First-Time Home Buyer Programs in Hawaii 2026

Hawaii’s state program for first-time buyers is the Hale Kamaʻāina Mortgage Program, run by the Hawaiʻi Housing Finance and Development Corporation (HHFDC). It pairs a 30-year fixed first mortgage funded by tax-exempt bonds with an optional deferred second mortgage, which the July 2026 guidelines set at 4% of the first-mortgage amount.

Older guides still call it Hula Mae. HHFDC’s May 8, 2026 announcement of the first closings says the program, “formerly known as the Hula Mae Single Family Mortgage Program, launched in December 2025,” and its executive director thanked staff “for reviving this program that had been dormant for 12 years.” Everything below comes from HHFDC’s own pages and the Program Administrator’s Guidelines (published 11/14/25, revised 07/21/26), read on September 24, 2026. Down-payment help from other sources is on our Hawaii down payment assistance page; this page follows one buyer through the state loan from start to finish.

What Hale Kamaʻāina lends, and which loan types it wraps

HHFDC’s program page says qualified borrowers “may receive competitive fixed rate 30-year mortgage financing with optional down payment assistance.” The FAQ adds that the rate “is targeted to be at least 50 basis points below market” and that the actual rate “is based on the bond rate at the time of sale.” We don’t print the rate here because it moves with each bond sale. HHFDC posts the current figure on the program page.

The first mortgage is one of five familiar loan types. The guidelines say the bond program “offers FHA, USDA-RD, VA, Fannie Mae HFA Preferred and Freddie Mac HFA Advantage loans.” That means a veteran can use a VA loan inside Hale Kamaʻāina, and an FHA borrower keeps FHA’s own underwriting, with HHFDC’s rules layered on top. Our FHA vs. conventional comparison covers how the two families differ. What the program won’t do is refinance an existing mortgage, convert an agreement of sale, or buy the fee under a leasehold home.

The 4% second mortgage, and the Act 214 rewrite

Under the July 21, 2026 guidelines, the assistance is “a 1% simple interest, 30-year deferred payment second mortgage loan,” and the amount “is calculated as 4% of the total loan amount.” This is a loan you repay, not a grant. It comes due at first-mortgage maturity, or earlier if you refinance, stop living in the home, sell or transfer it, or default. HHFDC’s own worked example for agents uses a $500,000 loan: $20,000 of assistance at 1% simple interest adds $6,000 of interest over 30 years.

Taking the second mortgage adds three conditions. You must put in “at least 5% of the sales price” yourself (earnest money and gifts count toward it). You can’t own other residential property anywhere in the state. And you can’t have received an HHFDC down-payment loan before. Skip the second mortgage and the 5% rule falls away, leaving FHA’s or the GSE’s own minimum down payment.

These terms are about to change. HHFDC’s FAQ, updated September 4, 2026, says Act 214 of the 2026 session requires “amendments to the administrative rules before HHFDC can implement the updates,” and that the updated Second Mortgage Loan Terms “will be available here” once the rules are done. Ask your lender which version of the second-mortgage terms will apply when it reserves your loan. The guidelines say terms already reserved “will not change as long as loans are delivered according to the timetable.”

HHFDC’s three-year test and who is exempt

The guidelines set two versions of the test. If you take the down-payment loan, you must have had “no ownership interest in any residence at any time during the three (3) year period” before applying. Without it, the test is narrower: no ownership interest in a home you occupied as your principal residence during those three years. A spouse counts, including a spouse who isn’t buying.

Two groups can skip the test. The first is a veteran discharged “under conditions other than dishonorable” who has never used the veteran exception for a bond loan or mortgage credit certificate anywhere in the U.S. You’ll need a DD214 to prove it. The second is anyone buying in a targeted area. The guidelines list those census tracts island by island, and for Kauaʻi County the entry reads “No Targeted Areas.”

You must also be at least 18, a U.S. citizen or resident alien, and a Hawaii resident “for at least six consecutive months prior to the date of closing,” shown with a state ID or a Hawaii tax return.

Income and price caps set county by county

HHFDC’s FAQ says the limits “are revised from time to time pursuant to U.S. Internal Revenue Service guidelines.” They depend on household size (1–2 people or 3 and more) and on whether the home sits in a targeted area. Take Honolulu, outside a targeted tract, as of June 13, 2026: the income cap is $154,805 for a household of one or two and $178,025 for three or more, and the purchase-price cap is $866,346. The other four counties are on HHFDC’s eligibility page.

