Hawaii FHA Loans – Requirements and Loan Limits for 2024 – Hawaii FHA Lenders
Hawaii home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Hawaii FHA loan. There are many FHA lenders in Hawaii who offer FHA loans, but not all of them participate in all of the FHA loan options available.
FHA loan requirements in Hawaii include a minimum credit score of 500, a down payment as low as 3.5% for scores above 580, proof of steady income, and a debt-to-income ratio up to a maximum 56.9%
We will take you through the Hawaii FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified. If you already know that an FHA loan is right for you, then click to get pre approved whether you live in Honolulu, Maui, the Big Island, or anywhere else.
For company and MLO licensing information go to: www.nmlsconsumeraccess.org (NMLS #1330)
Click to speak with a loan officer or to get pre-approved
Hawaii FHA Loan Benefits
These are the benefits of an FHA loan versus a conventional loan:
- Lower credit scores permitted
- Lower down payment requirement
- FHA interest rates are lower than conventional rates
- Gift funds allowed
- Seller closing cost contributions are allowed
- FHA loans are assumable
- Co-signers allowed
- Higher debt to income ratios permitted
Hawaii FHA Loan Requirements for 2024
These are the basic FHA loan requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, we can help.
- Down payment of 3.5% or 10% if your credit score is below 580
- 2-year employment history with some exceptions allowed
- Fully document your income for the past two years
- Minimum FICO score requirement of 500 – down payment will vary
- Mortgage Insurance Premium (MIP) is required for every FHA loan
- Maximum debt to income ratio of 43% with exceptions up to 56%
- The home must be your primary residence
- No bankruptcies or foreclosures in the past two years
Low Down Payment Requirement
FHA loans typically require a down payment as low as 3.5% of the purchase price. This is often affordable for most home buyers and down payment assistance can also be used if needed.
For credit scores of 580 or higher, the down payment will be 3.5%. For credit scores of 500-579, there will be a down payment of 10%. The down payment for an FHA loan cannot be negotiated because lenders cannot deviate from the FHA requirements.
The down payment can also be a gift from a relative. That gift can cover some or all of the down payment and also the closing costs. Read more about FHA gift funds.
Lenient Credit Requirements
Another standout benefit of FHA loans is their accessibility to borrowers with lower credit scores compared to conventional loans. This means that individuals with less-than-perfect credit history are still eligible for this type of mortgage.
For instance, if someone has faced financial hardships or made mistakes in the past and now has a lower credit score, an FHA loan provides them with an opportunity where other types of loans might not. By evaluating applicants based on a wider range of factors rather than just their credit score, these loans open doors for countless individuals who may otherwise struggle to secure financing for their dream homes.
If you have poor credit, we can still help you to secure a mortgage even if you have denied by other lenders. Contact us here to discuss
Competitive Interest Rates
One prominent advantage offered by FHA loans is the potential for competitive interest rates. This aspect can save homebuyers money over the life of the loan in comparison to other mortgage options.
For instance, let’s say the interest rate on an FHA loan is notably lower than that of a conventional loan. Over time, this seemingly small difference can accumulate into substantial savings, making FHA loans an attractive choice for many individuals looking to purchase a home.
The interest rate offered will largely be tied to your credit score. The higher the credit score, the lower the rate will be. If you also have the ability to put more down, your rate will likely be slightly lower.
Debt-to-Income Ratio
In addition to a strong credit score, borrowers need to meet specific debt-to-income ratio requirements when applying for an FHA loan. This is an assessment used by lenders to compare an individual’s monthly income versus their recurring monthly debts. The goal is to ensure that prospective borrowers can manage mortgage payments in addition to their existing financial obligations.
Let’s look at it like this: Imagine you’re deciding if you can afford to spend money on something new after paying all your bills each month. This ratio gives lenders an idea of how well you can manage taking on a new bill—the mortgage payment—when put against your ongoing expenses. To prove that you’re in good shape, most lenders prefer a debt-to-income ratio below 43% but we can go up to 56.9%. This signals that you have enough income each month to comfortably support your existing debts and the anticipated mortgage payment.
Understanding the eligibility criteria sets us up for exploring how these loans lead to fulfilling homeownership dreams through the purchasing process.
Hawaii FHA Down Payment Assistance
There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Hawaii. Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.
Honolulu Down Payment Assistance Program
These are just two examples of down payment assistance programs in Georgia Another option if you decide to work with us is down payment assistance that is part of the loan package. This lender provided down payment assistance option may or may not be forgivable and also will have a minimum credit score requirement. Contact us for more details.
