HOME FINANCING · HI

Home Financing Guide for Maui County, Hawaii

Buying a home in Maui County is one of the biggest financial decisions you will ever make, and the local market has its own rules, programs, and costs that differ from the mainland. This guide walks you through what home financing looks like here — who qualifies, what documents you need, which local lenders and nonprofits can help, and what traps to avoid. Whether you are a first-time buyer, a solo contractor, or someone without a Social Security number, there are real pathways available to you in Maui County.

§ 01 — What it is

What Is Home Financing?

Home financing means borrowing money to purchase a home and repaying it over time, usually 15 to 30 years, with interest. The loan is secured by the home itself — meaning if you stop making payments, the lender can take the property. The most common types of home loans in Maui County are: • **Conventional loans** — offered by private banks and credit unions, typically requiring a credit score of 620 or higher and a down payment of 3–20%. • **FHA loans** — backed by the federal government, allowing down payments as low as 3.5% and credit scores starting around 580. They are popular with first-time buyers. • **VA loans** — for eligible veterans and active military, often with no down payment required. • **USDA loans** — for rural areas; parts of Maui County's more remote regions may qualify. • **Portfolio loans** — loans that local banks and credit unions keep on their own books, which means they can be more flexible about income documentation. These are especially important in Hawaii, where many workers have non-traditional income. Because Maui County home prices are among the highest in the nation — median prices often exceed $900,000 — loan limits here are higher than on the mainland. For 2024, the FHA loan limit for Maui County is $1,149,825 for a single-family home, which is the same as the conforming loan limit for the state of Hawaii. Always confirm current limits with your lender or the Hawaii Housing Finance and Development Corporation (HHFDC).

§ 02 — Who qualifies

Who Qualifies — and How Maui's Local Economy Shapes Eligibility

Maui's economy runs on hospitality, construction, agriculture, and small business. Many residents work in jobs with tips, seasonal hours, or self-employment income — all of which affect how lenders evaluate your application. Here is what matters most: **Credit score:** Most conventional lenders want 620 or above. FHA accepts scores down to 580 (with 3.5% down) or even 500 (with 10% down). Some local credit unions and CDFIs have more flexibility, especially if you have a strong savings history. **Income:** Lenders typically want to see two years of consistent income. If you work in tourism, construction, or as a solo contractor, bring both years of tax returns. Tip income counts if it is reported on your taxes. Self-employed borrowers should expect to show two years of Schedule C or business returns. **Debt-to-income (DTI) ratio:** Most lenders want your total monthly debts (including the new mortgage) to be no more than 43–50% of your gross monthly income. Given Maui's high home prices, this is a real challenge — local nonprofits and housing counselors can help you plan before you apply. **ITIN borrowers:** If you do not have a Social Security number but have an Individual Taxpayer Identification Number (ITIN), you can still qualify for a home loan. Several local lenders and credit unions in Hawaii offer ITIN mortgage programs. You will generally need 2 years of ITIN tax returns, a larger down payment (often 10–20%), and a strong history of on-time rent or bill payments. **Down payment:** Hawaii's high prices make saving for a down payment difficult. The state of Hawaii and Maui County have assistance programs specifically for this. See Section 4 for local resources.

§ 03 — What you need

Documents You Will Typically Need

Gathering your paperwork before you apply saves time and reduces stress. Every lender is different, but most will ask for: **Identity and residency:** - Government-issued photo ID (passport, driver's license, or state ID) - Social Security number OR ITIN (Individual Taxpayer Identification Number) - For non-citizens: visa, green card, or work authorization documents **Income verification:** - Last two years of federal tax returns (all pages, all schedules) - W-2s or 1099s for the last two years - Recent pay stubs (last 30 days) if you are a W-2 employee - Profit and loss statement if self-employed (your accountant or tax preparer can prepare this) - If you receive tips: IRS Form 4137 or employer tip statements **Assets:** - Last two to three months of bank statements (all pages, including zeros) - Statements for retirement accounts, stocks, or other assets - If your down payment is a gift from family: a signed gift letter and proof of transfer **Property:** - Purchase agreement (once you have an accepted offer) - Homeowner's association (HOA) documents if the property is in an HOA — very common in Maui **Other:** - Rental history (12–24 months of canceled checks or landlord contact info) - Explanation letters for any late payments, large deposits, or gaps in employment **Note for Maui specifically:** Flood zone designation matters here. Ask your lender and insurance agent early whether the property requires flood insurance, which adds to your monthly costs.