Eligible homes are new or existing single-family houses, townhomes, PUDs and condominiums. A property with an accessory dwelling unit is out. A leasehold home qualifies only if the lease has at least 35 years left and the lease rent is fixed for at least 10 years from the loan date.

Credit, counseling and the 60-day move-in

• Credit and debt: the guidelines require “a minimum FICO credit score of 660 and a maximum debt-to-income ratio of 45%,” with combined loan-to-value capped at 100%.
• Counseling: everyone who will be on title must complete homeownership counseling through a HUD-approved housing counseling agency. Co-signers don’t have to.
• Occupancy: you must move in within 60 days of closing and stay an owner-occupant for the life of the loan. The FAQ says a violation “may cause the entire loan balance to become immediately due.” HHFDC can waive occupancy for up to three years for hardships such as a job or military transfer. Renting out the home, or even a room, isn’t allowed.
• Co-borrowers: a non-occupant co-borrower isn’t allowed. A co-signer who stays off the deed is.

Costs that are specific to the bond loan

HHFDC charges its own fee at closing: “$500 fee for each mortgage and a $500 fee for each downpayment assistance second mortgage.” With both loans, that’s $1,000, paid by cashier’s check, money order or business check. HHFDC doesn’t take electronic payments. Our Hawaii closing costs guide covers the conveyance tax and recording fees that come on top.

Bond financing also carries a possible federal recapture tax. It applies only if all three happen: you sell within nine years, you make a profit, and your household income at the time of sale is above the limit. The guidelines cap it at “6.25% of the original principal balance of the first and second loans or 50% of the net profit,” whichever is less. If you sell within nine years, you file IRS Form 8828 even if you owe nothing.

HHFDC offers that are closed

Mortgage Credit Certificate. HHFDC’s MCC page says the program “is no longer accepting new applications.” The only thing it still processes is reissuance for existing holders who refinance.

First-Round Homebuyer Incentive. This was a non-repayable payment of up to $3,000 for the first 35 buyers to close. The guidelines mark it “Fully Utilized on 06/23/26 – No Longer Available.”

A separate HHFDC route for shortage professions

The HHFDC Equity Pilot (DURF DEP) isn’t part of Hale Kamaʻāina. It works only in designated units in approved developments, and HHFDC’s page describes it as “a zero‑percent, 30‑year second mortgage loan that allows HHFDC to purchase a portion of the equity” in those units, with a “repayment obligation.” Buyers must own no real property anywhere in the world, use no gift funds, and work in a profession HHFDC lists as facing a shortage, such as healthcare, education, law enforcement or agricultural field work. The featured project is Kuilei Place: 28 two-bedroom units with a $103,300 HHFDC contribution per unit.

Applying through a participating lender

You don’t apply to HHFDC directly. Its how-to-apply page sends you to a participating lender, who pre-qualifies you. You then complete counseling, find a home with a licensed agent, and once your offer is accepted, the lender reserves bond funds through eHousingPlus. HHFDC’s list, updated 8/6/2026, names 14 lenders, from American Savings Bank and First Hawaiian Bank to national firms such as Guild Mortgage and loanDepot. After closing, the loan goes to The Money Source, the program’s master servicer. For a first look at payments, try our mortgage calculator or affordability calculator, then get pre-approved with a lender on HHFDC’s list.

More on Hawaii: Hawaii real estate hub, mortgage lenders in the Pacific. Nearby states: California, Alaska.

Questions Hawaii first-time buyers ask

Is Hale Kamaʻāina the same thing as Hula Mae?

Yes. HHFDC says Hale Kamaʻāina is the program “formerly known as the Hula Mae Single Family Mortgage Program.” It relaunched in December 2025 after 12 dormant years, and the administrative rules still carry the Hula Mae name (HAR Chapter 15-314).

Do I have to take the down-payment loan?

No. The guidelines let you choose “No Down Payment Assistance (0%)” and take a lower first-mortgage rate. The 5% contribution rule and the no-other-Hawaii-property rule apply only if you take the second mortgage.

I owned a home on the mainland four years ago. Do I qualify?

On timing, yes. HHFDC’s test looks back three years from your application date, so ownership that ended more than three years ago doesn’t count. You still need six consecutive months of Hawaii residency before closing.

Can I rent out a room to help with the mortgage?

No. The guidelines say you “cannot rent the property (either in whole or a room),” and the servicer may foreclose if you do. The FAQ also caps business use at 15% of the home’s area.

Can I still get a Hawaii mortgage credit certificate?

Not as a new buyer. HHFDC stopped taking new MCC applications. Only current certificate holders who refinance can get a reissued certificate.