Hawaii FHA Loan Limits
Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences most counties is $498,257. However, Hawaii is an expensive place to live which means the FHA loan limits are higher. Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.
| County Name | Single Family | 2 Units | 3 Units | 4 Units |
|---|---|---|---|---|
| HAWAII | $517,500 | $662,500 | $800,800 | $995,200 |
| HONOLULU | $779,700 | $998,150 | $1,206,550 | $1,499,450 |
| KALAWAO | $1,000,500 | $1,280,850 | $1,548,250 | $1,924,100 |
| KAUAI | $1,029,250 | $1,317,650 | $1,592,700 | $1,979,350 |
| MAUI | $1,000,500 | $1,280,850 | $1,548,250 | $1,924,100 |
FHA 203k Loans in Hawaii
FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.
If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.
FHA Streamline Refinance in Hawaii
The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.
For more information, please read our article on the FHA streamline refinance.
Hawaii FHA Loan Pre-Approval Process
If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved.
- The first step is to make sure you have the minimum down payment needed to qualify
- check your credit and try to cleanup anything that is pulling down your scores
- Get a copy of your tax returns for the past two years
- Get copies of your pay stubs for the past month
- Get copies of your last two months’ bank statements
- Speak to an FHA lender about your loan scenario
Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.
What to Look for in an FHA Lender
We are serious about offering a full range of FHA product options to help as many home buyers as possible. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.
Consumers have many options to choose from when deciding which lender to use when applying for an FHA loan. However, we would love to be your choice and here are a few reasons for you to consider.
Although virtually every lender offers FHA loans, not all lenders offer the full program portfolio. For example, the FHA 203k rehabilitation loan is a great program which allows you to purchase and rehabilitate a home with all of the costs included in the mortgage. Not all lenders offer, or are experienced in working with that program.
Next, FHA guidelines permit recent bankruptcies but an experienced lender can find ways to secure an exception so you can get approved.
A good FHA lender will:
- Allow for credit scores as low as 500
- Provide FHA 203k loans
- Offer competitive rates and fees
- Have a great processing and underwriting team
- Work closely with you throughout the loan process
- Communicate well and will provide you with updates along the way
This is where we stand out and feel confident we can help you to qualify for an FHA loan.
Hawaii FHA Loan Calculator
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What is the minimum credit score needed for an FHA loan in Hawaii?
The lowest credit score for an FHA loan in Hawaii is 500.
How much down payment is required for an FHA loan in Hawaii?
The lowest down payment possible for an FHA loan is 3.5%. However, if the credit scores are below 580, the down payment increases to 10%.
What are the maximum loan limits for FHA loans in different areas of Hawaii?
The maximum loan limits vary by county with Kauai leading with the highest FHA loan limit in Hawaii.
What types of properties are eligible for FHA loans in Hawaii?
Eligible properties for an FHA loan in Hawaii are single family homes, 2-4 unit, condos, townhomes, mobile homes and mixed use properties if more than 50% of the square footage is residential.
Can I use an FHA loan to buy a vacation home or investment property in Hawaii?
FHA loans are only for primary residences and cannot be used to purchase a vacation or investment property.
What are the closing costs associated with FHA loans in Hawaii?
You can expect the closing costs for an FHA loan to be anywhere from 2-5% of the loan amount depending upon the purchase price. Some of the costs are fixed which means the higher the purchase price, the lower the closing costs will be as a percentage of that price.
How does the FHA appraisal process work in Hawaii?
The appraisal for an FHA loan is also an inspection. You are getting the estimated value and determining whether any repairs are needed before the purchase date. The appraisal is paid by the borrower before it occurs, but after you are conditionally approved for the mortgage.
What is the process for applying for an FHA loan in Hawaii?
The first step is to speak with a loan officer experienced in originating FHA loans. Then, you will need to complete the loan application and provide all of the required documentation.
Are there any specific requirements for first-time homebuyers using an FHA loan in Hawaii?
There are no specific requirements for first time home buyers who plan to use an FHA insured loan to purchase a home. The FHA loan requirements are the same regardless if you are a first time home buyer.
How long does it take to get approved for an FHA loan in Hawaii?
If you complete the loan application quickly, you can get pre approved the same day, or conditionally approved in a few days.
Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.
Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.
Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.
Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.
Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.
We have FHA lenders who can help with your FHA loan in these states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming