Affordable Housing

Types of Affordable Housing in Oahu

Here on the island, many residents flock at the chance to buy Affordable Housing projects. Here on Oahu, there are two main programs -  Affordable Housing and Reserved Housing. Both allow buyers to purchase units at below-market prices but have different rules, restrictions, and are administered by different state agencies. The Hawaii Housing Finance and Development Corporation (HHFDC) is in charge of Affordable Housing and The Hawaii Community Development Authority (HCDA) is in charge of Reserved Housing. 

Frequently Asked Questions

• What is HHFDC
  

  • The Hawaii Housing Finance and Development Corporation (HHFDC) is the primary agency that is in charge of overseeing affordable housing, finance, and development in Hawaii. Their website is: http://dbedt.hawaii.gov/hhfdc/

• What are the benefits of HHFDC Sponsored Affordable Housing?

  1. Allows eligible and qualified applicants to purchase at below-market prices, likely creating built-in equity

  2. Homebuyers have an opportunity to live in town in a brand new development that fits their budget
  3. Gifting and co-signing provides an opportunity for homeownership.
  4. Household limitations subject to The City and County of Honolulu ordinances.

• What are the buyer's procedures

  1. Attend an educational seminar and receive an Application Packet.
  2. Fill out the Application Packet and meet with a lender for a mortgage loan pre-qualification.
  3. Return the completed packet by the project deadline
  4. HHDFC First Review - Review of applications to determine eligibility.
  5. Public Drawing.
  6. HHFDC Second Review - Assignment of Property Selection Number (PSN)
  7. Unit Selection & Contract Signing
     
• What are the documentation requirements?

  • The HHFDC will require documentation to support the buyer's application. Some examples are - Current year tax returns, W-2(s), 2 months of pay stubs, and a Pre-Qualification letter from one of the preferred project lenders. Lenders will typically have different requirements to determine loan pre-qualification. 

• What are the income limits for HHFDC Affordable Housing?
  • HHFDC Affordable Housing is for buyers earning 140% and below of the HHFDC established Area Median Income. This number changes yearly
• How do I know if I am eligible for Affordable Housing?
  • The HHFDC will determine eligibility based on the required information you provide in your Application Packet, including the following:
    1. US Citizen or permanent resident alien (with valid Government-issued Card).
    2. At least 18 years of age.
    3. A resident of the State of Hawaii who currently resides in the State of Hawaii.
    4. Shall physically reside in the unit purchased.
    5. Does not own a majority interest in a fee simple or leasehold property anywhere in the world. 
    6. Has sufficient gross income to qualify for the loan to finance the purchase.
    7. Has a need for housing in accordance with state law. Refer to your project's information packet for additional information.
• What is the deposit schedule?
  • The buyer will need to provide $500 at contract signing and the remainder of 5% minus $500 after 30 days from contracting (subject to change depending on the developer)
• What is the HHFDC Buyback Restriction?
  • The Buyback Program is 1 of 2 HHFDC required programs that are imposed on all new HHFDC developments. This requires that the owner occupy the unit purchased as their primary residence (owner-occupancy) for 10 years or the duration of the program. The buyback program also gives HHFDC the first option to purchase the property in the event that the owner can no longer be an owner-occupant or wishes to sell or transfer the unit during the first 10 years of ownership. The restriction automatically terminates at the end of 10 years from the recording date. 
• What is the SAE Program Restriction?
  • Shared Appreciation Equity or "SAE" is the 2nd of 2 HHDFC required programs that are imposed on all new HHFDC developments. This is the sharing of the property's net appreciation with the HHFDC in exchange for the buyer's opportunity to purchase the unit at below-market prices. The SAE percentage is calculated prior to closing and once it is determined, it will not change. The program requires owner occupancy for as long as the SAE obligation is owed to the state and has not been released by the HHFDC.
• When is the SAE due and payable?
  • The SAE must be paid when the property is sold, transferred, or rented. Owners may choose to pay off the SAE at any time after the property closes and is recorded. 
• How is HHFDC's Percentage Share Calculated?
  • The formula is: Original Fair Market Value (determined by HHFDC's appraisal prior to closing), minus the Original Purchase Price, divided by the Original Fair Market Value and rounded to the nearest one percent.
• If I am a single person, can I purchase a 2-bedroom unit?
  • Any applicant may select ANY unit based on their PSN (property selection number) and what is available at the time of their unit selection. The lenders determine the sales price based on the applicant's pre-qualification letter and HHFDC approved income category.