(Honolulu, HI.) Hawaii home buyers are keeping a close watch on pending changes USDA boundaries that will take effect in September. Some areas will disappear from the 100% financing, including:
- Ewa Gentry
- The old Ewa Beach area
- Kapolei (and Makakilo)
- Royal Kunia
- Village Park
USDA loans require zero down for financing, which is similar to what was offered in the old subprime era. These loans are highly desirable to a first-time home buyer and others who have little cash for down payment.
The USDA said, “Current eligible rural areas will continue until September 30, 2013, since we will defer transition to the 2010 census information until that time. So, the current eligible areas will remain eligible, and there will be no NEW eligible areas at this time.”
Oahu Boundaries to Disappear
- Village Park and Royal Kunia subdivisions
- Ewa Beach
- The entire Waianae Coast
- Central Oahu – from Whitmore Village, north to the North Shore; also the Kunia area
- The entire North Shore
- Windward Oahu – from Kahuka, south to Ahuimanu
- Waimanalo – from Olomana Golf course to Seal Life Park
USDA Boundaries and New Areas Eligible in September
- Ewa Beach – West Loch, Ewa Villages and Ocean Pointe
- Ahuimanu, from the north side of Haiku Road and all areas north to Kahuku
- North Shore
- Whitmore Village
- Waipio Acres
Current and Future USDA Eligibility Map
To find out if the home you are looking at is within the new USDA boundaries, click on the future eligibility map posted on USDA’s Website. Simply type in the property address or browse an area on the map to see if a potential property will be eligible after September 30, 2013.
Facts About USDA Loans
- Current USDA-eligible areas cover 97% of the nation’s land mass
- There are 109 million people living within current USDA-eligible areas
- The new USDA boundaries only reduce eligible land mass by 0.3%, but this land mass represents 8% of the population.
FAQ: New Boundaries for USDA Home Loans
Answers to most frequently asked questions about the new boundaries (according to USDA):
Q: What is the absolute latest date for the existing boundaries?
A: When changes like this one are implemented, usually the USDA office in your jurisdiction must accept your loan prior to the date of the change. For the USDA to receive your loan on time, it must go through processing and underwriting at your lender, who then sends it to USDA.
In short, if you find a home that will become ineligible due to the change, you should apply with your lender 30-45 days prior to September 30, 2013. There will most likely be backups in USDA offices due to borrowers trying to purchase homes before the cutoff.
Q: My home looks like it won’t be in an approved area after the boundary changes take effect. Can I refinance my USDA loan after that date?
A: Yes. As long as you have a USDA loan and meet other USDA refinance qualifications, you can refinance even though you are no longer in a USDA-eligible area.
Q: Do all lenders follow the same USDA boundaries?
A: All USDA loans underwritten by authorized USDA lenders must follow all underwriting guidelines, including eligible property boundaries.
Q: Does the property have to be in an eligible area if I apply directly with the USDA for my loan?
A: Yes, regardless of where you obtain your USDA loan, property location is required to be in an eligible area.
Q: Can the boundaries change after September 30 yet again?
A: Boundary changes are established using official census information and will not change until after the next census is reviewed, after 2020.
Q: Are USDA loans tied to the census?
A: Yes. The United States conducts a census every 10 years. The 2010 census revealed changes to population that will make some areas ineligible for USDA financing.
Interested in Purchasing a USDA-Eligible Home on Oahu?
If you live in or around the suburbs, or in Metro Honolulu, it’s likely that your area will no longer be USDA eligible. Contact me should you be interested in purchasing a USDA-eligible property.