Loan eligibility is blamed for Hilo homestead delays

HILO » Fewer than two-thirds of those on a waiting list have been awarded one of 100 new residential lots developed by the state Department of Hawaiian Home Lands, because some homestead applicants are having trouble qualifying for construction loans.

Work was finished months ago on the "scattered lots" projects in Panaewa and Kaumana, said Lloyd Yonenaka, a spokesman for the Department of Hawaiian Home Lands.

But not one of the 5,313 native Hawaiians eligible for a Big Island homestead has yet to live on the new residential lots.

"It is taking a while," Yonenaka said.

The main problem is homesteaders qualifying for loans.

"We need people to meet us halfway, and the best way to do that is to become financially qualified," Yonenaka said.

The department no longer turns away applicants who cannot obtain financing, he said. The department now offers financial counseling to help applicants improve their credit scores, but the process can take up to three years.

Menehune Development has been hired as the master developer for the three projects: a 40-lot subdivision called the Panaewa Residence Lots Unit 6; a 43-lot project located near Kaumana Elementary School; and a 17-lot project located along Punahele Street, he said.

The Punahele Street project, which the department calls Piihonua, is furthest along, since all but one of the lots have been awarded to Hawaiian beneficiaries, Yonenaka said.

He hopes construction will start by year's end, once the county does the final inspection of the infrastructure work, and that people will be living in the homes within a year.

The Kaumana project is awaiting subdivision approval and the assignment of lot identification numbers, which must come from the county Planning Department.

A "series of misunderstandings" has delayed that housing development, said Daryn Arai, the county's planning program manager, who said he recently discovered that the layout maps were not sent to various county and state departments for review and comment. Arai said the process should take four to six weeks to complete.

"We recognize the need (to build the homes), especially for homesteaders," he said.