What is Affordable Housing?

Dialogue around the term “Affordable Housing” in Hawaii is often met with confusion or disdain, so let us break it down so you fully understand what Hoopili Affordable Housing is all about. It’s important to note that the phrase “Honolulu Affordable Housing” is more the name of a state-run housing program, than it is a description of a specific price of Hawaii property. This is where many people find disdain, as the question “Affordable for who?!” often comes up with any press releases regarding new affordable housing projects in Honolulu. The term “affordable” is completely subjective and we understand that what’s deemed “affordable” by one person’s standards may be a steep price in another person’s standards. The cost of living in Hawaii puts an intense amount of pressure on it’s residents and in turn, on the Hawaii state government to create affordable housing opportunities for these residents.

Once you’re able to reconcile that it’s actually the name of a program, and that the program is tasked with providing for-sale and for-rent housing opportunities at prices that are more affordable than typical Hawaii real estate market prices, it becomes easier to live with the phrase.

What are the Hoopili Affordable Housing income requirements?

Not every Honolulu Affordable Housing program is designed the same. Those considering Kaikoi at Hoopili Affordable Housing for sale should know that the income limits are capped at the 120% AMI group which provides a max income of $105,800 for single household, and $200,600 for an 8-person household. Reference the chart below:

While income is one the most important metrics of the program, you still have to check a few more boxes in order to be deemed eligible for affordable housing at Hoopili. Here’s some of the standard guidelines to be expected:

• Applicant must be at least 18 years old and a citizen of the U.S. or a resident alien living in the State of Hawaii, with a bona-fide intent to physically live in the unit for sale for the duration of the “restriction period.” (This will most likely be 10 years)

• No buyer or household member owns or has not owned a majority interest in ANY residential real estate for a period of 3 years prior to application. *Some exemptions may apply, but at the state’s discretion.

• Total assets of those in household must not exceed the price of the unit being purchased. *Some exemptions may apply at state’s discretion.

• Must not have previously received assistance from a State or County agency to purchase an affordable housing unit. Some exceptions apply.

• Must have sufficient income to qualify for a monthly mortgage payment that does not exceed 33% of the gross monthly household income.

• Household size limitations: The Affordable Housing Rules specify a minimum and maximum occupancy for (Studio) units of 1-2 persons, (1) bedroom units of 1 - 3 persons, (2) bed units of 2 - 5 persons, and (3)-bed units of 3 - 7 persons. Following an initial minimum marketing period of 90 days, DPP may consider, on a case by case basis, single member income qualified households as to 2 bedroom units.

Oahu Affordable Housing Restrictions

In return for being allowed to purchase a new construction home on Oahu at below market prices, the state typically puts restrictions on the future sale, rent, or transfer an affordable home. Hoopili affordable housing purchasers are in luck though, as they will only be subject the “Buyback” restriction and NOT the Shared Appreciation Equity restriction like most new honolulu affordable housing projects are subject to. Shared Appreciation Equity restrictions require that you “share” a portion of your sale proceeds with them upon the sale, rent, or transfer of the home. Not the case for Hoopili homes.

What is the Buyback restriction?

Buyers who intend to purchase an affordable unit at Ho’opili must understand that they are required to own and occupy their unit for the period of 10 years. Should they choose to sell, rent, or transfer the ownership of the home before the buyback period expires, they must give notice to the department of Budget & Fiscal Services(BFS) and the BFS will have the first right of refusal to purchase or “buyback” the unit, or they will require the owner to sell the unit to a Qualified Resident within the same income category as original buyer.

After the 10-year buyback period expires, owners are free to sell, rent, or transfer ownership of their home as they wish. This is where affordable buyer will realize the full potential of the program. Buyers that sell their homes after the 10-yr period expires have historically walked away with a substantial chunk of money, given that they were allowed to buy the home and subsidized price, not to mention the appreciation of the home over the course of 10 years.

Required Documents

If you’re interested in buying an affordable housing unit at Ho’opili, rest assured that we’ll walk you through the process step by step to equip you with all the info you need to approach your homeownership plans with confidence. In preparing to purchase an affordable unit at Hoopili, you should expect the following documentation needed:

1.) Housing Application Form. The affordable housing application is made available upon the release of an Affordable Housing Lottery(join the interest list below to be notified) and must be completely filled out and returned together with your Prequalifcation Letter.

2.) Pre-Qualification Letter. A Pre-Qualification Letter from DHI Mortgage or other approved lender is required to be turned in with your application. It’s important to get a head start on this so you don’t miss the lottery application deadline when it’s announced.

3.) Owner-Occupant Affidavit and Affidavit as to Family Members. This will be included in your application. This form must be signed by all parties in front of a Notary Public. Notaries are typically available at your local bank or Title & Escrow office. The UPS Store in Ewa Beach.

4.) Tax Returns or Other Income Verification forms approved by DPP. Submit two (2) years of signed FEDERAL tax returns with all schedules attached to your application. Income eligibility can be based on tax return information, and or your total household members current payroll information(paystubs).

5.) Proof of Residency. Provide valid proof that you are domiciled in the State of Hawaii such as a Driver's License, State ID, or other approved documentation.

6.) Lottery Registration Form. The Lottery Registration Form is available from the sales office and must be completed to participate in any lottery.

Are there Affordable Single Family Homes at Ho’opili?

Unfortunately not. The income thresholds of the Hoopili Affordable Housing program don’t support the prices of the single family homes at Ho’opili.

Where can I find affordable housing on Oahu?

Currently the bulk of affordable housing is offered in the neighborhoods offering Oahu new homes like the Kakaako and Ala Moana condo projects in Honolulu. However, the Ho’opili development is the only opportunity to purchase affordable housing in Kapolei or Ewa Beach at the moment. Here’s a list of the all the current or upcoming Honolulu Affordable Housing For Sale in Honolulu in 2020:

• Malina at Koa Ridge Affordable Housing in Waipio. While there’s been no official sales launch yet, we do expect this project to bring affordable housing to Mililani and Waipio residents in 2021. The project has been plagued with years of delays though so we definitely don’t recommend waiting around without risk of losing your opportunity elsewhere.

• Ililani Condos in Kakaako. This new condo in Kakaako currently has affordable inventory leftover with the least expensive unit being right around $475,000 for a 1-bed unit.

• The Park on Keeaumoku . We expect this project to be announced later this year and believe we’ll see a 30 years occupancy requirement at this Midtown Ala Moana project as well. The market priced units will be reasonable though.