Hula Mae drops
mortgage rate
to 4.45%

The state mortgage loan program dropped its rate for 30-year fixed loans to 4.45 percent from 5.76 percent yesterday, the lowest since it began in 1979.

Can Hula Mae help you?

These are elements of the Hula Mae program, which is designed to help first-time home buyers who have low or moderate incomes:

» Loans can only be used for owner-occupied dwellings in Hawaii.

» Maximum loan amounts for fee simple, newly built or existing homes are $555,802 on Oahu, $500,565 on Maui, $540,000 on Kauai and $360,000 on the Big Island. Leasehold residences and units under construction are subject to adjustments.

» To be eligible, families of three members or fewer must have income of $81,360 or below on Oahu, $81,480 on Maui, $77,520 on Kauai and $68,400 on the Big Island.

» Income for families of more than three cannot exceed $94,920 on Oahu, $95,060 on Maui, $90,440 on Kauai, and $79,800 on the Big Island.

» For more information, visit www.hcdch.hawaii.gov or call the Hula Mae hotline at (808) 587-0567.

More than 150 low- and moderate-income families are expected to be able to tap into this cycle of the Hula Mae mortgage loan program.

"The low mortgage rate will provide the funding that many first-time home buyers so desperately need, especially in the current housing market," said Stephanie Aveiro, executive director of the state Housing and Community Development Corporation of Hawaii.

Qualifying Hula Mae buyers must live in Hawaii and meet income, age and other criteria. They also must pledge to reside in the home throughout the term of their Hula Mae mortgage.

Hula Mae buyers can use the loans to buy new and existing single-family homes and condominiums in the state. Leasehold residences may also be purchased using Hula Mae financing, but the remaining term of the lease must be at least 35 years and the lease rent must be fixed for no less than 10 years from the date of the mortgage loan.

The current Hula Mae mortgage cycle was funded through a recent sale of $75.2 million in tax-exempt revenue bonds by the Housing and Community Development Corp., said spokeswoman Georgina Lopez.

"It will provide $49.5 million in lendable proceeds," Lopez said.

Before this sale, the agency had issued $1.7 billion in bonds, enabling 9,680 low and moderate income families to enter into the housing market, she said.

The new loan rate is expected to make the Hula Mae program more competitive. In 2003, when home mortgage rates began hitting all-time lows, Hula Mae was having difficulty attracting business and participating lenders reported a drop in new loans.

Hula Mae's 4.45 interest rate compares favorably to conventional rates. Hula Mae home buyers and sellers also must split a one-time 2 percent charge. The national average for a 30-year fixed-rate mortgage was 5.66 percent yesterday.

The new loans, which are available today, can be obtained through American Savings Bank, Bank of Hawaii, Countrywide Home Loans Inc., First Hawaiian Bank, Hawaii HomeLoans Inc., HomeStreet Bank and Wells Fargo Home Mortgage of Hawaii LLC.

The participating lenders accept and review loan applications to determine eligibility.

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