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Get Matched Free →City and County of Honolulu Down Payment Loan Program
By Tyler Thompson · Licensed Real Estate Agent · Updated October 24, 2026
About the City and County of Honolulu Down Payment Loan Program
The City and County of Honolulu Down Payment Loan Program lends income-qualified Oahu buyers up to $40,000 toward a home purchase. The Department of Community Services runs it through its Rehabilitation Loan Branch, using federal HOME Investment Partnerships funds from HUD. The loan carries 0% interest and no loan fees, and the Community Assistance Division describes it as a second mortgage with a 20-year fixed payment term.
Buyers must not own a primary residence, and household income must fall under the brochure's limits revised in July 2026: $86,250 for one person, $98,600 for two, $110,900 for three, $123,200 for four, $133,100 for five and $142,950 for six, rising to $182,336 for ten. The city warns that these limits change periodically. Every applicant must complete a City-approved homeowner education course before the loan is approved. The home must be a legally permitted structure anywhere in the City and County of Honolulu and pass a City inspection. Federal rules add a lead-based paint review for homes built before 1978 and an environmental review on every purchase, which can add time to an Oahu escrow. Funds go out first come, first served, subject to availability.
Unlike most down payment loans, this one is repaid monthly: $40,000 over 20 years at 0% is $166.67 a month, counted in the buyer's debt ratio. The owner must live in the home for the life of the loan, and a sale or transfer makes the balance due based on annual occupancy credit. HHFDC's Hale Kamaaina first mortgage is a separate state rate program.
How much assistance
Eligibility
- Income limits: $86,250 (1 person) to $182,336 (10 people), subject to periodic revision.
- First-time buyer required: No
- Geographic restrictions: City and County of Honolulu (Oahu). Home must be legally permitted and pass City inspection; pre-1978 homes need lead-based paint review.
- Homebuyer education required: Yes
How to Apply for City and County of Honolulu Down Payment Loan Program
Step 1: Check the July 2026 income chart
Compare your total household income with the City's chart, revised July 2026: $110,900 for three people, $123,200 for four and $133,100 for five. Confirm that no one buying owns a primary residence. The brochure at honolulu.gov/dcs lists all ten household sizes, and the City notes that the limits are revised from time to time, so check the date on the version you use.
Step 2: Book a City-approved homeowner education course
The City requires every applicant to finish a homeowner education course it approves before the loan can be approved. Ask the Rehabilitation Loan Branch at (808) 768-7076 which providers are on its current list, since a certificate from an unapproved class may not count. Complete the course early, because a missing certificate stalls the file after you are already in escrow.
Step 3: Tell your first mortgage lender up front
When you apply for your first mortgage, tell the loan officer you want a City down payment loan. The lender must plan for a second lien and add the $166.67 monthly payment on a $40,000 loan to your debt ratio. Give the lender the City's phone number, (808) 768-7076, so it can request the checklist directly.
Step 4: Have the lender confirm funds are available
Before you rely on the money, your lender must contact the City to check that funds remain and obtain the loan submission checklist. Loans are made first come, first served, subject to the availability of funds, and the City does not publish a remaining balance. Ask the lender to repeat the check before you remove contingencies on a purchase contract.
Step 5: Choose a home that passes City inspection
The property must be a legally permitted structure that passes a City inspection. Homes built before 1978 need a lead-based paint review, and every purchase needs a federal environmental review. Unpermitted additions or ohana units can block approval. Build these reviews into your escrow timeline and ask your agent to request permit records from the seller early.
Step 6: Submit the file and close on Oahu
Your lender sends the completed file to the City for an eligibility determination. After approval, the City loan closes with your first mortgage as a 0% second with no fees. Payments of $166.67 a month begin on the 20-year schedule. Visit the branch at 51 Merchant Street, 1st Floor, Honolulu 96813, or call (808) 768-7076 with questions.
Real Cost Example
On a $500,000 Honolulu condominium, a family of four earning under $123,200 could pair the City's $40,000 loan with $10,000 of savings for a 10% down payment of $50,000. That leaves a $450,000 first mortgage. At HHFDC's posted 6.92% conventional rate, principal and interest run about $2,970 a month, plus the City's $166.67.
Estimated closing costs at 2% to 3% of the price, the range our Honolulu figures use, come to $10,000 to $15,000 on this condo. Adding the $10,000 down payment share, the family needs roughly $20,000 to $25,000 in cash, before HOA transfer fees and prepaid escrow.
The City loan costs nothing extra over its life: 240 payments of $166.67 repay exactly $40,000. A buyer who instead uses FHA at 3.5% down needs $17,500, so the City money can lower the first mortgage, shrink mortgage insurance, and cover closing costs, as long as the lender and City approve the structure.
Combining With Other Programs
The City loan is a second mortgage that sits behind a first loan such as FHA, VA, Fannie Mae's HomeReady or Freddie Mac's Home Possible. HHFDC's Hale Kamaaina program offers a below-market first mortgage for first-time buyers in Hawaii, with a Honolulu income limit of $154,805 for one or two people as of June 13, 2026. Ask both agencies whether a City second can follow a Hale Kamaaina first.
The City makes the eligibility determination on the full loan file your lender submits, so every other source of help must appear in it. The loan must be repaid monthly, so it adds $166.67 to the debt ratio, which can limit how much other debt a buyer carries. Call the Rehabilitation Loan Branch at (808) 768-7076 before adding another assistance source.
Other ways to cut cash to close: negotiate seller credits within the first loan's limits, use eligible gift funds from family, and choose a condo or townhome with lower HOA dues so the full payment, including the $166.67, fits your lender's debt-ratio limit. Paying down a car loan before applying can free the same room.
Pros and Cons
The biggest advantage is size and cost: $40,000 at 0% interest with no loan fees, which equals 8% of a $500,000 condo price. Over 20 years the buyer repays exactly what was borrowed, so the program costs no interest at all. It is not limited to first-time buyers in the usual three-year sense, only to people who do not own a primary residence. The income limits reach $123,200 for a family of four and $182,336 for a household of ten, so larger Oahu families can qualify.
The biggest limitation is the monthly payment: $166.67 for 20 years, which counts against the debt ratio when Oahu prices already stretch budgets. Funds are first come, first served with no published balance, and federal inspection, lead paint and environmental reviews add steps, and a home with unpermitted work cannot qualify. The owner must occupy the home for the life of the loan. Buyers who do not qualify can compare HHFDC's Hale Kamaaina mortgage, FHA loans, or VA loans.
Frequently Asked Questions
How much is the City and County of Honolulu down payment loan?+−
What are the income limits for Honolulu's down payment loan in 2026?+−
Do I have to make monthly payments on the Honolulu down payment loan?+−
Can I use the Honolulu down payment loan on an older home or condo?+−
How do I apply for the City and County of Honolulu down payment loan?+−
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Last verified October 24, 2026.