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.

Down Payment Loan Program is forgiven after 20 years, so a homebuyer 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.

Down Payment Loan Program is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time homebuyer" usually means not having owned a home in the last three years, but the program sets its own definition. On credit, the program states: Per first-mortgage product overlays. A homebuyer education course is required, through City and County of Honolulu-approved homeowner education course (e.g., Hawaii HomeOwnership Center) - completion required prior to loan application. Residency requirement: 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).

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.

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.

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

Applications for Down Payment Loan Program go through the administering agency, which publishes the current terms and the application steps on its own site. 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. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.