FHA Loans in Hawai
Living in Hawaii is a dream come true for most of its residents. Great weather, lots of beaches, and amazing scenery are just three great reasons to live in this paradise but, as many Hawaii residents know, paradise doesn't always come cheap. The cost of living in Hawaii is one of the higher ones in the country and often, homeownership can feel more like a dream than a reality. However, with the economy in a downward turn, housing costs are also declining all over the country. Now is a great time to buy a house if you're in a financial position to do so, and a Hawaii FHA loan can help you realize your dream of homeownership.
Benefits of FHA Loans
The Hawaii FHA loan program is administered by the Federal Housing Administration in order to make sure that even those with poor credit, bankruptcy, or not much cash to put down at closing are still afforded the ability to purchase a home. Borrowers can still go through a bank or other lending facility to get their loan, but the advantage is that the loan is guaranteed by the FHA which enables the lender to be much more lenient regarding borrowers credit histories and financial situation.
In contrast with traditional loan programs which often dictate that borrowers provide 20% of the purchase price as a down payment at closing, Hawaii FHA loans only require 3.5% down and closing costs can be rolled into the loan, further reducing the out of pocket cost required at closing.
Hawaii FHA Loan Limits
If you're considering obtaining a Hawaii FHA loan for your new house, check with your lender before you start shopping. In addition to pre-qualifying you for a loan, the lender will let you know what the current FHA limit is for housing in your area.
The maximum loan limit for FHA loans is set each year based on the median cost of housing all over the country (the 2009 baseline limit for a single family dwelling is $271,050) and changes in some high cost of living areas. The adjustments to the minimum based on the local housing market mean that even first time homebuyers in expensive areas can afford to purchase a home with the FHA program. For instance, the limits in Kauai are $773,750 and in Maui, the maximum is $790,000. Check with your lender regarding limits for multi-family dwellings and the specific limits for your area.