What is Reserved Housing?
The Kakaako district in Honolulu is quickly 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 Kakaako area for buyers earning less than 140% of Honolulu area median income (AMI) as established from time to time by the United States Department of Housing and Urban Development (HUD). The 2018 AMI is $96,000.00 and 140% of that is $134,400 (for a family of four). All buyers will need to go through a qualifying process to ensure they meet the HCDA reserved housing requirements as well as lender requirements. For a single person the max income or 140% of AMI is $94,100. (see below for full chart)
What are the income requirements?
The Buyer’s “adjusted household income” may not exceed 140% of the area median income. For a single person, your income may not exceed $94,100.
The “adjusted household income” refers to the total income, before taxes and personal deductions. This includes anyone living in the primary 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 buyer’s assets (mutual funds, bank accounts) may not exceed 125% of the area median income.
What is shared equity?
The share of the equity in the reserved housing unit shall be the higher of:
An amount equivalent to the difference between the original fair market value of the unit and its original sales contract price, not to exceed the difference between the resale fair market value and the original sales contract price; or
An amount equivalent to the authority’s percentage share of net appreciation calculated as the difference between the original fair market value of the unit and its original sales contract price, divided by the original fair market value of the unit. “Net appreciation” means resale fair market value less original sales contract price and actual sales costs incurred if any.
After the end of the regulated term, the owner may sell the unit or assign the property free from any transfer or price restrictions except for applicable equity sharing requirements set forth in 15-22-187 of the Mauka Rules, Chapter 22 document.
If you want to know more about “EQUITY SHARE”? CONTACT ME!!
- What kind of documents do I need to present to my loan officer?
- Most recent 2 years tax returns
- Most recent W-2’s
- Most recent full 1 month Pay stubs
- Verification of assets
- Gift letter with verification of funds (if receiving assistance with down payment)
Which buildings have reserved housing available?
“Reserved units” or “affordable housing” and provides a great opportunity to get under market prices. This will be announced when each building started a plan and officially approved by HCDA.
Percentage of reserve unit for each different building wouldn’t know until they announced.
What are the buying 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 are the occupancy guidelines?
Your household size will determine what type of unit you are able to purchase. For example, a family of four can purchase a 2 or 3 bedroom home but not a 1-bedroom home. A family of 2 can purchase a studio, 1 or 2-bedroom home. A single person can purchase a studio or 1-bedroom.
Please keep in mind that the reserved housing at Aalii will only have a studio and one-bed units.
How long need to live in the unit?(Owner occupied)
The regulated term for reserved housing units is established based on unit affordability and will range anywhere between2-10 years. It depends on each project. Reserved housing units affordable to qualified persons with adjusted household incomes:
Less than one hundred percent of median income shall be regulated for ten (10) years;
One hundred to one hundred nineteen percent of median income shall be regulated for five (5) years;
One hundred twenty to one hundred forty percent of median income shall be regulated for two (2) years. HCDA may elect to extend the period on a case-by-case basis.
How much is the down payment?
The developer can require up to a 10% down payment. The buyer is allowed to put in a larger down payment if they choose to or if its recommended or required by the lender.
Please contact me if you have more detail question!