Hawaii First-Time Home Buyer: 2023 Programs and Grants

December 9, 2022 - 8 min read

What to know about buying a house in Hawaii

Home prices in Hawaii are far above average compared to most of the United States. Fortunately, there’s at least one statewide home buyer assistance program and a number of local ones that can help first-time buyers get into an affordable mortgage. Here’s how to get started.


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Hawaii home buyer overview

The median listing price in Hawaii was $733,700 in October 2022. That was an increase of 6.7% year-over-year, according to Redfin.

First-time home buyers in Hawaii face some of the steepest home prices in the U.S. Nationwide, the average cost of a home was estimated at $397,589 during the same month. So first-timers would do well to take advantage of home buying assistance programs offered in The Aloha State.

Hawaii home buyer stats

Average Home Sale Price in HI1$733,700
Minimum Down Payment in HI (3%)$22,025
20% Down Payment in HI$146,750
Average Credit Score in HI2732
Maximum HI Home Buyer Loan3Up to $40,000 as interest-free, partly forgivable loan in Honolulu county

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Hawaii

If you’re a first-time buyer in Hawaii with a 20% down payment, you can get a conventional loan with a low interest rate and no private mortgage insurance (PMI).

Putting 20% down will keep your monthly mortgage payments low. It might also give you an edge in competitive housing markets like East Honolulu. However, few first-time borrowers have saved that much.

The good news is that you don’t need 30% down. Not by a long shot. Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97: Backed by Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. You’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so check your eligibility if you have a military service history
  • USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.

Mortgage loan limits in Hawaii

Because home prices and building costs in Hawaii are traditionally higher than in the continental U.S., the state also allows for higher loan limits on conforming and FHA loans.

In Hawaii, single-family home buyers can take a conforming loan up to $ in most areas. By contrast, the standard single-family conforming limit in most of the U.S. is $.

Similarly, the baseline FHA loan limit for single-family homes in Hawaii is $. In most other states, single-family FHA loans max out at $.

Loan limits are higher for properties with two to four units and can vary by ZIP code. See our complete guides to conforming loan limits and FHA loan limits for more information.

Hawaii first-time home buyer programs

The Hawaii Homeownership Center (HHOC) is a nonprofit mortgage broker in Hawaii that can assist “low to moderate income buyers who can benefit from [its] unique first-time buyer products.” These include down payment assistance loans and deferred closing cost assistance loans that can defray your upfront housing costs. In addition, its mortgage loans require only 3% down payment.

You can learn more about the HHOC mortgage program here.

In addition, looking at historical information, the State of Hawaii’s Housing Finance and Development Corporation (HHDFC) used to offer the Hula Mae mortgage program. And that provided some really worthwhile assistance.

But when we visited the relevant website in December 2022, it said: “Hula Mae program is not currently active.” HHDFC doesn’t make clear whether the program has been temporarily suspended or permanently abandoned. So click that last link to see whether it’s back in business by the time you read this. If it isn’t, check for programs managed by your city, county, or island. There’s a partial list in a later section.

HHDFC Mortgage Credit Certificate

If you’re a first-time buyer in Hawaii, you may be eligible for a mortgage credit certificate (MCC), provided you use an HHDFC-approved lender. An MCC is a tax credit that reduces the amount of federal income tax you have to pay. This frees up more available income to qualify for a home loan and assists you with monthly mortgage payments.

Funds for the HHFDC’s 2022 MCC program have been exhausted, according to its website. But the program appears to be back on offer in 2023. You can download the program’s brochure for more details.

Hawaii first-time home buyer grants

Homeowners working with the Hawaii Homeownership Center may be eligible for both down payment and closing cost assistance:

  • The Down Payment Assistance Loan Program requires only 3% down with no mortgage insurance and “low monthly payments”
  • The Deferred Closing Cost Loan is a 15-year deferred loan with no interest and no monthly payment that can be used toward your down payment and closing costs. It can offer loan amounts up to $10,000, matching your own contribution on a 4:1 basis

To qualify for these HHOC programs, you’ll need to be a first-time home buyer purchasing a home to use as your primary residence. And you must complete a homeownership education course. All HHOC loans are offered through the brokerage itself.

In addition, the Hula Mae mortgage program used to offer statewide down payment assistance. But, as you just read, that’s currently unavailable. Check the website to see if it’s restored by the time you read this.

Also, check out Hawaii State Federal Credit Union’s ideas for a “combo” loan that might help you buy a home in the state with zero down payment.

Other than that, you may be in line for down payment assistance from a local organization, including the ones listed below. But also run your own web search for "[city, county or island where you want to buy] down payment assistance.”

Buying a home in Hawaii’s major cities

With a median listing price of $1.4 million and home price inflation recently running at 20%, East Honolulu can be a real challenge for most first-time buyers. But Hawaii’s other two biggest cities are much more affordable. In Urban Honolulu, home prices are just a bit over one-third of those in its neighboring city. And Hilo is positively inexpensive, though only by Hawaiian standards.

If you’re eligible, you may be able to get help with your down payment in all three cities.

Urban Honolulu first-time home buyers

The median listing price for homes in Urban Honolulu was $555,000 in November 2022. Those home prices were flat year-over-year, according to Realtor.com.

At those home prices, making a down payment in Urban Honolulu might cost:

  • $16,650 for 3% down payment
  • $110,000 for 20% down payment

Areas in both Urban Honolulu and East Honolulu appear to share a down payment assistance (DPA) program.

Eligible borrowers will have to provide 5% of the purchase price. But the program offers additional funds of up to $40,000 towards your down payment. This loan is a second mortgage with a 0% interest rate. And monthly payments are $167 for the maximum loan amount, based on a 20-year repayment term at 0% interest.

Some of your loan may be forgiven, and the website says: “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).”

To qualify, you must meet household income limits. These caps are set at 80% of the area median income, but vary depending on the number of people in the household. Income limits are shown on the website. You must also undertake a home buyer education course to be eligible.

East Honolulu first-time home buyers

The median listing price for homes in East Honolulu was $1.4 million in November 2022. That was up by 20.6% year-over-year, according to Realtor.com.

At those home prices, making a down payment in East Honolulu might cost:

  • $42,000 for 3% down payment
  • $280,000 for 20% down payment

Areas in both Urban Honolulu and East Honolulu appear to share a down payment assistance (DPA) program. Find details through that link, and read the Urban Honolulu section (immediately above) for more information.

Hilo first-time home buyers

The median listing price for homes in Hilo was $496,000 in November 2022. That was up 4.4% year-over-year, according to Realtor.com.

At those home prices, making a down payment in Hilo might cost:

  • $14,900 for 3% down payment
  • $99,200 for 20% down payment

We couldn’t find a down payment assistance program just for Hilo. But there does seem to be one that covers the whole Island and County of Hawaii. Unfortunately, we couldn’t find that on the web either. But you can request details by emailing ohcd@hawaiicounty.gov or calling (808) 323-4300.

Where to find home buying help in Hawaii

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Hawaii. In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a list of city- and county-specific programs across Hawaii. The list is as follows.

Statewide and regional programs

Local home buying assistance programs

What are today’s mortgage rates in Hawaii?

You can check current mortgage interest rates in Hawaii here. Experiment with a mortgage calculator to see how down payment, interest rates, homeowners insurance, and property taxes will all affect your monthly mortgage payment.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders. Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.


1Source: Redfin.com Hawaii Housing Market Report

2Source: Experian.com study of 2021 and 2020 data

3Based on a review of the state's available DPA grants at the time this was written