If you own a condo anywhere in Hawaii, or you're thinking about buying one, there's a new state program worth knowing about. The Hawai'i Green Infrastructure Authority officially launched its Condominium Association Loan Program this spring, and the finalized program guide came out just last month. It's aimed squarely at the problem that's been squeezing condo owners on every island for the past two years: buildings that can't get affordable hurricane insurance, and the deferred maintenance that got them there.
Why Condo Insurance Got So Hard to Find
Hawaii's condo insurance market has been unstable since 2023, and it hasn't fully recovered. Insurers pulled back from older buildings, hurricane coverage got harder to secure at any price, and premiums for many AOAOs doubled or tripled. Boards responded the only way they could: raising monthly fees or hitting owners with special assessments, sometimes running into the tens of thousands of dollars per unit. Aging fire safety systems, old plumbing, and worn roofs made things worse, since insurers increasingly tie coverage, and pricing, to a building's physical condition, not just its location.
What the New Loan Program Actually Does
The state's response started with Act 296, signed into law in 2025, which reactivated the Hawai'i Hurricane Relief Fund and directed the Green Infrastructure Authority to build financing tools for condo associations. That authority's Condominium Association Loan Program is now live statewide. It offers direct loans and credit enhancements to AOAOs that have already been turned down by a traditional bank, specifically for fire sprinkler upgrades, pipe repair or replacement, roof work, and other repairs that reduce a building's risk profile. A companion loan-loss reserve program helps community development financial institutions extend financing to associations on more workable terms. To qualify, a board needs at least one adverse action letter from a lender, and it has to commit to restoring full replacement-value hurricane and property insurance once the repairs are done. New commitments are available through June 30, 2027, funded by a $20 million pool, first-come, first-served.
Why This Matters for Financing and Resale
This isn't just an AOAO problem. According to Raelene Tenno of the Hawai'i Council of Community Associations, mortgage lenders require condos to carry insurance at 100% replacement value, and if a board has scaled back coverage to control costs, lenders simply won't lend on units in that building. That affects owners trying to refinance, buyers trying to get approved, and sellers trying to close. A building stuck in a cycle of underinsurance and deferred maintenance can become difficult to finance at all, which drags down resale values for every owner in it, not just the ones on the board making the decisions.
What Owners, Buyers, and Sellers Should Do Now
If you sit on an AOAO board or serve on a budget committee, it's worth asking management whether the association has looked into this program, especially if you've already been turned down by a bank for a repair loan. If you're buying a condo anywhere in the islands, ask for the master insurance policy and confirm it reflects full replacement value before you're deep into escrow, since a shortfall there can derail financing late in the process. If you're selling, get ahead of it: buyers and their lenders are asking harder questions about building insurance than they were two years ago, and a board that can show a repair and insurance plan is a real selling point.
The condo insurance crunch isn't solved, and this program won't fix every building overnight. But it's a real financing tool that didn't exist a year ago, and it's worth a conversation with your board, your lender, or your agent before your next assessment notice or escrow deadline. If you want help sorting through what a specific building's insurance and reserve situation means for your purchase or sale, reach out and I'll walk you through it.