After 24 years of helping families buy homes on Oahu, I can tell you the single biggest hurdle for local buyers isn't the monthly payment — it's the down payment. Saving cash while paying Honolulu rent is brutal, and I've watched plenty of well-qualified families put their homeownership dreams on hold for years because of it.

Here's what most people don't know: the City and County of Honolulu will lend qualified buyers up to $40,000 toward a down payment — with zero interest and zero loan fees. It's called the Down Payment Loan Program, and it's run by the City's Department of Community Services (DCS) using federal HOME funds.

This isn't a gimmick. It's a real program, and buyers use it. Let me break down how it works.

How the Program Works

The Down Payment Loan Program provides a second mortgage of up to $40,000 behind your primary home loan. The terms are hard to beat:

  • 0% interest — you repay only what you borrow
  • No loan fees and no application cost
  • 20-year amortization — on the full $40,000, that works out to roughly $167 per month
  • Annual occupancy credits that can effectively forgive a substantial portion of the loan over time (more on this below)

Compare that to borrowing the same $40,000 at today's mortgage rates and you're looking at tens of thousands of dollars in interest saved over the life of the loan.

The Occupancy Credit: Where It Gets Even Better

Here's the part I find most compelling. For each full year you live in the home as your owner-occupant, you earn an occupancy credit equal to 5% of the original loan amount — $2,000 per year on a $40,000 loan. Make your payments and stay in the home for 10 full years, and you receive a matching $20,000 credit. In practical terms, half the loan can be forgiven simply for doing what you were going to do anyway: live in your home.

Who Qualifies?

This program is designed for local working families, so there are eligibility requirements:

  • Income: Your household must earn at or below 80% of the area median income (AMI). As of early 2026, that's approximately $80,600 for a two-person household, $90,650 for three, and $100,700 for a family of four, scaling up with household size. (These limits adjust periodically — always confirm the current figures with DCS.)
  • Your own skin in the game: You must contribute at least 5% of the purchase price from your own funds as a down payment.
  • Owner-occupancy: The home must be your primary residence on Oahu — this isn't for investment property.
  • Homebuyer education: You'll need to complete an approved homeownership course.
  • Home inspection: A professional inspection is required as part of the purchase.

One important note: funds are limited and loans are awarded first-come, first-served. When the fiscal year's allocation runs out, it runs out. If you think you might qualify, the time to start the conversation is before you fall in love with a property, not after.

What This Looks Like in Real Life

Say you're a two-income household earning $95,000 with three people in your ohana, and you've saved $30,000. On your own, that budget keeps you locked out of a lot of the market. Add the City's $40,000 on top of your 5% contribution, and suddenly a $550,000–$600,000 condo or townhome moves from "someday" to "let's write an offer." That's the difference this program makes.

How to Get Started

The process starts with a phone call, not a mountain of paperwork:

  1. Call the DCS Loan Branch at (808) 768-7762 for an initial eligibility review with a City loan officer. There's no cost to inquire.
  2. Get pre-approved with a first mortgage lender who has experience layering city down payment assistance with a primary loan — this matters more than most buyers realize.
  3. Work with an agent who knows the program. Timing, inspections, and lender coordination all have to line up for these deals to close smoothly.

My Take

I've said it for years: homeownership is still the most reliable path to building wealth for local families, and every year you wait on Oahu tends to cost you. If your household income falls under the limits above and you've managed to save 5%, this program is essentially the City handing you an interest-free boost — with half of it potentially forgiven for staying put.

If you're wondering whether you'd qualify, or how this could fit into your home search, reach out. I'm happy to walk you through the numbers, connect you with lenders who work with the program, and help you figure out what's realistic in today's market.

Tony Kawaguchi (Aloha Tony)
The Kawaguchi Group | eXp Realty
(808) 351-9795 | tony@alohatony.com
RB-21841 / RS-66616

Program details, income limits, and funding availability are subject to change. Verify current terms directly with the City and County of Honolulu Department of Community Services before making purchase decisions.