Helping Hawaiians to buy homes
The Department of Hawaiian Home Lands' bid to partner with private lenders on mortgage programs that will help native Hawaiians buy homes is gaining momentum. The department recently joined forces with a second local bank and is in talks with others.
Since state legislators passed an law in 2005 allowing the department to find private partners, the agency has been aggressively pursuing programs that will get more Hawaiians into homes, said Micah Kane, chairman of the Hawaiian Homes Commission.
LOCAL BANKS PROVIDE LOAN ASSISTANCE
For more information about the Bankoh Hawaiian Home Lands loan, visit a Bank of Hawaii Residential Loan Center on Oahu or the neighbor islands. For more information about American Savings Bank's Hoolako Pono loan, call 593-1226 on Oahu or 1-800-272-2566 on the neighbor islands.
Partnerships with American Savings Bank
and most recently Bank of Hawaii
to offer mortgages with broader guidelines will make it possible for more Hawaiian Home Lands participants to qualify for loans, Kane said.
"Before this amendment, Hawaiian homes were limited to federal loans," Kane said. "The ability to engage with privately ensured loans allows private lenders to get more creative in terms of prequalification and service to our community."
In the last three years, the department has put 2,500 native Hawaiians into homes out of the 20,000 or so that are on the waiting list, Kane said. The department's goal, which is running slightly ahead of schedule, is to put at least 1,000 applicants a year into homes, he said.
The Hawaiian Home Lands Department is expected to begin construction in 2008 on its largest residential development in the agency's history, the 403-unit East Kapolei I project.
While the project is being developed, DHHL will provide financial guidance under its Home Ownership Assistance Program to help correct credit problems, create savings accounts, and initiate debt reduction. Home applicants also will have access to specialty loans from American Savings Bank and Bank of Hawaii, Kane said.
"We are also in talks with other lenders and plan to introduce more programs," he said.
American Savings Bank pioneered the Hoolako Pono home loan program last year to offer construction loans and mortgages to DHHL lessees. Since than, more than $5 million has been awarded to date, with an additional $17 million in the pipeline, said Dawn Dunbar, a spokeswoman for American Savings Bank
"This program is long overdue and it is the right thing for us to do," said Marlene Lum, senior vice president of retail lending at American Savings Bank. "It is also up to the lessees to ensure a pono legacy for their children and future generations."
Bankoh's Hawaiian Home Lands Loan Program, which began in late September, is expected to further ease some of the traditional homeownership obstacles for native Hawaiians.
The loan, which is offered in conjunction with mortgage and credit counseling, offers more liberal income and credit guidelines, said John Gray, Bank of Hawaii senior executive vice president for mortgage banking.
"This program is part of our Bankohale initiative to address the issue of affordable housing in our state," Gray said. The bank also offers 11 other affordable housing programs.
While Bank of Hawaii has worked with DHHL in the past, this is the first time that the bank has developed a customized lending program for native Hawaiians, he said. "We worked very closely with DHHL to identify ways in which Bank of Hawaii could create a program that would remove some of the obstacles to home ownership among native Hawaiians, Gray said.
By easing minimum credit-score requirements from the traditional 620 points to 575, the bank will help more native Hawaiians qualify for home loans, he said. Bankoh will minimize its risk by offering mortgage and credit counseling programs, Gray said.
Hawaiian Home Lands lessees can use the Bankoh Hawaiian Home Lands Loan Program for new home loans, refinancing of existing home loans or construction financing.
"This program will help ensure long-term tenancy for the beneficiaries and their successors so that they can preserve the values, traditions and culture of native Hawaiians," Gray said.