Overview
Hawaii is, by a wide margin, the most expensive place in America to buy a home — single-family medians on Oahu run north of $1.1 million in 2026, and the statewide median sits in the high six figures to over a million depending on island and home type. The state's housing arm, the Hawaii Housing Finance and Development Corporation (HHFDC), exists largely to bridge that brutal affordability gap for local residents. The distinctive challenge here isn't just price — it's that you're often competing with mainland and investor cash, so the financing edge HHFDC provides can be the difference between buying and renting indefinitely.
HHFDC's flagship for buyers changed recently. The long-standing Hula Mae single-family mortgage has been replaced by the new Hale Kamaaina (home for residents) Mortgage Program, which began closing loans in early 2026. Hale Kamaaina offers competitive fixed 30-year financing — recently around 4.65% for government loans (FHA/VA/USDA) and 4.95% for conventional — with optional down payment assistance that can bring your required down payment as low as 5% of the price. To qualify you must be a first-time buyer, a bona fide Hawaii resident, buying a principal residence, and a graduate of a HUD-approved homeownership counseling course. Income limits are generous given local costs.
State Programs
Hale Kamaaina Mortgage Program
Low-rate fixed 30-year first mortgage with optional down payment assistanceMortgage Credit Certificate (MCC)
Federal income tax credit on mortgage interestHonolulu Down Payment Loan Program
Zero-interest, zero-fee down payment loanHHOC Down Payment Assistance Loan
Second mortgage down payment/closing cost loanFederal Programs Available in Hawaii
These nationwide programs can be combined with Hawaii state assistance for maximum benefit.
FHA Loan Program
Low down payment mortgageVA Home Loan
Zero down payment mortgageUSDA Rural Development Loan
Zero down payment mortgageTips for First-Time Buyers in Hawaii
HHFDC also offers a Mortgage Credit Certificate (MCC), which lets eligible first-time buyers claim a federal tax credit worth a percentage of the mortgage interest they pay each year — a benefit that stacks on top of the Hale Kamaaina mortgage and keeps paying off annually. Beyond the state, Hawaii's counties run their own down payment help. The City and County of Honolulu offers a Down Payment Loan Program providing up to $40,000 as a zero-interest, zero-fee loan for income-eligible first-time buyers, and nonprofit lenders like the Hawaii HomeOwnership Center administer down payment assistance second loans. These local layers can be combined with state financing.
Hawaii's tax picture is a study in contrasts. Its income tax is the steepest in the country at the top, with a graduated structure running from 1.4% all the way to 11% — so high earners pay dearly. But its property tax is the lowest in the nation: the statewide effective rate is roughly 0.29% of value, with counties ranging from about 0.22% in Maui County to 0.35% in Hawaii County. The practical effect is striking: on a $1,000,000 home, you'd pay only around $2,900 a year in property tax — about $240 a month — less in raw dollars than owners pay on far cheaper mainland homes. Honolulu also offers a home exemption that reduces taxable value for owner-occupants.
Hawaii hosts a major military presence — Joint Base Pearl Harbor-Hickam, Schofield Barracks, Marine Corps Base Hawaii, and others — which makes VA loans extremely relevant; a zero-down VA loan can pair with HHFDC's Hale Kamaaina program and county down payment help. Your practical roadmap: because affordable inventory is scarce and demand fierce, get fully pre-approved early, and complete a HUD-approved homebuyer education course through the Hawaii HomeOwnership Center (hihomeownership.org) — it's required for the state and most county programs. Confirm current Hale Kamaaina rates, income limits, and purchase-price caps directly at dbedt.hawaii.gov/hhfdc, and check your county housing office for the latest down payment loan amounts.
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Program details, eligibility requirements, and benefit amounts are subject to change. Verify all information directly with the administering agency before applying. Last verified: June 15, 2026.