Financing a Hawaii Home During a Military Assignment

Real Estate Financing Programs

Have you been given the dream military assignment of Hawaii? Living in paradise while serving our country definitely has its benefits – including the possibility of buying a Hawaii home.

Why buy in Hawaii during a military assignment?

There are two great reasons to buy a home while you are stationed in Hawaii.

Hawaii houses could appreciate thousands of dollars during your assignment

Many stories exist about military families moving to the islands for a few years and then leaving with thousands of dollars in appreciation. While the Hawaii housing marketing is one of the most expensive in the country, long-term home values have always positively appreciated over the past decades. In fact, Hawaii real estate historically has risen between 3 to 15 percent per year.

Imagine buying a house in Aiea for $900,000, and then reselling it 3 years later for over $1,000,000 – roughly, an annual appreciation rate of 4 percent. That is possible in the Hawaii housing market.

Homes for sale in Aiea for around $900k

OPEN: 05/26, 3pm - 5pm
Step into luxury island living at 98-501 Koauka Loop #A207 in Aiea. This fully renovated 2-bedroom, 2-bathroom condo boasts brand-new luxury vinyl flooring, brand new appliances, and stunning quartz countertops. The new kitchen and bathrooms exude modern elegance, creating a space that is absolutely immaculate. Enjoy the comfort of everything being brand spanking new, from the flooring to the appliances. Step onto the private lanai and take in the serene views of the surrounding greenery, creating a tranquil outdoor space to unwind and relax. The Park at Pearlridge has ample amenities for the entire family to enjoy, such as; putt putt golf, BBQ area, a pool and more. Conveniently located near shopping and dining, this home provides easy access to major roadways for seamless island living. Schedule a showing today and make this your next home sweet home! Open House Saturday 5/25/24, from 3-5pm and Sunday 5/26/24, from 3-5pm.
Condo in park at pearlridge
$599,000 | 2 bd, 2 ba | 1,067 sqft
Save this listing
OPEN: 05/26, 2pm - 5pm
Welcome home to this tastefully renovated 4-bedroom, 2- bath single family home. This beautifully updated property features a modern kitchen with stainless steel appliances, spacious living areas that allow for multi-generational living, and stylish finishes throughout. The home boasts a large backyard, perfect for family gatherings and outdoor enjoyment. Located in a desirable neighborhood, close to schools, parks, and Pearlridge. Move-in ready and perfect for families seeking comfort and convenience! Don't miss this opportunity!
Home in pearlridge
$1,198,888 | 4 bd, 2 ba | 1,384 sqft
Save this listing
OPEN: 05/26, 2pm - 5pm
This well-maintained, move-in-ready, corner unit with 2 bedrooms and 1 bath, comes with TWO parking stalls!  A rare find in this area!  Upgrades include a beautifully renovated kitchen, bathroom with dual vanities, luxury vinyl plank flooring, and new windows!  Enjoy breathtaking views of the sunset, ocean, city, Pearl Harbor, Diamond Head, and Aloha Friday Night firework shows right from your balcony on the 26th floor!   The unit faces south which brings in natural sunlight to brighten the entire unit throughout the day. Centrally located above Pearlridge Mall, Pearl 2 is a pet friendly complex with amenities galore. Pool, tennis courts, club house, dog park, and security to name a few.  Don't miss this opportunity to own a piece of paradise with breathtaking views in every direction!
Condo in pearl 2
$530,000 | 2 bd, 1 ba | 838 sqft
Save this listing

A Veterans Administration (VA) Loan makes buying a home an attractive option

The VA Loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs. It was created in 1944 and is an attractive loan option for many reasons:

In Hawaii, you can use the VA loan to buy many types of homes (which must meet minimum property requirements):

These types of homes can be purchased with zero down for a mortgage of up to $970,800. And if you need a mortgage above that limit, you simply need to put 25 percent down on the exceeding amount. For example, if your Hawaii dream home is $1,000,000, you would need to make a down payment of $68,368.75 (($1,000,000-$726,525) x 0.25).

The following military members are eligible for a VA loan:

If you are eligible, you will need to obtain a Certificate of Eligibility (COE) through any of these avenues: a VA approved lender, online through the VA’s eBenefits portal, by mail with a VA Form 26-1880. To apply, you will need basic information and you might also need other documentation, like a copy of your DD214 to prove military service.

Before or after receiving your COE, it is recommended to choose a VA lender that is based in Hawaii. There are a number of local Hawaii lenders who offer competitive rates and often have better service and results than a mainland lender. A VA lender will make the mortgage process much easier, especially in the unique Hawaii housing market. When shopping for a local VA mortgage lender, here are some questions to ask:

Once you are eligible for a VA loan and have found a reputable local lender, the Hawaii house hunt can commence.

The Basic Allowance for Housing BAH in Hawaii is high enough to cover a significant portion of your mortgage payments

Don’t go into sticker shock when viewing the high prices of Hawaii homes. Active duty military members stationed in Hawaii receive a significant BAH, which differs according to rank. If you were a married E09 living on an Oahu (Honolulu County) base, you would receive $3,633 as your BAH in Hawaii in addition to a Cost of Living Adjustment (COLA). Instead of using the BAH to pay rent, you could use it to pay mortgage payments – which is made even easier with a VA loan with nothing down.

How much is BAH in Hawaii? If you are stationed on Oahu in Honolulu County, the following is the non-taxable 2020 BAH in Hawaii according to rank, which began January 1, 2022:

With Dependents
No Dependents

Using your BAH to buy a home can make a lot of fiscal sense. A $800,000 home in Ewa Beach with a 0% down payment on a VA loan and an interest rate of 4.75% might have around a $4,500 monthly payment, including property taxes and a $50 association fee. If you are married and an E8, your BAH in Hawaii would cover over 75% of your mortgage, making most of your money go into the value of the home instead of rent.

The Specially Adapted Housing (SAH) Grant offers an additional home financing option to certain military members and veterans

The Veterans Administration grants service members and veterans with certain service-connected disabilities funds to help purchase or build an adapted home or modify an existing home.

SAH grants can be used in the following ways:

The maximum dollar amount for fiscal year 2022 is $101,754 for a SAH grant, so view the details and application process if you have a service-related disability that might benefit from having a specially adapted home.

Buying a home during a military assignment often makes sense financially and allows you to experience Hawaii outside the military installation

Buying a home in Hawaii is not only often a wise move financially, but it also offers an escape from the look-alike houses on base. Enjoy the unique Hawaii architecture, the welcoming neighborhoods, and the plentiful activities in paradise while living in a Hawaii home.