Owning a home in Hawaiʻi is a dream for many. In this article, we’ll show you how to make it a reality.

In some ways, buying and selling a home in Hawaiʻi is similar to buying and selling a home on the mainland. Hawaiʻi is, after all, a U.S. state. However, there are a few quirks and nuances in the Hawaiʻi real estate market that you should be aware of. Understanding these differences will help you avoid common pitfalls, navigate the real estate market with ease, and secure the perfect home on Oʻahu, Maui, Big Island, or Kauaʻi.

Securing Financing for Your Hawaiʻi Home

If you’re not in the financial position for an all-cash purchase, you’ll need to sort out your financing before you start looking for homes. That way, you’ll know exactly which homes are in your budget—and which aren’t. Additionally, if you’ve pre-qualified for a mortgage, you’ll arrive at the negotiating table as a more compelling buyer, which is important in a real estate market that’s as competitive as the one you’ll find in Hawaiʻi.

Where loans are concerned, you’ll find similar types available in Hawaiʻi as you would on the mainland, including fixed-rate and adjustable-rate mortgages.

In addition to conventional loans, there are also a few other loan types that Hawaiʻi buyers will want to be aware of:

FHA Loans

Federal Housing Administration (FHA) loans are insured by the federal government and designed to offer access to financing to buyers who might not qualify for conventional loans. Because these loans are backed by the FHA, lenders are able to offer lower down payments, lower closing costs, and easier ways to qualify. However, these loans also have specific requirements and rules, including lending limits.

If you’re interested in learning more, your next step would be to talk to an FHA lender.

VA Loans

Many servicemembers get a taste of Hawaiʻi life when they’re stationed on Oʻahu—and they never want to leave. Both veterans and active servicemembers with more than 90 days of service can qualify for VA loans, which are backed by the U.S. Department of Veterans Affairs. Perks include no down payment, lower interest rates, and no need for private mortgage insurance (PMI).

To confirm your eligibility and secure a certificate of eligibility for your loan, visit the Veterans Affairs website.

USDA Loans

The Section 502 Direct Loan Program, as its officially known, helps low- and very-low-income applicants buy decent, safe, and sanitary housing in eligible rural areas, which include areas of Hawaiʻi. (Check your eligibility using this tool on the USDA website.)

Because these loans are guaranteed by the USDA Rural Development Guaranteed Housing Loan Program, qualified borrowers can secure lower rates, and they may not need to provide a down payment. Like VA loans, USDA loans also don’t require private mortgage insurance (PMI).

Eligibility for USDA loans requires borrowers to meet a specific set of criteria. Learn more on the USDA website.

Jumbo Loans

Depending on the price of your home, you may need what’s called a “jumbo loan.”

First, some background: Fannie Mae and Freddie Mac are government-sponsored enterprises that guarantee most U.S. mortgages. This allows banks to transfer some of the risk associated with their home loans. However, there’s a limit for loans that Fannie Mae and Freddie Mac will guarantee.

For the contiguous 48, the District of Columbia, and Puerto Rico, that number is $726,200 for a one-unit home. In Hawaiʻi, the limit is $1,089,300 for a one-unit home. Any mortgages above that limit would be considered a “jumbo loan” and may be more expensive, since the lender is taking on more risk.

If you anticipate needing a mortgage for a home that lies in jumbo loan territory, be aware that it may cost you more than you expect. (Yet another reason to get your financing in order early, so you can plan for the actual costs!)

Bottom Line: It pays to research all the possibilities to make sure you’re taking advantage of all the options available to you where mortgages are concerned.

While we’re on the topic of money, let’s take a look at the kind of fees and costs that come with owning a slice of Hawaiʻi real estate.

Costs & Fees for Hawaiʻi Real Estate

Owning a house comes with joy, pride—and a few expenses. Below, we’ll highlight some specific to the Hawaiʻi real estate market.

What Is the Hawaiʻi Property Tax Rate?

Property tax rates are set at the county level in Hawaiʻi. Rates currently average from 0.19% to 0.35% of the property’s assessed fair market value. Additionally, many counties offer exemptions for owner-occupied homes, elderly residents, and those with specific conditions.

