Ka Wai Ola - Office of Hawaiian Affairs, Volume 17, Number 4, 1 ʻApelila 2000 — Get these mortgages while they last! [ARTICLE+ILLUSTRATION]

Get these mortgages while they last!

At three percent interest, i ■ - OHA's loans can't be beat.

By P ū u I o Durbln

0UALIFIED NATIVE Hawaiians living on Department of Hawaiian Home Lands (DHHL) lots have access to some of the most attractive mortgage terms in the United . But many kanaka maoli are still unaware that this bargain is available to them and they are instead signing onto more expensive mortgages. If you're a

DHHL lessee and want to build or improve a home, you should eheek out the options available through the Office of Hawaiian Affairs in partnership with DHHL and First Hawaiian Bank. OHA has appropriated $20 million in loans for self-help housing, home down payments, interim construction and home improvements at just 3 percent interest. FHB assists

I DHHL in I processing I loan appliea- | tions and furI therservices I the loan. The l bank is curI rently servicI ing 266 of [ these loans I to akamai I Hawaiians who have

borrowed $8,231,307 through the Hawaiian loan program that offers DHHL lessees four options: • up to $50,000 for home improvements; • up to $20,000 for down payments toward the purchase of a home; • up to $153,650 on Hawai'i and Kaua'i; $162,125 on Maui, Moloka'i and Lāna'i; and $188,250 on O'ahu for interim construction of a new home;and • up to $70,000 for self-help housing. "Home improvement loans help people who are already in a home spiff it up," explained Carol Marx, an FHB assistant vice

president with the bank's residential real estate division. To qualify, the borrower must meet certain cash flow requirements and must have paid back any previously obtained OHA loan, such as a loan for the down payment on the home. The OHA loan program balances salary, savings and debts to determine

whether an applicant will be able to make his or her payments. A eouple with, say, only a $200 monthly car payment and no other debts, would need a combined monthly ineome of just $1,335 to convince the bank they could repay a $50,000 home improvement loan in monthly installments of $277.30 over 20 years. The down payment loan has so far proved the most popular of the program's options and it accounts for almost 55 percent of all applications received. If the borrower has some savings to start, it is possible to eomhine this loan with a long-term, government-insured FHA loan. Assuming a $150,000 home financed through a 15-year, $20,000 down payment loan combined with a 30year, $134,940 FHA mortgage, the borrower is facing a monthly payment of $138 on his OHA loan and $1,068 on his

FHA loan. Interim construction loans are tailored to DHHL lessees who have an assigned lot in an aiea where the infrastructure has not yet been completed. When the infrastructure goes in, these lessees have a year in whieh to build their home. Through the OHA program they ean get a short-term loan for construction whieh they then pay off with their FHA loan when the construction is complete. finally, loans for self-help housing are available to those DHHL lessees willing to network with other families and assist eaeh other with building a home through a serious eomrnitment of time

and labor. "Usually six to 10 families are involved," said FHB Vice President Joyce Borthwiek. "They must have the same interests at heart." Assuming a 20year mortgage of $70,000 (whieh includes one-year of interest), the maximum amount available for a selfhelp home, the monthly mortgage payment is just $403.16. Assuming as well, a monthly

cash flow scenario that includes a $200 car payment, a household with an ineome of $1,627 would qualify. "We just closed a hui of six families in La'i'opua on the Big Island and they were all very excited about their low payments," Borthwick said. "They started in November and they are going to be done soon. Of course there's a lot of hard work, but it fosters a sense of eommuniHawaiians who want to build or improve a home should make a budget anel get prequalified early, she recommended. Upper household ineome limits apply and these vary according the number of people residing in the household and the island on whieh they live. "What's important is to take advantage of the program," Borthwick insisted. Interested Hawaiians on all islands should eall 808-643-LOAN (5626). ■

'We just closed a hui of six families in La'i'ōpua on the Big Island and they were all very excited about their low payments/ - Joyce Borthwick, Rrst Hawaiian Bank

Self-help homes in La'i'opua, begun in November, are almost ready. Financing through OHA's Hawaiian loan program lets a homeowner repay a maximum $70,000 self-help mortgage with monthiy payments of just $403.16 spread over 20 years.

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