The purpose of the City and County of Honolulu's Down Payment Loan Program is to promote homeownership. The program provides 0% interet loans to qualified individuals to help meet the down payment requirement.

Who is eligible for the City's Down Payment Loan Program?

We cannot list every approval condition that could arise but the bulleted items below are among the most common.

• You must be a U.S. citizen or a U.S. permanent resident.
• Your gross annual household income (before any deductions) cannot be more than the amounts shown in the table below.  We calculate your household's projected gross income for the next 12-months, starting with the month we receive your application.  
• Taking into consideration the City's Down Payment "second mortgage" loan, you must be capable of getting a "first mortgage" loan from a commercial lender to finance the remaining portion of the purchase price. 
• You must meet the definition of a First-Time Home Buyer.  The property you are buying must be your primary residence, and, you cannot have owned (in your own name or together with someone else) a residential property for the 3 years prior to the date of your loan application.

What is the maximum loan amount I may borrow? 

$40,000

Do I need to make a down payment towards the purchase?

Yes, although the name of the program can cause confusion, you (the buyer) must also contribute at least 5% toward the purchase price as part of the total down payment.  Conversely, you cannot make a down payment that exceeds 30% of the purchase price.

Is there a maximum purchase price?

Yes - $632,000. Historically, HUD has adjusted the maximum purchase price once a year and it is promptly updated on this website.  You can also call 808-768-7076 for confirmation.

What is the my interest rate and does the City charge any fees?   

Your interest rate will be 0% and the City does not charge any fees.

What kind of property may I purchase?    

Your property must be residential, be located on Oahu, and be a legally-permitted structure.  Your property must also meet HUD's minimum Housing Quality Standards and other federal requirements, such as those related to lead-based paint in homes built before 1978.

Are new construction, affordable projects eligible?    

Yes, but check with the developer because second mortgages, like the City's Down Payment loan, may not be permitted by the developer.  Also, units must be within 6 months of completion before Down Payment loan applications can be accepted and approved.

Are new construction, affordable projects eligible?

Yes, but check with the developer because they may or may not allow second mortgages, such as the City's Down Payment loan.  Also, units must be within 6 months of completion before Down Payment loan applications can be accepted and approved.

Will the City inspect the property I want to purchase?

Yes, after you have an accepted purchase offer and you appear eligible for the program, a city inspector will schedule a visit to the property to identify any serious health or safety hazards.  If such hazards exist, they must be corrected before your Down Payment loan can be approved.  If the seller is unwilling to correct the hazard(s) but would allow you (the buyer) to make the repairs, you may exercise this option if you wish to pursue the purchase. 

Examples of things that could be considered serious health and safety hazards include:

(1)  an entrance door that does not close or lock properly,

(2)  exposed live electrical wires,

(3)  missing or broken smoke alarms,

(4)  interior walls with large areas of peeling paint (possibly lead paint) in dwellings built before 1978, and

(5)  unsecured appliances (like a cooking range) that young children could realistically tip over onto themselves and be injured or killed.

How much is the monthly payment?

If you request the $40,000 maximum loan, your monthly payment will be $166.67, repaid at 0% interest over 20 years ($40,000 ÷ 240 months = $166.67).  However, you will receive an annual occupancy credit that will shorten the loan repayment term (see next FAQ).

How much is the annual occupancy credit?

On a $40,000 loan, you will receive a $2,000 occupancy credit (or 5% of the original loan amount) for each 12-month period you live in your home.  For example, if you borrow $40,000 and make all your payments for 10 full years, you will receive a matching $20,000 credit at the end of the 10 years (10 years x $2,000 = $20,000).  In this example, your 20-year Down Payment loan would be paid off in half the time - 10 years instead of 20 years.  On the other hand, if you need to sell your home after 5 years (60 continuous months), you would still receive an occupancy credit of $10,000 (5 years x $2,000 = $10,000). 

However, be aware that occupancy credit is only given for full years - not parts of a year.  For example, if you sold your home after 5 years and 11 months, you would receive a $10,000 occupancy credit ($2,000 X 5 full years), but you would not receive credit for the additional 11 months.

Is there a homebuyer education requirement?

Yes. Ideally, you should complete the HUD-certified homebuyer education course before you even begin your search for a home so you are familiar with real estate and lending terms and understand your rights and responsibilities.  In any case, the course must be completed no later than the date your primary lender submits your Down Payment loan application to the City.

Are there loan restrictions?

Yes. You will be required to sign a Homebuyer Agreement agreeing to a 10-year affordability period.  If you are unable to live in the home for the full 10 years, you must contact the Rehabilitation Loan Branch in advance to explain your circumstances.  A release from the 10-year affordability agreement is not automatic and is limited to hardship situations. 

Are there loan restrictions?

Step 1 – Your application will be handled by Mortgage Jake

The Down Payment loan will be what is called a "second mortgage" loan.  If you appear eligible, the lender will be asked to list the City's Down Payment loan of $40,000 (or less) as "subordinate financing" on your Uniform Residental Loan Application (commonly referred to as a Fannie Mae Form 1003 or Freddie Mac Form 65).  We process loan requests in the order we receive them - subject to the availability of funds. 

Step 2 – Once you have signed and accepted the purchase contract, received an initial loan approval, the City will schedule the home inspection.  

The City currently has $500,000 in funds left as of January 24, 2023.