Considering that you’ll see property taxes over 2.0% in some states (New Jersey and Texas, for example), Hawaiʻi’s property rates may seem low. However, remember that Hawaiʻi’s home values tend toward the higher side, so your property taxes can add up.

For more information on the property tax in each county—including the available exemptions—refer to the following websites:

What About Homeowners’ Insurance?

As with properties on the mainland, you’ll need to factor the cost of homeowners’ insurance into your overall budget. In addition to being a smart move to protect your investment, insurance will likely be required by your lender. (Even if you buy a condo in Hawaiʻi, which would be covered under a condo insurance policy!)

Homeowners Association Fees & Condo Fees

If you’re purchasing in a planned community or within a condo complex, you may also be required to pay a monthly fee to a homeowners’ association (HOA) or condo association. Make sure to incorporate this cost into your monthly budget.

Utility Costs & Solar Power

Hawaii’s electricity rates are among the highest in the nation—about 44 cents per kilowatt hour. Many homeowners in Hawaiʻi take advantage of the islands’ abundant sunshine to run their houses via solar power. Buying a place with an existing solar setup can save you significant money each month.

Additionally, eligible customers can also export energy back to the grid, essentially “selling it back” to the electric company. See the current rates and requirements on the Hawaiian Electric website (Oʻahu, Maui, Big Island, Lānaʻi, and Molokaʻi) or the Kauaʻi Island Utility Cooperative website.

Repairs & Upkeep

Just like any house on the mainland, your Hawaiʻi home will need its share of maintenance. Since everything has to be shipped in, materials cost for upkeep and repairs can be higher in Hawaiʻi, as can the cost of skilled labor.

Additionally, you’ll want to take into account Hawaiʻi’s unique environmental factors: powerful sunshine, strong winds in certain locations, humidity, and sea spray. All of these factors mean that you’ll need to keep a close eye on maintenance to keep your home ship-shape.

Now that we’ve covered the costs, let’s talk about the home types you’ll find in Hawaiʻi.

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Finding the Right Agent

It’s important to choose your Hawaiʻi real estate agent carefully—especially if it’s your first purchase in the Aloha State. The right agent can help you find the perfect spot, and help you steer clear of any pitfalls.

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Hawaiʻi Home Types

In Hawaiʻi, you’ll find fairly typical home types, including condominiums, townhouses, and single-family homes.

You’ll also encounter a few home types and features unique to Hawaiʻi, including:

 

Condotels

A condotel is a condominium in which units are owned individually but the property operates like a hotel. Found mostly in and around Waikīkī, these condo-hotels offer advantages for people who want to spend time in Hawaiʻi at certain times of year without worrying about their property year-round. In most condotels, owners can put their unit into the overall rental pool and see returns on their investment when they’re not using the unit.

Financing for these units can be different, so make sure you work closely with your Hawaiʻi real estate agent and lender closely if this is the kind of home you’re interested in.

Leasehold Properties

Hawaiʻi is one of a handful of states in which you’ll find leasehold arrangements. When you choose a leasehold property, you’re essentially buying something akin to a long-term lease—with some additional benefits and responsibilities.

These properties—mostly found in Honolulu—come with a number of pros and cons. We’ll walk you through them in our article on understanding leasehold properties in Hawaiʻi.

ʻOhanas

In Hawaiian, ʻohana means family. In Hawaiʻi real estate terms, an ʻohana is a second dwelling on a property, one that can be either attached or detached from the main house. You’ll also hear it referred to as an “accessory dwelling.” Some people do use ʻohanas to house family, while others rent them out or reserve them for visitors.

An ʻohana can be an attractive feature. But before you buy a property with an ʻohana, make sure it’s both legal and permitted. (And not just one that the current owner tacked on without adhering to zoning rules!) After all, once you buy a property with an illegal ʻohana, it becomes your illegal ʻohana to deal with. Each county has its own rules, so you’ll want to review them carefully—and discuss with your agent.

The other thing you might see in Hawaiʻi are people who have split off their ʻohana unit to sell it separately under a Condominium Project Regime (CPR). CPRs can offer a more affordable path to homeownership in Hawaiʻi, but they also come with their own unique benefits and challenges. Read more about CPRs on the Department of Commerce and Consumer Affairs website.

