Ka Wai Ola - Office of Hawaiian Affairs, Volume 13, Number 12, 1 December 1996 — Board approves $10 million program OHA-Habitat partnership helps Hawaiians build homes [ARTICLE+ILLUSTRATION]

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Board approves $10 million program OHA-Habitat partnership helps Hawaiians build homes

A $10 million revolving loan program to help low and very low ineome Hawaiian families own homes was approved by the Office of Hawaiian Affairs Board of Trustees. This program is the first in the nahon for indigenous people whieh would make financing available for self-help home construction projects on private lands as well as Hawaiian homelands. Habitat for Humanity, the nahonal self-help program led by Millard Fuller with the active participahon of former President Jimmy Carter, would administer the ioeal program. "This is specifically targeted to Hawaiians who earn too little to qualify for low ineome financing programs such as the Hula Mae pro-

- >*■: Mn - ■• Wfrn fft M m by Barbra An Pleadwell gram," Clayton Hee, OHA board chairman, said. "This is a financing program for people who otherwise would not be able to build and own their own homes." Department of Hawaiian Home Lands Chairman Kali Watson said, "This program will eliminate one more barrier in our commitment to house more Hawaiians. This is a huge stride in the partnership between OHA and DHHL." "This program will spur mueh needed "Building homes" continued on page 4

-Zf I Building homes for Hawaiians through OHA-funded self-help

continued from page 1 home construction for Hawaiians and boost the economy in the Hawaiian community," said Moanike'ala Akaka, outgoing OHA Trustee and Chair of the Planning, Eeonomie Development, and Housing Committee. Banks and conventional lenders don't create such programs. They believe the risks are too great. Originating and servicing loans to very low ineome families requires sensitivity, pahenee and lots of credit and budget counseling. Private lenders don't have these capabilities.

To qualify for Habitat loans, you must: • have an identifiable housing need • be willing to partner with Habitat, invest personal time in building your house and houses for other Habitat families • have a sufficient, steady source of ineome for regular mortgage payments.

For the past two years, OHA expanded its support of self-help housing projects for Hawaiians. Self-help housing represents the most affordable means for low and very low ineome famihes to achieve home ownership. "Sweat equity," where participants contribute mueh of the labor, saves families thousands of dollars on the cost of their homes by lowering the amount they need to borrow, and increasing their chances for qualifying for a loan.

Most Hawaiian famihes with incomes 50 percent or below the median family ineome find it nearly impossible to become

home owners. This is true even for Hawaiian Home Land awardees, 999-year homestead lessees, long-term lessees of State land (Maunalaha Valley, Kahana, and Kikala-Keokea), and kuleana owners, who have land on whieh they ean build. Money is the primary obstacle they face. Low ineome and related credit problems prevent them from home construction hnancing from private and most public lenders. "With proper leverage, this will allow all Hawaiians to borrow up to $20,000 at zero interest for home construction on homelands as well as on privately owned vacant property," Hee said. Last year OHA's Board of Trustees approved a $1.7 milhon, zero interest loan to Kaua'i Habitat for Humanity. This money has been used to help finance the cost of materials and subcontract labor for 100 self-help homes. Kaua'i Habitat is now also planning for the development of another major selfhelp initiative on Kaua'i's west side. OHA's Housing Division is starting self-help projects on Moloka'i, O'ahu and the Big Island.

OHA and the Department of Hawaiian Home Lands have partnered for several self-help housing projects. This photo was taken at a housing construction project on the Big lsland in 1991. Enrolling Hawahan families in these projects has been difficult because many fail to meet the qualifications for existing loan programs. Many Hawahans have been pre-qualified for self-help housing projects, but loan funds are not available for them. OHA's Housing Division proposes that Ioans for these projects be made at a rate of 1.5 percent. The 1.5 percent interest wih be paid by Hawai'i Habitat for Humanity to OHA as means to offset administrative costs related to the program.

For more information, eall your loeal Habitat affiliate. (808) 935-6677 Big lsland (808) 988-9339 Honolulu (808) 245-1996 Kaua'i (808) 567-6644 Moloka'i