Ka Wai Ola - Office of Hawaiian Affairs, Volume 9, Number 1, 1 January 1992 — Hula Mae loans low interest money [ARTICLE]

Hula Mae loans low interest money

Gov. John Waihee has announced that new Hula Mae mortgage funds, carrying a reduced 73/8 percent interest rate, are available at lending institutions in Hawai'i. The Hula Mae mortgage program provides low interest, 30year mortgages to low and moderate ineome families. The governor also announced the availability of an additional $59 3 million for loans to first time home-buyers. "This renewal of funding for Hula Mae is critieal for first time home-buyers. We must continue to offer special mortgage opportunities and increase the supply of affordable housing if we are to solve our affordable housing shortage," Waihee said. Approximately $40 million of the funds will be used to provide home-buyer mortgages in new construction projects, while $19 million is available for spot loans to the public. The state's Hula Mae program allows eligible

first time home-buyers on O'ahu to borrow up to $271,000 to purchase existing homes at prices up to $285,560. Existing purchase pnee Iimits on the neighbor islands are $261,020 for Maui, $215,940 for Kaua'i, and $165,360 for Hawai'i counties. Hula Mae also allows for the purchase of new homes, but there is a purchase price ceiling of $220,140 on O'ahu and $198,540 on the neighbor islands. Hula Mae's low interest rate and down payment, combined with a low purchase price on the affordable homes, make ownership opportunities available to people who cannot normally afford to buy. Interest rates on the new Hula Mae mortgage loans will be fixed at 7-3/8 percent for 30 years, as compared with the current market rate of about 8-3/4 percent on 30-year fixed rate mortgages. There are no asset limits, but eligible borrowers must not exceed the following ineome limits: O'ahu Other Islands Families of 3 or more $61,160 $54,560 Families of less than 3 $52,440 $47,440 HFDC is undertaking this current Hula Mae issue with the Federal National Mortgage Association (FNMA). The FNMA program will offer conventional mortgage Ioans, and allow for

more flexible underwriting and down payment requirements under their Community Home Buyers program. Hula Mae buyers pay only one point as loan origination fees. The minimum down payment ean be as low as 5 percent, subject to guidelines by the private mortgage insurer and the FNMA. Also, some single parents may be eligible to participate. The new Hula Mae funding was financed through a $119.5 million Single Family Mortgage Purchase Revenue Bond sale. The bond sale produced $59.3 million for loans and also refinanced an earlier Hula Mae bond issue. The Hula Mae Program was established in 1979 by the Hawaii State Legislature to provide below-market interest rate loans to first time homebuyers. To date the state's Housing Finance and Development Corporation, the administrating agency, has assisted approximately 6,000 families in purchasing homes of their own. Interested parties may receive information on the revised program at American Savings Bank, First Hawaiian Bank, General Mortgage Corporation, HonFed Bank, Honolulu Mortgage Company, Pioneer Federal Savings Bank and Territorial Savings and Loan Association.