154,805 for a 1–2 person household or $178,025 for three or more people. In a targeted area, those limits rise to $184,800 and $215,600.

Household income limits by county (1–2 people / 3 or more people):

• Honolulu: $154,805 / $178,025. Targeted areas: $184,800 / $215,600
• Hawaiʻi: $126,500 / $145,475. Targeted areas: $151,800 / $177,100
• Maui: $177,600 / $207,200. Targeted areas: $177,600 / $207,200
• Kauaʻi: $163,080 / $190,260. No targeted areas
• Kalawao: $146,280 / $170,660. Targeted areas: $151,800 / $177,100

Purchase Price Limits

Each county has a maximum purchase price, which is higher in targeted areas. In Honolulu County, the maximum is $866,346 in non-targeted areas and $1,058,867 in targeted areas. The purchase price includes everything paid by you or on your behalf.

• Honolulu: $866,346. Targeted areas: $1,058,867
• Hawaiʻi: $613,662. Targeted areas: $750,031
• Maui and Kalawao: $1,359,682. Targeted areas: $1,661,833
• Kauaʻi: $1,162,348. No targeted areas

To qualify for the Hale Kamaʻāina loan program, your household income and the home's purchase price must both be within these limits.

What Are “Targeted Areas”?

In the Hale Kamaʻāina mortgage program, “Targeted Areas” are qualified census tracts and areas of chronic economic distress that the federal government designates. HHFDC uses the tracts listed in IRS Revenue Procedure 2024-8. Kauaʻi currently has none.

Targeted areas offer meaningful advantages for buyers:

• Higher income limits and higher purchase-price caps, which makes qualifying easier
• No first-time homebuyer requirement, even if you've owned a home in the last three years

The federal government sets these designations, so they can change as new census and economic data come out. Your lender can confirm whether a specific home is in a targeted tract. The current tract list is in HHFDC's program guidelines on the Hale Kamaʻāina Mortgage Program page.

See if you qualify for Hale Kamaʻāina →

Recapture Tax: What You Should Know

The Hale Kamaʻāina loan program is funded through federal mortgage revenue bonds, so you could owe a federal recapture tax if you sell the home within 9 years.

You may owe recapture tax only if all three of these apply:

1. You sell within 9 years of buying
2. You make a profit on the sale
3. Your household income at the time of sale is over the program's limit

The tax is capped at 6.25% of the original first and second loan amounts, or half of your profit, whichever is less. It doesn't apply if the home goes to a spouse or former spouse in a divorce, or if it's sold because the borrower died. Refinancing doesn't reset or cancel the 9-year window. If you sell within 9 years, you must file IRS Form 8828 even if you owe nothing.

Because all three conditions have to apply, recapture affects only a small share of buyers. It's still worth planning for if you expect your income to rise quickly or think you might sell before the 9 years are up. After 9 years, you can sell with no recapture tax, whatever your income.

Hale Kamaʻāina Buyer Roadmap

Step 1 — Confirm Eligibility

Check the program basics: first-time buyer status (or a targeted-area or veteran exception), income and purchase-price limits, a 660+ credit score, an eligible property type, six months of Hawaiʻi residency, and moving in within 60 days.

Step 2 — Connect With a Trusted Real Estate Professional

Talk with an agent who knows the Hale Kamaʻāina program and Oʻahu's neighborhoods. They can help you find homes that qualify and walk you through the process.

Step 3 — Complete Your Homebuyer Education

Everyone who will be on title needs to finish homeownership counseling with a HUD-approved housing counseling agency.

Step 4 — Work With a Participating Lender

Choose a participating lender. They'll reserve your loan in the eHousingPlus system, check your eligibility, and explain your mortgage options under the program.

Step 5 — Decide on the 4% Down-Payment Assistance

Decide whether the optional DPA fits your plans. It means bringing 5% of the price yourself and a slightly higher first-mortgage rate. Think about your savings and how long you expect to stay in the home.

Step 6 — Review Your Long-Term Plans

Make sure the home fits your timeline and goals. Keep in mind the owner-occupancy rule, when the DPA comes due, and the possible recapture tax if you sell within 9 years.

Questions About Qualification?

If you'd like help figuring out whether you qualify for the Hale Kamaʻāina loan program, or how it compares to your other options, contact Team Wong Hawaiʻi. We're a local real estate team that helps buyers work through Hawaiʻi mortgage programs.

Ask a question anytime or reach out directly, and we'll help you plan your next steps.

Attribution

Program information comes from:

• HHFDC Hale Kamaʻāina Mortgage Program Administrator's Guidelines (published 11/14/25, revised 7/21/26)
• HHFDC Hale Kamaʻāina Eligibility Income and Purchase Price Requirements (as of 6/13/26)
• HHFDC Hale Kamaʻāina Mortgage Program presentation (March 9, 2026)

Rates, limits, and assistance amounts can change at any time. Confirm current terms with HHFDC or a participating lender.