The purpose of the City and County of Honolulu's Down Payment Loan Program is to promote homeownership. The program provides 0% interet loans to qualified individuals to help meet the down payment requirement.

Who is eligible for the City's Down Payment Loan Program?

We cannot list every approval condition that could arise but the bulleted items below are among the most common.

• You must be a U.S. citizen or a U.S. permanent resident.
• Your gross annual household income (before any deductions) cannot be more than the amounts shown in the table below.  We calculate your household's projected gross income for the next 12-months, starting with the month we receive your application.  
• Taking into consideration the City's Down Payment "second mortgage" loan, you must be capable of getting a "first mortgage" loan from a commercial lender to finance the remaining portion of the purchase price. 
• You must meet the definition of a First-Time Home Buyer.  The property you are buying must be your primary residence, and, you cannot have owned (in your own name or together with someone else) a residential property for the 3 years prior to the date of your loan application.

What is the maximum loan amount I may borrow? 

$40,000

Do I need to make a down payment towards the purchase?

Yes, although the name of the program can cause confusion, you (the buyer) must also contribute at least 5% toward the purchase price as part of the total down payment.  Conversely, you cannot make a down payment that exceeds 30% of the purchase price.

Is there a maximum purchase price?

Yes - $632,000. Historically, HUD has adjusted the maximum purchase price once a year and it is promptly updated on this website.  You can also call 808-768-7076 for confirmation.

What is the my interest rate and does the City charge any fees?   

Your interest rate will be 0% and the City does not charge any fees.

What kind of property may I purchase?    

Your property must be residential, be located on Oahu, and be a legally-permitted structure.  Your property must also meet HUD's minimum Housing Quality Standards and other federal requirements, such as those related to lead-based paint in homes built before 1978.

Are new construction, affordable projects eligible?    

Yes, but check with the developer because second mortgages, like the City's Down Payment loan, may not be permitted by the developer.  Also, units must be within 6 months of completion before Down Payment loan applications can be accepted and approved.

Are new construction, affordable projects eligible?

Yes, but check with the developer because they may or may not allow second mortgages, such as the City's Down Payment loan.  Also, units must be within 6 months of completion before Down Payment loan applications can be accepted and approved.

Will the City inspect the property I want to purchase?

Yes, after you have an accepted purchase offer and you appear eligible for the program, a city inspector will schedule a visit to the property to identify any serious health or safety hazards.  If such hazards exist, they must be corrected before your Down Payment loan can be approved.  If the seller is unwilling to correct the hazard(s) but would allow you (the buyer) to make the repairs, you may exercise this option if you wish to pursue the purchase. 

Examples of things that could be considered serious health and safety hazards include:

(1)  an entrance door that does not close or lock properly,

(2)  exposed live electrical wires,

(3)  missing or broken smoke alarms,

(4)  interior walls with large areas of peeling paint (possibly lead paint) in dwellings built before 1978, and

(5)  unsecured appliances (like a cooking range) that young children could realistically tip over onto themselves and be injured or killed.

How much is the monthly payment?

If you request the $40,000 maximum loan, your monthly payment will be $166.67, repaid at 0% interest over 20 years ($40,000 ÷ 240 months = $166.67).  However, you will receive an annual occupancy credit that will shorten the loan repayment term (see next FAQ).

How much is the annual occupancy credit?

On a $40,000 loan, you will receive a $2,000 occupancy credit (or 5% of the original loan amount) for each 12-month period you live in your home.  For example, if you borrow $40,000 and make all your payments for 10 full years, you will receive a matching $20,000 credit at the end of the 10 years (10 years x $2,000 = $20,000).  In this example, your 20-year Down Payment loan would be paid off in half the time - 10 years instead of 20 years.  On the other hand, if you need to sell your home after 5 years (60 continuous months), you would still receive an occupancy credit of $10,000 (5 years x $2,000 = $10,000). 

However, be aware that occupancy credit is only given for full years - not parts of a year.  For example, if you sold your home after 5 years and 11 months, you would receive a $10,000 occupancy credit ($2,000 X 5 full years), but you would not receive credit for the additional 11 months.

Is there a homebuyer education requirement?

Yes. Ideally, you should complete the HUD-certified homebuyer education course before you even begin your search for a home so you are familiar with real estate and lending terms and understand your rights and responsibilities.  In any case, the course must be completed no later than the date your primary lender submits your Down Payment loan application to the City.

Are there loan restrictions?

Yes. You will be required to sign a Homebuyer Agreement agreeing to a 10-year affordability period.  If you are unable to live in the home for the full 10 years, you must contact the Rehabilitation Loan Branch in advance to explain your circumstances.  A release from the 10-year affordability agreement is not automatic and is limited to hardship situations. 

Are there loan restrictions?

Step 1 – Your application will be handled by Mortgage Jake

The Down Payment loan will be what is called a "second mortgage" loan.  If you appear eligible, the lender will be asked to list the City's Down Payment loan of $40,000 (or less) as "subordinate financing" on your Uniform Residental Loan Application (commonly referred to as a Fannie Mae Form 1003 or Freddie Mac Form 65).  We process loan requests in the order we receive them - subject to the availability of funds. 

Step 2 – Once you have signed and accepted the purchase contract, received an initial loan approval, the City will schedule the home inspection.  

The City currently has $500,000 in funds left as of January 24, 2023.