The program, to begin Jan. 1, is the first of its kind in the nation for indigenous people, said Clayton Hee, OHA board of trustees chairman, at a news conference yesterday.

"This (program) addresses the need for housing which no other program can address" and targets Hawaiians who don't make enough to qualify for low-income financing programs such as the state's Hula Mae program, Hee said. "This allows for all Hawaiians to participate."

Financing is to be available for purchase of private lands as well as Hawaiian homelands, he said. A family of four with an income of $20,000 to $22,000, about half of the state's median income, could apply for the loans.

To begin, 500 families can borrow $20,000 for 10 years at zero interest. The money has been set aside from the OHA trust fund, said housing officer Stephen Morse.

Hawaii Habitat for Humanity, the self-help program that will administer the program, will contribute a matching or higher amount, officials said. The group is able to lower the cost of the homes through donated building supplies and grants it receives from the county, state and federal governments and some lending institutions.

Qualified borrowers would help lower the cost of the home through "sweat equity," contributing much of the labor.

Last year, OHA's board approved a $1.7 million, zero interest loan to Kauai Habitat for Humanity, which has been used to help build 100 self-help homes.