Are rising home prices putting homeownership beyond your reach? Need down payment money?

According to the Hawaii Housing Demand Survey, there’s a continuing need for down payment assistance for low to moderate income (LMI) homebuyers. A survey of Hawaii renters who plan to purchase a home indicated that 85% are low and moderate income. About 40% said they have at least $5,000 saved to use as a down payment.

First mortgage financing for LMI homebuyers is limited by the high cost of mortgage insurance and loan price adjustments due to perceived higher risk. HHOC Mortgage (HHOCM), Hawaii’s only non-profit lender, has a solution. By using grant funds, HHOCM is able to lend up to 15% of the purchase price to qualified borrowers. This enables first-time homebuyers to qualify for a purchase with as little as 5% down payment and no need for private mortgage insurance. Homebuyer education from a HUD-approved counseling agency is required prior to closing. There are no deed restrictions attached to properties.

HHOCM Executive Director Dennis Oshiro said, ‘In our four years of lending, we’ve assisted over 45 first-time homebuyer families with $1,700,000 in down payment assistance loans (DPAL) with only one default, and currently there’s no delinquency in our portfolio of loans. When combined with pre-purchase financial education, our program works!”

HHOCM is an affiliate of the Hawaii HomeOwnership Center (HHOC) which is a non-profit corporation providing financial education for first-time homebuyers since October 2003. HHOC has helped over 1,050 families purchase their first homes. The majority of purchasers had low to moderate income. HHOC is a partner agency of the Aloha United Way and a HUD-approved counseling agency. Nationally, HHOC is also a charter affiliate of NeighborWorks America a national nonprofit organization created by Congress in 1978 to provide financial assistance, research, and training for community-based revitalization efforts. NeighborWorks is currently in more than 4,400 communities and spurring economic development in all 50 states.

HHOC and HHOCM moved into their offices at 1259 Aala Street #201 in November 2008. The office is open Monday through Friday from 8 a.m. to 5 p.m. Staff members are available by appointment to meet with potential clients to discuss their individual needs outside of office hours. At the time of enrollment in HHOC’s program, a onetime, lifetime membership fee of $60 is charged. “Our members can always come back to us in the future for refresher courses or post-purchase advice at no additional charge,” Oshiro said.

Abe Lee, Broker in Charge of Shirokiya Residential Estates, endorses HHOC. He said, “HHOC’s knowledgeable and personable staff makes it easy for potential home-buyers to learn the homebuying process. The information and coaching they provide give first-time buyers confidence to go ahead with their homebuying decision when the time is right for them.”

HHOCM Senior Loan Officer Rachel Willis said, “We are a fully licensed mortgage company under the State of Hawaii and certified by the U.S. Department of Treasury as a Community Development Financial Institution, which enables us to apply for Federal loan capital grants for use in assisting our home buyers.

“Mortgage financing is made easier with HHOCM’s DPAL program which offers fixed interest rates. A first mortgage finances 80% of the purchase price while the DPAL finances 15% of the purchase or a combined loan to value of 95%, thus allowing the borrower to come in with only 5% for the down payment. There are certain restrictions, so call me for details at 369-8295.”

Kealoha Caldeira of Coldwell Banker Pacific Properties said, “By joining HHOC, you will find staff members and volunteer instructors who are experienced in all aspects of the homebuying process. The expertise that is shared in the classroom is invaluable knowledge that you can trust from a proven source. This gives you confidence to make an informed decision to buy. I wish this organization was available when I bought my first home…it would have definitely lessened my anxiety and fears. I highly recommend HHOC to my clients and for anyone else who wants to learn how to better achieve their dream of homeownership.”

Additional information can be obtained by calling the Hawaii Homeownership Center at 523-9500 or by accessing the website www.hihomeownership.org.

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