Buying Advice

How to Qualify for Reserved Housing in Hawai’i

With the median condo price increasing from $456,500 (April 2017) to $690,000 (April 2018), based on HBR’s local market stats for Ala Moana-Kaka’ako, it’s no wonder that many first time home buyers find themselves watching from the sidelines.

As Howard Hughes is getting ready to release the reserved housing units for their new development project A’ali’i, I attended one of their seminars to learn more about how to qualify for a purchase, and I am pleased to share that information. Click here for a downloadable version of all the information below.

Reserved Housing vs. Affordable Housing

  • Reserved housing and affordable housing are similar but managed by different state organizations. reserved housing is run by HCDA (Hawaii Community Development Authority) whereas affordable is run by HHFDC (Hawaii Housing Finance and Development Corporation).
  • Period of residing in the unit: reserved housing (HCDA) has 2, 5, or 10 year periods whereas affordable housing (HHFDC) is 10 years. A’ali’i in Ward Village will only be using 2 or 5 years.

Why Reserved Housing?

Any new development asking for:

  • Zone change
  • Increased density
  • Maximum height variations

Must set aside at least 20% of units to go towards reserved or affordable housing.

Those units are reserved for households making 80-140% of the area median income (AMI).

Waikiki Beach


From their website:

“The Hawai‘i Community Development Authority (HCDA) is a public entity created by the Hawai‘i State Legislature to establish community development plans in community development districts; determine community development programs; and cooperate with private enterprise and the various components of federal, state, and county governments to bring community development plans to fruition. The Authority’s work should result in economic and social opportunities and aim to meet the highest needs and aspirations of Hawai‘i’s people.”

The HCDA also oversees Kaka’ako Housing Projects.

Income Qualifications

  • Market Driven   Regular Sales
  • 80% – 140% of Area Median Income (AMI)   Reserved Housing
  • < 60% of AMI   Low Income (Rental)
  • < 30% of AMI   Very Low Income (Rental)

What is Reserved Housing?

Using Howard Hughes – A’ali’i project as an example:

  • Allows eligible purchasers to buy at BELOW market prices
  • Lower down payment (10%)
  • Gift funds and co-signers can provide support to eligible purchasers
  • Must be eligible under HCDA guidelines
  • Must qualify for a loan

Occupancy Guidelines:

  • Studio: 1-2 people
  • 1 Bedroom: 1-3 people

Eligibility Requirements

  1. Is a citizen of the United States or a resident alien;
  2. Is a bona fide resident of the State;
  3. Is at least of legal age;
  4. Does not have a majority interest in a principal residence or a beneficial interest in a land trust on a principal residence within or without the State for a period of three years immediately prior to the date of application for a reserved housing unit;
  5. If married, whose spouse does not have a majority interest, in a principal residence or a beneficial interest in a land trust on a principal residence within or without the State for a period of three years immediately prior to the date of application for a reserved housing unit;
  6. Shall be the owner and occupant of the reserved housing unit; and
  7. Has never before purchased a reserved housing unit.

Kaimana Beach

HCDA Asset Verification

125% Assets Limits (2018 Maximum)

  • 1 person $117,625
  • 2 people $134,375
  • 3 people $151,188

Included Under Assets

  • Cash
  • Securities
  • Real and personal property at fair market value (CDs, stocks, mutual funds)

Excluded Under Assets

  • Gifts
  • Retirement accounts (401K, IRA, Life Insurance)

HCDA Income Verification

140% AMI (2018 Maximum)

  • 1 person: $94,100
  • 2 people: $107,500
  • 3 people: $120,950

Assistance to Qualify

A) Co-Signer

  • Can be any person
  • Loan application and income verification from co-signer
  • Cannot be on title

B) Gift Letter (for down payment)

  • Must be from a relative
  • No limit
  • Cannot be on title
  • Cannot be cash transfer to applicant (verify guidelines)

HCDA Buyback & Shared Equity Guidelines

  • Eligible Purchasers can buy below market value for a regulated term of 2 or 5 years
  • If elect to sell prior to regulated term, HCDA has first option to buy
  • HCDA will resell to another eligible purchaser
  • At the time of the sale, buyer will pay HCDA shared equity (market price less reserved
    housing price)
  • HCDA uses these funds to subsidize other affordable projects


Reserved Housing price for a home: $400,000

Original Appraised value for a home: $500,000

Shared equity equals: $100,000

Home sells later for: $600,000

HCDA keeps $100,000 / Seller keeps $100,000

Aalii pool

The Pool at the ‘A’ali’i

Howard Hughes – A’ali’i

Total of 60 podium studios and 90 tower one bedrooms for Reserved Housing.

Project Lenders that buyers must use for pre-qualification letter:

  • Honolulu Home Loans
  • Bank of Hawaii
  • First Hawaiian Bank

Provide lenders with:

  • 3 years of tax returns (2017, 2016, and 2015)
  • W-2
  • Pay stubs
  • Verification of assets
  • And any gift letter with verification of funds (if receiving assistance with the down payment)

Units offered by lottery (may change).

Additional Resources and Acknowledgements

HHFDC is the other state agency used for affordable housing.

HCDA is more generous in establishing AMI.

This presentation was compiled with material from a Howard Hughes Reserved Housing Seminar and
with the assistance of Jonathan TL Pang (R), RB-22025 Aalii New Home Ambassador | Ward Village

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Angela Faria

January 14, 2021

Can a returned vet be eligible to apply on 5 % hecgas never received anybassistanctvto date from veteran’s association?

He is 72 years old, and I am his wifevand 71 year-old. We have ccombinded monthly income $4-500 plus as Noel Curtis Faria my husband receives an other small.pension from The Americal Social Serurity of $280-00 dependingbon the exchange rate depending on the exchange rate between the USA and the Australian? Noel wascraised in Honolulu Hawaii. But has resided in Australia for many years. We look forward to hear from you. Kind.regards,, Angela & Noel Faria.

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