Is Homeownership More Attainable?

One of the biggest misconceptions about buying a home is that you need a 20% down payment. While putting 20% down can have advantages, it isn't the only path to homeownership.

Depending on the buyer and property, financing options may include conventional loans with lower down-payment requirements, FHA loans, VA loans for eligible borrowers, USDA loans for qualifying rural properties and buyers, and other homebuyer assistance programs.

For Hawaiʻi Island buyers, this can be especially important because many communities may have properties that qualify for programs buyers haven't previously considered. The first step isn't necessarily saving 20%. It's understanding what financing options are available based on your individual circumstances.

Another important consideration is location. Real estate conditions can vary significantly between Waimea, Waikōloa, Kona, Hilo, Puna, Kohala and other communities across the island.

Property type, elevation, climate, acreage, zoning, utilities and even financing considerations can differ from one area to another. That means a buyer who feels priced out of one neighborhood may have very different opportunities elsewhere.

Instead of beginning the search with, "Can I afford a home in Hawaii?" a more useful question may be: "What can I afford, and where on Hawaii Island could that budget take me?"

The asking price is only one part of determining whether a property is affordable. Buyers should also consider estimated mortgage payments, property taxes, insurance, homeowners or association fees when applicable, utilities, maintenance and potential improvements.

Hawaii Island properties can also come with considerations that aren't as common in other markets. Depending on the property, buyers may encounter catchment water systems, septic or cesspool systems, agricultural zoning, private roads, unpermitted improvements, lava zones or unique insurance requirements.

Understanding these details before purchasing can be just as important as negotiating the price.

Affordability isn't only about what it costs to buy. The cost of continuing to rent should be part of the comparison too, particularly when rental rates are only increasing as rental availability is decreasing and moving from one rental to another brings its own recurring costs.

With a fixed-rate mortgage, the principal and interest portion of the payment can remain consistent over the life of the loan, although property taxes, insurance and other housing expenses may change. Mortgage payments and "sweat equity" also help build ownership in an asset that may gain value over time, while rent payments do not create ownership for the tenant.

Homeownership may also provide certain federal or state tax benefits, such as potential deductions related to mortgage interest or property taxes, depending on the homeowner's individual circumstances and current tax rules. These benefits are not available to every homeowner, so buyers should discuss their situation with a qualified tax professional rather than assuming a particular tax savings.

Sometimes prospective buyers wait years because they've already decided they won't qualify for financing. A conversation with a qualified lender can provide a much clearer picture.

Even if you're not ready to purchase today, you can learn what price range may be realistic, approximately how much cash you may need, which loan programs you could potentially qualify for and what steps could put you in a stronger position to purchase later. If buying isn't possible yet, having a plan is very different from simply assuming it's impossible.

In Hawaii, a home represents more than a financial investment. For many families, it's about stability, staying close to ʻohana, raising children in the community they love and creating something that can potentially be passed down to the next generation.

As someone born and raised in Hawaii and now raising my own family on Hawaii Island, I understand how important those roots can be. My approach to real estate is centered around education first. You don't need to be ready to buy tomorrow to start asking questions today.

If you've wondered whether homeownership on Hawaii Island could be possible for you, let's start with a conversation. We can look at your goals, explore different communities and help you understand the options available so you can make an informed decision about what comes next and how to prepare now for tomorrow's homeownership dream.

Jenna