§ 04 — Where to start in Maui County

Local Lenders, CDFIs, Credit Unions, and Programs That Serve Maui County

This is the most important section. National banks are available, but local institutions often know Maui's market better, offer more flexibility, and are more likely to work with borrowers who have non-traditional income or no Social Security number. **Local and Regional Credit Unions:** - **Hawaii State Federal Credit Union (HSFCU)** — One of Hawaii's largest credit unions, serving Maui County. Offers mortgage products including portfolio loans, and has a reputation for working with members who have non-standard income. Membership is open to most Hawaii residents. - **Aloha Pacific Federal Credit Union** — Serves Hawaii residents including those on Maui. Offers home loans and financial counseling. - **Maui County Federal Credit Union** — Based in Wailuku, this credit union specifically serves Maui County government employees and their families, but membership eligibility has expanded over time. Worth a direct call to ask about eligibility. **Community Development Financial Institutions (CDFIs) and Nonprofits:** - **Hawaii Community Lending (HCL)** — A CDFI based in Hawaii that provides mortgage loans and down payment assistance, often serving borrowers who don't fit conventional bank requirements. They are known for working with low-to-moderate income borrowers and those with ITIN numbers. - **Hawaiian Community Assets (HCA)** — A HUD-approved nonprofit housing counseling agency serving Maui County. They do not lend money directly, but their free housing counseling can help you understand your options, clean up credit, and prepare a realistic budget before you apply anywhere. This is one of the best first steps you can take. - **Maui Economic Opportunity (MEO)** — Provides financial literacy and homeownership education programs in Maui County. They can connect you with local resources and programs. **State Programs (Administered Locally):** - **Hawaii Housing Finance and Development Corporation (HHFDC)** — The state agency that runs several key programs: - *Hula Mae Single Family Program*: Below-market interest rate mortgages for first-time homebuyers who meet income limits. - *Down Payment Loan Program*: A deferred, low-interest second mortgage to help with your down payment. Income limits and purchase price limits apply and are updated annually — visit hhfdc.hawaii.gov or call them directly for current figures. - **Hawaii HomeOwnership Center (HHOC Mortgage)** — A nonprofit mortgage lender and HUD-approved counseling agency operating statewide, including Maui. They offer below-market mortgages and are specifically designed to serve Hawaii residents who struggle to qualify through conventional lenders. **SBA District Office (for Contractor/Business Owner Borrowers):** - The **SBA Honolulu District Office** covers all of Hawaii, including Maui County. If you are a solo contractor or small business owner and are interested in how your business structure affects your mortgage eligibility (not an SBA business loan — those are different), the SBA's resource partners, including **SCORE Hawaii** and the **Hawaii Small Business Development Center (SBDC)**, can help you organize your income documentation in a way that lenders understand. **ITIN-Friendly Lenders:** - Hawaii Community Lending (HCL) and Hawaii HomeOwnership Center (HHOC Mortgage) are the most consistently cited ITIN-friendly mortgage options in the state. Some local credit unions also have ITIN programs — always call and ask directly, as policies change. **Property Tax Exemption Note:** Maui County offers a homeowner's exemption on property taxes for owner-occupants. Once you purchase and establish residency, file for this exemption with the Maui County Real Property Tax Division — it can meaningfully reduce your annual tax bill.

§ 05 — What to avoid

Hawaii State-Specific Regulatory Notes

Hawaii has several rules and characteristics that directly affect home financing. Understanding these before you apply will save you surprises. **Leasehold vs. Fee Simple:** This is critical in Hawaii and almost does not exist on the mainland. When you buy a home in Hawaii, you may be purchasing: - **Fee simple** — You own the land and the building. This is standard and what most buyers prefer. - **Leasehold** — You own the building but lease the land from a landowner (often a large estate or trust). Leasehold properties are harder to finance, often require higher down payments, and can have escalating lease rents. Many lenders will not finance leasehold properties at all. Always confirm whether a property is fee simple or leasehold before making an offer. **High Cost of Living Adjustments:** Hawaii's high-cost status means that conforming and FHA loan limits are significantly higher than the national baseline, as noted in Section 1. This is a real benefit for buyers. **Condominium Hotel (Condo-tel) Properties:** Many Maui properties are in condo complexes that allow short-term rentals. These are treated as investment properties or non-warrantable condos by lenders, which means higher down payments, higher interest rates, and limited loan options. If you are considering a condo in a resort area, ask the listing agent and your lender early whether the building is warrantable. **Hawaii's Strong Tenant and Foreclosure Protections:** Hawaii has non-judicial foreclosure for most mortgages, meaning a lender can foreclose without a court order, but the state also has a mandatory mediation program for owner-occupants. If you ever face hardship, contact a HUD-approved housing counselor (like Hawaiian Community Assets) immediately — do not wait. **State Licensing:** All mortgage loan originators in Hawaii must be licensed through the Nationwide Multistate Licensing System (NMLS). You can verify any lender or loan officer at nmlsconsumeraccess.org. Always do this check before sharing financial documents with anyone. **Short-Term Rental Regulations:** Maui County has been tightening rules around short-term rentals (STRs). If you are buying a property with the intent to rent it out on Airbnb or VRBO, consult a local attorney before purchasing — zoning restrictions and permit requirements have changed significantly, especially after the 2023 Lahaina fires prompted new community and government scrutiny of housing availability.

§ 06 — Ask a question

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