Living in an island paradise comes with a steep price tag. As of February 2025, the median list price of a home in Hawaii was a whopping $740,000, according to real estate brokerage Redfin.
The good news is that there are ways to ease the financial burden of buying a home in Hawaii. If you’re a first-time homebuyer, consider starting with the Hawaii Housing Finance & Development Corporation (HHFDC), the state’s housing and development agency.
Hawaii homeownership statistics
Median home price (as of Feb. 2025): $740,000 (Redfin)
Median down payment (as of Dec. 2024): $200,000 (ATTOM)
Most affordable counties (as of Feb. 2025): Hawaii County, Honolulu County (ATTOM)
Hawaii first-time homebuyer programs
HHFDC Buyback Program
The HHFDC’s Buyback program is a deed restriction that gives HHFDC the first option to purchase the property if the owner can no longer occupy it at any point within the first ten years after buying.
Requirements
Pros and cons
HHFDC Shared Appreciation Equity Program
The HHFDC’s Shared Appreciation Equity (SAE) program offers buyers a below-market price on a home in exchange for giving the HHFDC a fixed percentage of the property’s net appreciation. The shares must be paid in full if the property is sold or they will be subject to a 12 percent interest rate.
Pros and cons
Hawaii down payment assistance and grants
While the HHFDC isn’t currently offering down payment assistance programs, there are other organizations that help make buying a home more affordable, particularly when it comes to making a down payment and covering closing costs.
Hawaii HomeOwnership Center Down Payment Assistance Loan (DPAL)
This organization offers assistance to homebuyers throughout the state through their affiliate, HHOC Mortgage, a non-profit mortgage broker.
The DPAL is a second mortgage for up to $125,000 with an interest rate capped at 4.5 percent. It must be paired with a 3-percent-down first mortgage through HHOC Mortgage.
Requirements
Pros and cons
Hawaii HomeOwnership Center Deferred Closing Cost Assistance Loan
This program is a 15-year deferred loan with the opportunity for a 6:1 savings match, up to $15,000. For example, if you can contribute $2,500 to your closing costs, you might be able to score $15,000 in assistance. The loan doesn’t accrue interest or require monthly payments.
Requirements
Pros and cons
City-specific homebuyer assistance programs
Maui Department of Housing and Human Concerns’ Down Payment Assistance Program
This program provides up to $30,000 or 5 percent of the home’s purchase price, whichever is less, to be repaid only if the property is no longer your primary residence or if you take out a cash-out refinance.
Requirements
Pros and cons
City and County of Honolulu Down Payment Loan Program
The Department of Community Services for the City and County of Honolulu offers a down payment loan for up to $40,000. The loan charges no interest, but it does require repayment over a 20-year term for most borrowers.
Requirements
Pros and cons
Other Hawaii homebuyer assistance programs
Mortgage credit certificate (MCC)
If you’re a first-time homebuyer in Hawaii, you can obtain a mortgage credit certificate (MCC) that allows you to take 20 percent of your mortgage interest as a dollar-for-dollar tax credit, which can add up to significant savings over the course of a 30-year mortgage. You can qualify for the MCC program if you meet the following conditions:
Have not owned a home in the last three years
Meet income limits, which vary based on household size and county ($92,200 to $168,700)
Buy a property within the local sale price limit ($347,205 to $640,287)
To get the MCC, you’ll need to get in touch with one of the participating program lenders.
Other Hawaii first-time homebuyer loans
Along with first-time homebuyer programs in Hawaii, you may be eligible for nationally available options, including:
FHA loans: These loans, which are insured by the Federal Housing Administration (FHA), have less stringent financial requirements than other loans. You can qualify for an FHA loan with a 3.5 percent down payment with a 580 minimum credit score.
VA loans: Active-duty military, veterans and surviving spouses may be eligible for a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA). These loans typically feature lower interest rates and don’t require a down payment.
USDA loans: The United States Department of Agriculture (USDA) guarantees these loans. Like VA loans, they don’t require a down payment, but you’ll need to buy in a designated rural area and meet area-specific income requirements.
HomeReady and Home Possible loans: Fannie Mae and Freddie Mac created the HomeReady and Home Possible loan programs, respectively. They’re specifically for first-time homebuyers, and along with having more flexible income requirements, they require only 3 percent down.
Get started
Ready to embark on the process of buying a home in Hawaii? Start by comparing mortgage rates, and dig into the terms to get a full understanding of what you’ll pay with each bank or credit union. Some Hawaii lenders might offer savings on mortgage points, reduced closing costs or extra incentives if you complete a homebuyer education course, for instance.
Shopping around is essential: With the high cost of living in Hawaii, every dollar you can save counts. You’ll also want to comparison shop for your homeowners insurance and other expenses related to homeownership.
