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Mortgage Insurance Available for Native Hawaiians |
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One of the biggest impediments to homeownership for native Hawaiians has been their inability to obtain conventional mortgages, says Gayle T. Ota, a housing program specialist in HUD's Honolulu office. Created by the National Housing Act amendments of 1983, the Hawaiian Homelands program became operational in 1987. "Under the program HUD provides mortgage insurance so that borrowers can build on state-owned Hawaiian Homelands property," says Ota. The sites, scattered throughout the islands, are either donated to or acquired by the state. When applying for homestead leases, program participants may indicate preference for a particular island. Native Hawaiians are less likely than other population groups in the state to own their own homes; the Hawaiian Homelands program, operated by the Department of Hawaiian Home Lands, addresses this need. "The program has been very successful," Ota reports. As of April 2000, the Hawaiian Homelands program had helped 1,345 Hawaiians obtain conventional mortgages. Hawaiian Homelands verifies that a prospective borrower is a native Hawaiian (having at least 50-percent Hawaiian ancestry) and grants the borrower a homestead lease. "The land, owned by the state, is leased to individuals for 99 years," says Ota. Under the newer leases, participants pay no property taxes for the first 7 years of homeownership. Participants may sell their homes to other native Hawaiians. Once the state verifies a prospective purchaser's ancestry, it issues the seller an entitlement to sell and grants a homestead lease to the purchaser. A home is appraised for sale or refinancing, and "no value is given to the land, only the house," says Ota. The Hawaiian Homelands program is separate from other HUD and Federal Housing Administration homeownership programs. As with other programs on native lands, there is no provision for foreclosure. In the case of nonpayment, the mortgage is assigned to HUD, who in turn assigns it to the Homelands Department without recourse; the original mortgage lender may file a claim. When the program began, there was not enough support for participants. Recent initiatives such as HomeOwnership Hawaii assist participants with myriad homeownership details. A homebuyers' club, known in Hawaiian as a hui, shares information with clients about credit repair, selecting and building a home, budgeting, and the loan process. The program currently is being expanded to six Hawaiian islands. For more information, contact: Gayle T. Ota, Housing Program Specialist, HUD, Honolulu, Hawaii, (808) 522–8185.
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