First-time home buyer programs in Hawaii: assistance, loans and real costs

Hawaii pairs the lowest effective property tax rate in the country with the highest home prices, so the mortgage payment itself — not taxes — dominates affordability, and the MCC’s annual tax credit is worth more here than almost anywhere. That is the one sentence to keep in mind while reading the programs below.

State housing agency	Hawaii Housing Finance and Development Corporation (HHFDC)
Median home price (approx.)	$850,000 — statewide order of magnitude; metros differ
3.5% / 5% / 20% down	$29,750 / $42,500 / $170,000 on the median
Property tax (effective)	about 0.29% — roughly $2,465 a year on the median
Mortgage credit certificate	Yes — mortgage credit certificate offered
Transfer tax	Hawaii’s conveyance tax is graduated by price and ownership type: starting at $0.10 per $100 (0.1%) for owner-occupants under $600,000 and rising through several brackets for higher prices and non-owner-occupied property.

The Hawaii housing agency’s programs

The Hawaii Housing Finance and Development Corporation (HHFDC) focuses its first-time buyer support on the Mortgage Credit Certificate program, while the counties — Honolulu, Maui, Hawaii and Kauai — run down payment loan programs and affordable-housing lotteries. The Department of Hawaiian Home Lands serves eligible native Hawaiian beneficiaries separately.

The down payment help, and how it must be repaid

Every assistance dollar comes in one of four shapes — grant, forgivable, deferred or repayable — and the shape decides what it costs you over ten years. Get it in writing before you apply. See how down payment assistance programs work.

Is there a first-time buyer tax credit?

Who qualifies: income, price and credit limits

MCC income and purchase price limits are set by county and are high relative to the mainland because of Hawaii’s prices; county DPA programs typically cap household income at 80% to 140% of area median income. Leasehold and fee-simple ownership both exist — check which you are buying.

Closing costs, transfer taxes and who pays them in Hawaii

Hawaii’s conveyance tax is graduated by price and ownership type: starting at $0.10 per $100 (0.1%) for owner-occupants under $600,000 and rising through several brackets for higher prices and non-owner-occupied property. It is customarily paid by the seller.

Hawaii closings run through escrow companies; buyer closing costs of about 1% to 2% are low as a percentage but large in dollars given prices, and condo buyers should budget for association document fees and reserve contributions. Sellers can pay a share of these costs within program limits — see seller concessions — and our closing costs guide covers the rest.

The numbers on a typical Hawaii home

On a home at Hawaii’s rough median of $850,000, here is what the three standard first-time structures look like at an illustrative 6.5% rate — principal and interest only, before homeowners insurance and any mortgage insurance. The tax column uses the state’s approximate effective rate of 0.29% (about $2,465 a year on this price). Neither number is an offer; both are the right order of magnitude for a budget.

Structure	Down payment	Loan amount	P&I at 6.5% (30 yr)	Property tax / mo (est.)
FHA, 3.5% down	$29,750	$820,250	$5,185	$205
Conventional, 5% down	$42,500	$807,500	$5,104	$205
Conventional, 20% down (no PMI)	$170,000	$680,000	$4,298	$205

Illustrative rate and approximate state figures — not an offer or a quote. Full payment tables cover $150,000 to $800,000 at 5% to 8%; the affordability guide explains how lenders size the loan.

Frequently asked questions

Does Hawaii have down payment assistance for first-time buyers?

Statewide cash DPA is limited; the City and County of Honolulu’s Down Payment Loan Program and similar county programs offer low-interest or deferred loans to income-qualified first-time buyers, and HHFDC’s affordable-unit lotteries sell below-market homes with resale restrictions. Amounts and structures are updated regularly; treat the figures here as the shape of the program and verify the current numbers with the agency.

Is there a first-time home buyer tax credit in Hawaii?

HHFDC’s Mortgage Credit Certificate program gives first-time buyers a federal tax credit on a portion of annual mortgage interest for the life of the loan, subject to income and purchase price limits by county. An MCC must be issued at closing — it cannot be added to an existing loan — so ask about it before you choose a lender.

What are typical closing costs when buying a house in Hawaii?

Hawaii closings run through escrow companies; buyer closing costs of about 1% to 2% are low as a percentage but large in dollars given prices, and condo buyers should budget for association document fees and reserve contributions. Hawaii’s conveyance tax is graduated by price and ownership type: starting at $0.10 per $100 (0.1%) for owner-occupants under $600,000 and rising through several brackets for higher prices and non-owner-occupied property.