Buying vs. Renting in Hawaiʻi

If you’ve never lived in Hawaiʻi, you might consider renting first to check out the Hawaiʻi lifestyle before making a major financial commitment. Every island is different, and you’ll find significant diversity even within each island. For this reason, you might even consider renting in a few different places before making your final selection. For more on the Hawaiʻi rental market, check out our renters’ guide to Hawaiʻi.

Island-by-Island Real Estate Guide

As we shared above, each Hawaiian Island is different from its neighbor. That’s why it’s so important to find a real estate agent who’s familiar with the island you want to live on. For example, if you’re buying on Oʻahu, find an agent on the island, ideally one with experience in the area you’re eyeing. That way, your agent will be well-equipped to give you the inside scoop on the best places to live, the pros and cons of each area, and more.

Oʻahu, the Gathering Place

Real Estate $$$ Ranking
Real Estate $$$ Ranking

#3 out of 4

Top Neighborhoods
Top Neighborhoods

Honolulu, Kakaʻako, Hawaiʻi Kai, Pearl City, Kailua, Kāneʻohe, Mililani, ʻEwa Beach, Kapolei

As the most populated Hawaiian Island, Oʻahu has attracted a lot of residents to its shores. (Just shy of one million!) Living on Oʻahu means being able to take advantage of Honolulu—Hawaiʻi’s “big city”—and all the cultural resources that come with it.

Don’t miss our tips for finding a local moving company on Oʻahu.

Maui, the Valley Isle

Real Estate $$$ Ranking
Real Estate $$$ Ranking

#1 out of 4
(most expensive!)

Top Neighborhoods
Top Neighborhoods

Kahului, Wailuku, Kīhei, Wailea, Mākena, Lahaina, Waiehu, Waiheʻe, Pāʻia, Haʻikū, Pukalani, Kula

Life on Maui is beautiful—and expensive. (The island was recently ranked as the most expensive in terms of real estate!) That said, with plenty of diverse climates that range from hot and sunny to cool and breezy, Maui’s got a little bit of something for everyone.

Make sure to check out our tips for finding a local moving company on Maui.

Hawaiʻi / Big Island, the Orchid Isle

Real Estate $$$ Ranking
Real Estate $$$ Ranking

#4 out of 4
(least expensive!)

Top Neighborhoods
Top Neighborhoods

Kailua-Kona, Hilo, Mountain View, Captain Cook, Waimea, Kahaluʻu-Keauhou, Hāwī

The lowest average real estate prices in the Hawaiian Islands draw many potential residents to the Big Island. It’s also a spot where plenty of people pursue a quiet, off-the-grid lifestyle. With a number of different microclimates, where you live on the Big Island makes a big difference. Choose carefully!

Whether you’re headed for the Kona side or the Hilo side of the Big Island, our local move guides have you covered: Kona & Kohala Moving Guide | Hilo & Hāmākua Moving Guide

Kauaʻi, the Garden Isle

Real Estate $$$ Ranking
Real Estate $$$ Ranking

#2 out of 4

Top Neighborhoods
Top Neighborhoods

Līhuʻe, Kapaʻa, Wailuā, Kekaha, Kīlauea, Hanapēpē, Princeville, Hanalei, Poʻipū, Waimea

Nature is the star on beautiful Kauaʻi, where you’ll find beautiful beaches, lush rainforests, steep cliffs, scenic rivers, and more. If you crave a quieter lifestyle, Kauaʻi might just be the perfect spot for you.

Our Kauaʻi moving guide will show you what you need to know about finding the right assistance for your relocation—and the right neighborhood.

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Not Sure Which Island to Choose?

We’ll show you how to decide which Hawaiian Island is the best island—for you!

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Making Hawaiʻi Your Home

If it’s long been your dream to make your home in Hawaiʻi—or find a more permanent spot in the islands—you’ve now got a good foundation for understanding the Hawaiʻi real estate market. Armed with this knowledge, you’ll be well positioned to find the home of your dreams—and make it your own.

For more information on finding your home in Hawaiʻi, don’t miss our other real estate guides:

Looking for a reliable and affordable moving company? With locations on all four major islands, we’re able to offer mainland moves, interisland moves, and local moves. (We even do international relocations!) Just reach out to one of our experts to get started with a free quote.

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