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Down Payment Loan Program

Honolulu, Hawaii

Last verified
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Income limit

80% AMI

Of area median income; varies by county and household size

Repayment

Forgivable

Forgiven after 20 years

What is Down Payment Loan Program?

Down Payment Loan Program is a forgivable loan for homebuyers in Honolulu, Hawaii.

  • The City and County of Honolulu Department of Community Services (DCS) Down Payment Loan Program provides a zero-interest, zero-fee loan of up to $40,000 to qualified low- and moderate-income first-time homebuyers purchasing on Oahu. The loan is amortized over 20 years; at the end of each year the borrower makes on-time payments, an additional year's principal is forgiven, fully forgiving the loan by year 20. Borrowers must contribute at least 5% of the purchase price as cash down payment.
  • Zero-fee, zero-interest down payment loan up to $40,000 amortized over 20 years. At the end of each year that the borrower makes their payments on time, an additional year's worth of payments is forgiven - effectively forgiving half the principal by year 10 and all of it by year 20. Borrower must contribute at least 5% of purchase price as their own cash down payment.
  • Funding comes from Local, Federal, HOME, and CDBG.

Do you have to pay it back?

Down Payment Loan Program is forgiven after 20 years, so a buyer who stays that long does not repay it.

  • Repayment is triggered by Monthly payments over 20 years (with annual on-time-payment forgiveness reducing principal) and due at sale, refinance, or non-occupancy. Forgiven over 20 years.
  • The assistance is recorded in 2nd Lien position.
  • Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Down Payment Loan Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

The program requires

  • First-time homebuyer — the program sets its own definition
  • The home is occupied as a primary residence
  • On credit: Per first-mortgage product overlays
  • A completed homebuyer education course, through City and County of Honolulu-approved homeowner education course (e.g., Hawaii HomeOwnership Center) - completion required prior to loan application
  • Residency: Property must be located on the island of Oahu (City and County of Honolulu) and used as borrower's primary residence
  • Citizenship or immigration status: U.S. citizen or U.S. permanent resident
  • Must be first-time homebuyer (no current ownership of residential property). Must be U.S. citizen or U.S. permanent resident. Must purchase a property on the island of Oahu (City and County of Honolulu). Must complete a City-approved homeowner education course before loan application. Borrower must provide at least 5% of purchase price as cash down payment. Annual gross household income must be within DCS limits for family size (80% AMI baseline).

The program excludes

  • Manufactured homes
  • Households above 80% of area median income

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

Down Payment Loan Program limits household income to 80% of the area median income, which varies by county and household size.

  • Annual gross household income limits by family size, generally up to 80% of HUD Area Median Income for Honolulu County. 2025 Honolulu County 100% AMI = $129,300 (4-person). Seed range $77,950-$164,798 reflects family-size sliding scale and possible higher AMI tier. Verify current published income limits with DCS Loan Branch.
  • The limit applies to total household income, not only the borrower’s.
  • Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Down Payment Loan Program caps the purchase price as follows: Per first-mortgage product overlays; no published DCS purchase price cap.

  • Eligible property types include Single-family residence, condominium, townhouse - primary residence on Oahu.
  • New construction is eligible.
  • Manufactured homes are not eligible.

Where does it apply?

Down Payment Loan Program serves buyers purchasing in Honolulu, Hawaii.

How do you apply?

Applications for Down Payment Loan Program go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

    Required by the program, through City and County of Honolulu-approved homeowner education course (e.g., Hawaii HomeOwnership Center) - completion required prior to loan application.

  2. Contact the administering agency to reserve funds

    Funds are reserved through Direct application to DCS Loan Branch (808-768-7076) prior to or at time of purchase contract; subject to available funding, and are subject to availability.

  3. Work with a lender who handles the program

    Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.

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