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  • Writer's pictureShaila Campbell

Free Money for First Time Homebuyers

Updated: May 6, 2019

The City & County of Honolulu offers a Down Payment Loan Program at 0% interest loan for all income-eligible borrowers up to a loan limit of $40,000. And, there is no loan fee.


Down Payment Loans

The City and County of Honolulu's Down Payment Loan Program is part of the City's efforts to promote homeownership and create a strong community. Utilizing HOME Investment Partnership Act funds from the U.S. Department of Housing and Urban Development, this program provides a zero interest loan to qualified low- and moderate-income families to meet down payment requirements for home purchase.

Frequently Asked Questions (FAQs)

WHO MAY APPLY FOR THE CITY'S DOWN PAYMENT LOAN? Prospective homebuyers who have not owned a residential property and whose annual household incomes are under the maximum income shown below:

2018 80% Area Median Income Limits for Honolulu Effective -

June 1, 2018*

WHAT IS THE MAXIMUM LOAN AMOUNT THE HOMEBUYER MAY BORROW? The loan limit is $40,000. Loans will be made on a first-come first-served basis subject to the availability of funds.

WHAT IS THE INTEREST RATE AND LOAN FEE? The interest rate is 0% for all income-eligible borrowers. There is no loan fee.

WHAT KIND OF PROPERTIES MAY BE PURCHASED? The property must be located on Oahu. The property must be a legally permitted structure meeting all local building codes. In addition, the property must pass a Housing Quality Standards inspection and meet other Federal requirements such as those governing Lead-Based Paint for homes built before 1978 and environmental reviews. WHAT WILL BE THE MONTHLY PAYMENT? The monthly payment will be based on a 20-year amortization term. Lower minimum loan payment amounts may be allowed for certain credit qualified borrowers. IS THERE A HOMEBUYER EDUCATION REQUIREMENT? Yes, all loan applicants must complete a City-approved homeowner education course prior to loan application.

ARE THERE LOAN RESTRICTIONS? The borrower must be an owner-occupant at all times. Upon sale or other transfer of the property, unless the new owner is income-eligible, the borrower must pay the City a specified percentage of the loan balance, which percentage will be reduced for each full year of occupancy.


Step 1 – When applying for a loan from your first mortgage lender, be sure to inform the lender that you are interested in a down payment loan from the City.

Step 2 – After initial loan approval from your first mortgage lender, your lender will submit a loan file to the City for approval. You must complete homebuyer education prior to your loan file submission to the City.



Questions? For more info, call Shaila at 808-741-7155 or email Hawaii Homes & Estates LLC. License No: RB-20456.


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