Reserved Housing 2011 Mauka Area Rules FAQ
What is Reserved Housing under the 2011 Mauka Area Rules?
On Oahu, the Kaka`ako district in Central Honolulu is becoming an attractive and convenient residential community that represents a unique housing opportunity for Hawaii residents trying to relocate closer to the Honolulu business district and Waikiki and substantially reduce their daily commute time to work. Reserved housing is designed to provide affordable housing in the Kaka’ako area for buyers earning less than 140 percent of Honolulu area median income (AMI) as established from time to time by the United States Department of Housing and Urban Development (HUD). The current AMI is $82,600.00 and 140% of that is $115,640.00 All buyers will need to go through a qualifying process to ensure they meet the HCDA reserve housing requirements as well as lender requirements.
What are the qualifications for a buyer of reserved housing units?
- Shall be at least the age of majority;
- Shall 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;
- Shall not have a spouse or dependent child who has 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;
- Shall be the owner or lessee and occupant of a reserved housing unit; and
- Shall not have a record or history of conduct or behavior, including past rent payments, which may prove detrimental to other tenants or the authority. This criterion shall be applied within parameters set by federal laws on discrimination, including the Americans with Disabilities Act.
What are the income requirements for reserved housing?
The buyer’s “adjusted household income” may not exceed 140% of the Average Medium income. The “adjusted household income” refers to the total income, before taxes and personal deductions, received by all members of the eligible borrower’s household, including, but not limited to, wages, social security payments, retirement benefits, unemployment benefits, interest and dividend payments, but not including business deductions. In addition, the buyers assets (mutual funds, 401K, etc) may not exceed 135% of the Area Medium Income.
What are the lender requirements?
Lenders will require documentation to verify the buyer’s income. Examples are as follows:
- 2 years tax returns
- Pay stubs
- Verification of assets
- Gift letter with verification of funds (if receiving assistance with down payment)
How are the reserved housing units announced to the public and what area the buyer’s procedures?
There will be a published announcement in Newspaper outlining the following process:
- Application pickup period
- Lender qualification period
- Application submittal period
- Lottery drawing
- Unit selection
What is the regulated term for reserved housing units (i.e.-how long am I required to occupy the unit)?
The original buyer must comply with certain restrictions to sell or transfer the reserved housing unit during the 5-year regulated term. If the original buyer wishes to transfer title to the reserved housing unit during the regulated term, then the HCDA shall have the first option to purchase the unit at a sales price based on the lower of the following two (2) methods of valuation: Method A – Current Fair Market Value Approach: The current fair market value less the Authority’s share of the equity in the reserved housing unit outlined in HAR §15-218-41; or Method B –Calculated Reserved Housing Unit Sales Price Based on Future AMI Approach: As of the time of sale or transfer the reserved housing unit sale price is calculated based on the then current annual median income for urban Honolulu established by the United Stated Department of Housing and Urban Development.
How much is the down payment?
Applicants will need to provide a down payment of 10%.
What is the HCDA
The Hawaii Community Development Authority (HCDA) is a State agency that was established to supplement traditional community renewal methods by promoting and coordinating public and private sector community development.
Where can I learn more about the Reserved Housing 2011 Mauka Area Rules?
The HCDA website has copies of all current rules and can be found at: http://dbedt.hawaii.gov/hcda/plans-rules/