HHOC Empowers Homebuyers with Down Payment Assistance Loan
Hawaii HomeOwnership Center (HHOC), in partnership with HHOC Mortgage, extends a helping hand to aspiring homeowners through the Down Payment Assistance Loan (DPAL) Program. This initiative is dedicated to assisting eligible individuals who aspire to own a home but require financial support to cover the initial expenses, including the down payment, closing costs, and prepaid items necessary for homeownership. These upfront costs can be substantial, often acting as a barrier to transitioning from renting to owning a home.
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Available Assistance The DPAL Program empowers borrowers to realize their homeownership dreams with a modest 5 percent down payment, eliminating the need for mortgage insurance through a second mortgage—the down payment loan. Eligible applicants can access a maximum loan amount of $75,000, which features a fixed 20-year amortization schedule, with repayment due in 15 years. The program offers interest rates of up to 2 percent above the first mortgage rate.
Eligibility Requirements To qualify for the DPAL program, applicants must meet specific criteria. First and foremost, they must be first-time homebuyers, with eligibility limited to individuals who haven’t owned a home in the past three years. Additionally, applicants are required to maintain a mid-FICO credit score of no less than 700.
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Homebuyer Education Mandatory participation in homebuyer education is a crucial component of the DPAL program. Applicants must complete approximately 9 hours of homebuyer education through the Hawaii HomeOwnership Center, either through live classes or online courses. Furthermore, applicants must undergo one counseling session with HHOC.
Property Guidelines Under the DPAL Program, the purchased home must serve as the applicant’s primary residence. Eligible property types encompass single-family residences, condominium units, and townhouses. For applicants making no more than the minimum 5 percent down payment, the property’s purchase price must not exceed the program’s maximum limit of $500,000.
Note: While seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, state and Local government agencies retain the authority to assist borrowers in financing their homes through second mortgages and grants. These agencies establish various requirements that borrowers must meet to qualify for grant programs, including considerations related to property location, purchase price, and income limits.
