Housing affordability on Kauai slipping away

There are many factors at play making it difficult for many Kauaians to obtain the American Dream of homeownership. With the median household income of $62,052, according to the U.S. Census Bureau, housing affordability is slipping away. Kauai’s population is currently around 69,000 and about half of that population will earn less than the median household income of $62,052 a year. Almost half of Kauai’s kamaaina will not be able to afford to purchase a home. With Kauai’s median home price range hovering around $525,000, many residents are priced out of the market.

Kauai’s lack of housing inventory is a leading factor to the deteriorating affordable housing supply. According to the Hawaii Information Service, there are currently 19 homes on the market under $400,000. Doesn’t sound too bad? Let’s take a closer look.

According to John DiSpirito, the branch manager from First Cal Mortgage in Kapaa, a family with the median household income would qualify for a home between $375,000 and $400,000 and that’s if they have no other car loans or revolving monthly debt. With a conventional financing loan, the down payment money would be around $40,000. Those who do not have the $40,000 down payment funds would need to turn to other financing such as USDA of FHA loans. These programs offer a lesser down payment but have stricter lender guidelines. USDA can do 100 percent financing but they will not finance on properties that have any cracked or chipped lead-based paint. Any home built on or before 1978 is considered a home that has lead-based paint. Eight of the 19 homes that are currently on the market are built in 1978 or older.

FHA has low down payment loans but they require mortgage insurance, which makes monthly payments higher and they are also strict on their guidelines when it comes to proper permitting and nonconforming uses, thereby further eliminating potential homes that qualify.

We need more affordable home projects on Kauai that give preference to first-time owner occupants. Hawaii and California are the most expensive places to own a home in the country. Hawaii is always going to be expensive because the demand is almost always greater than the supply.

The need for affordable housing on Kauai is critical. Programs like Kauai’s Habitat for Humanity are helping but are not enough.

According to Stephen Spears, director of Kauai’s Habitat for Humanity, there were 2,000 people on the wait list, of which 30 were opened to the public last spring. He estimates that of all his applications received, about 50 percent are qualified for the program.

If you are a Kauai resident and don’t want to let the dream of home ownership slip away, there are options for you.

The Hawaii Home Ownership Center offers down payment assistance as well as affordable loan programs. They will be offering classes on Kauai April 17 (part 1) and April 18 (part 2) at the county building. To find out more information visit www.hihomeownership.org.

The County of Kauai Section 8 program offers a homebuyer Loan Program, American Dream Downpayment Assistance Program and Section 8 Homeownership. Info: Bryson Moritsugu, coordinator, (808) 241-4440.

Info on Kauai Self-Helf Housing Corp: Remy at (808) 246-9002.

Kimberly Estrella is a Realtor for Prudential All Star Realty in Kapaa.

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