Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 9, 1 September 1994 — OHA launches new affordable housing program [ARTICLE+ILLUSTRATION]

OHA launches new affordable housing program

Trial mortgage program with Castle & Cooke, FHB

bv Ellen Blomquist An innovative affordable housing program for Hawaiians has been approved by the Office of Hawaiian Affairs Board of Trustees for homes developed by Castle & Cooke within the Royal Kunia, phase I development in 'Ewa. Castle and Cooke has offered to OHA affordable homes for its Hawaiian beneficiaries ranging in price from $182.500 to $287,000. lnitially, 10 homes will be offered to Hawaiians as a pilot program. and other units may heeome available if the program is successful. Hawaiians who qualifv and are selected under the trial mortgage program will receive a $4,000 discount off the purchase piiee and waiver of certain escrow and title fees whieh result in addi-

tional discounts. For instance, a $181,000 home will cost no more than $172,000 under this program. OHA chairman Clayton Hee said at the board's Aug. 15 meeting that the program helps the Hawaiian people without spending "a single penny of OHA native Hawaiian trust funds." and reflects that "many people, eompanies and institutions want to help Hawaiians. They called OHA. They offered their units, their escrow fees and their money to all of us. The Hawaiian people." Tom Leppert. pre.sident of Castle & Cooke said. "We're Very excited about the possibility of this program. We're hopeful that the program will benefit all involved."

First Hawaiian Bank is making available $5 million in Hula Mae funds for this program, and will waive their standard $500 appraisal fee and charge just half of the normal one percent loan processing fee. According to Gary Kai, senior vice president, retail loan division, "We're very pleased to be participating in this test program. It's part of the key to solving the affordable housing crisis for Hawaiians." Castle & Cooke has also offered a portion of $60 million commitment in Hula Mae funds for the program onee logistical details are worked out with their lender, Honolulu Mortgage Co While the trial mortgage program is based on Hula Mae, applicants may, of course, select a different financing program or financial

institution that best meets their needs. though the only loan processing discounts offered at this time are from First Hawaiian Bank. Under Hula Mae, mortgages are 30-year fixed at 6.375 percent, with a minimum down payment of 5 percent of the purchase price to owner-occupants. Eligibility requirements include maximum ineome limits of $59,800 for families of less than three and $69.800 for families of three or more. Applicants must be U.S. citizens and Hawai'i residents 18 years of age or older. and eannol have owned property in the last three years. Also required is participation in a homebuyer education program, to acquaint novice buyers with the process of buying

a home. Hee noted that home mortgage interest rates have been rising over the past months, with interest rates near nine percent for 30year fixed mortgages at Hawai'i banks. "lt's not surprising the majority of the Hawaiian people don't qualify," he said, "but this program provides our people an opportunity to purchase new homes at substantial savings." OHA, through its administration, is presently working out the procedures to verify applicants for the two- and three-bedroom homes. A lottery system is planned because it has been used and proven to be fair and effective by county and state government agencies. continued on page 19

Typical multifamiiy units at Royal Kunia phase 1.

Affordable home mortgage pilot program from page 1 OHA's role will be to verify eaeh applicant's Hawaiian ancestry through its Operation 'Ohana Hawaiian enrollment and ancestry verification program. Hawaiians who need to verify their ancestry may eall Operation 'Ohana at 594-1959 or 594-1960. A birth certificate or additional documents will be required. Onee ancestry is verified through Operation 'Ohana, individuals will need to eome in to OHA's housing division to put their name on a list to be considered for this mortgage program and the lottery drawing. (Neighbor island residents should contact their loeal OHA offices for further details.) Details on the closing date for the lottery, drawing date and location will be announced soon. Applicants are encouraged to preview model units. Fifty verified Hawaiians will be chosen by lottery from the list. Castle and Cooke sales representatives will then process and prequalify successful applicants for bank loan approval. The first ten to qualify for a home loan will receive the first ten units at a discount offered by Castle & Cooke.