LIHU‘E — Becoming a homeowner has turned into a complicated process over the last few years. However, right now is the time to buy a home, as interest rates are low, Hawaiian Community Assets (HCA) Executive Director Jeff Gilbreath told
LIHU‘E — Becoming a homeowner has turned into a complicated process over the last few years. However, right now is the time to buy a home, as interest rates are low, Hawaiian Community Assets (HCA) Executive Director Jeff Gilbreath told the Kaua‘i County Council on Wednesday.
HCA can “build homeowners” on Kaua‘i, Gilbreath said.
The Hawai‘i Housing Planning Study 2011 presented to the Kaua‘i County Council on Feb. 8 stated that one-third of Kaua‘i’s residents are at risk of future homelessness.
But Gilbreath’s presentation to the council said homeownership was possible.
“Our mission is to build the capacity of low- and moderate-income communities to achieve and sustain economic self-sufficiency,” Gilbreath said.
HCA is one of 1,800 HUD-approved housing counseling agencies nationwide, and the only one in Hawai‘i with offices in all four counties. Gilbreath said his nonprofit essentially provides education to help families become economically sustainable.
Since 2000, HCA has served about 8,000 families statewide, helping 780 to become homeowners.
“The bulk of our work is individualized service,” said Gilbreath, adding that HCA also provides homebuyer and financial education workshops, technical and training assistance, and an array of community lending services, including loan packaging and micro-loans.
About 10 years ago, the county housing departments and private lenders were willing to provide loans to families regardless of financial qualifications, according to Gilbreath. Over the years, buying a home has changed to a “very stringent process.”
Gilbreath gave the example of a family from Ni‘ihau who wanted to buy a home on Kaua‘i. They were told they would need a $10,000 down payment and provided it the following day — in the form of a bundle of bills inside a coffee can, all from sales of Ni‘ihau shell lei. Gilbreath said it took about 12 months to get the family approved, including getting them “banked.”
A typical process of finding housing involves several steps, including the application, a credit report (which lowers the credit score an average five points) and a financial assessment, Gilbreath said.
The housing counseling process, he said, features a credit report review (which does not affect credit scores) and a financial assessment, leading to three possible outcomes: A financial action plan, asset building services or micro-loans. All three outcomes could lead to an affordable housing referral for renters, loan packaging for homebuyers or a loan modification/refinance for homeowners.
Gilbreath said HCA served 632 individuals statewide in 2011, including 86 clients on Kaua‘i.
The average household income of those Kaua‘i households in 2011 was $42,526, and the average household debt was $15,543. The debt allows for a mortgage affordability of $164,743. Without debt, a household with that average income would qualify for a mortgage of $249,747.
The Hawai‘i Housing Planning Study 2011 states the median housing price on Kaua‘i in 2011, obtained from Multiple Listing Services, was $415,000. The HCA report on Wednesday broke down median prices on Kaua‘i as of February in six different locations, and all of them had higher median prices than those presented in the housing study.
According to Gilbreath, as of February, in an area from Ha‘ena to Hanalei the average listing prices ranged from $792,000 to $900,000. In Princeville, they were $1 million and up.
From Moloa‘a through Wailua, they ranged from $540,000 to $648,000. In the Lihu‘e/Hanama‘ulu/Puhi area, they were between $432,000 and $540,000. On the South Shore they ranged from $900,000 to $1.01 million. On the Westside, prices were $432,000 and below.
Those who HCA assisted in 2011 and who qualified for a $250,000 loan still had limited options to purchase a home, Gilbreath said.
Gilbreath said HCA clients who received at least 10 hours of homebuyer education and counseling in 2011 improved their credit scores by at least 32 points, decreased their debt-to-income ratio by 6 percent and increased their savings by $4,905.
Councilman Tim Bynum added some encouraging news for potential new homeowners. One of his family members was recently searching for a home and found a few homes that fall well below the median prices, including a three-bedroom, two-bathroom home listed at $199,000.
HCA works in collaboration with several entities, including the Department of Hawaiian Home Lands, the Council for Native Hawaiian Advancement, the Anahola Hawaiian Homes Association and others.
One of the major recent projects that involved HCA was the Pi‘ilani Mai Ke Kai in Anahola, a project led by the Council for Native Hawaiian Advancement. In six months, 12 single family four-bedroom, two-bath homes were built at a cost of $158,000 each, which resulted in monthly mortgage payments of $841. The average appraised value of those homes was $234,000.
Visit www.hawaiiancommunity.net for more information.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@ thegardenisland.com.
