As housing prices continue to rise in Kauai, new home buyers are looking for more options on financing and inventory to match their capabilities. While the county of Kauai continues to work to increase affordable options for residents, the reality of finding a home for many first time home buyers can feel discouraging as coming up with the down payment is often the biggest hurdle to overcome.
It’s no secret that buying a home in a popular tourist destination can be extremely tough. As basic economics of supply and demand continue to ring true, inventory has gone down and prices have gone up… a lot. The median home price on Kauai is currently at $735,000 compared to $675,000 at this time last year, and the number has been steadily rising. Pulling together a 20% down payment for a standard conventional loan would equal $147,000, and that much cash is tough to produce for many Kauai residents.
If a buyer’s vision shifts a bit, then possibilities may start to open for many home shoppers. Within the last six months, three condominium developments in Lihue have been approved to accept FHA loans!
FHA (Federal Housing Administration) Approved Condominium List*
HALELANI VILLAGE at PUHI (approved 5/22/2018 – 5/22/2020)
THE VILLAS AT PU’ALI (approved 12/14/2017 – 12/14/2019)
HO’OLUANA at KOHEA LOA (approved 1/19/2018 – 1/19/2020)
Ho’oluana at Kohea Loa is an affordable housing development in Hanamaulu and follows income qualification guidelines as set forth by the County of Kauai. For instance, for a family of four, the current max annual income to qualify to purchase is $121,800. As a buyer, it is always helpful to have your interests represented in every transaction.
Buying a condo can be a great stepping stone or transition move. Whether building equity to eventually get that single family home on a piece of land or scaling down to minimize house and yard work, lower listing prices and government insured loan products to match help meet the needs of the community.
The County of Kauai will benefit overall in that increased approvals should help mobilize both buyers and sellers, which not only converts more renters into buyers, but it also frees up more rental housing which is in extremely high demand.
An FHA loan allows qualified home buyers to put down as little as 3.5%. Thus, on the same $735,000 median home price, the down payment now becomes $25,725, which may be much more palatable but still may be tough for some. However, with FHA loans, there are a lot of flexible down payment options such as gifts from family or equity from a family member’s property that also may be acceptable.
“I have $10,000 and OK credit. What can I buy?”
Good news! Let’s break down THE $10,000 PLAN for a $285,000 Halelani 2BD/1BA Condo.
- FHA Loan Approval
- Down Payment = $9,975
- Closing Costs — possibly negotiable with seller
“How much will my payments be each month?”
- Estimated Total Monthly Payment:
- Note: Mortgage Insurance is included
First things first… find a lender, do your homework, get pre-qualified, and then let’s make an offer!
A good lender is key. She is going to be one of your best assets in helping you get qualified for your FHA loan, and will help provide answers to your questions in how to get documents prepared, and manage your finances to achieve the best rates.
My clients have had success working with Valerie Harjo with Guardian Residential Lending in navigating this process all the way through the front door of their new home.
Now that you have been pre-qualified for a loan, you can start shopping! Call me to schedule a showing or ask a question on this process.
Not Yet Approved Condominiums
The following list of condominium projects have submitted documents but are not currently approved. Encourage your community members and HOA to get the documents submitted so that more housing may become available for everyone!
- 1176 PUUOPAE CONDOMINIUM
- EGGERKING ESTATES CONDOMINIUM
- KALAHEO PALI KAI CONDOMINIUMS
- KALAPAKI VILLAS
- LIHUE TOWNHOUSES
- SUN VILLAGE KAUAI
*HUD.GOV US Department of Housing and Urban Development / (HRAP/DELRAP Approval Method) as of 6/05/2018