Hawaii offers a unique housing market, blending stunning landscapes with vibrant communities.
Last Updated June 17th, 2025
For veterans, the state provides specialized programs designed to make homeownership more attainable, from no down payment VA loans to localized housing assistance.
Whether you dream of settling in Honolulu’s bustling cityscape or enjoying Hilo’s laid-back charm, veterans have access to resources that simplify the process. With a mix of rental assistance, affordable housing options, and financial counseling, Hawaii ensures its veteran community can achieve stable and rewarding homeownership.
These programs are tailored to support those who served, creating pathways to a secure future in paradise.
VA loans, offered through a program by the U.S. Department of Veterans Affairs, are designed to assist qualified veterans, active-duty service members, and eligible surviving spouses in achieving homeownership. With VA backing, lenders are able to provide favorable terms, including the option to secure a mortgage without a down payment, making it easier for buyers to conserve their savings.
Another advantage of VA loans is the elimination of private mortgage insurance (PMI), which helps reduce monthly payments. They also come with competitive interest rates and more lenient credit requirements compared to traditional loans. These features make VA loans an accessible and affordable option for purchasing a variety of residential properties, provided the home is used as the borrower’s primary residence.
VA Loan Benefits
VA loans offer distinct advantages, making them an exceptional choice for veterans, active-duty service members, and eligible surviving spouses. Key benefits include:
No Down Payment
A defining feature of VA loans is the ability to purchase a home without a down payment. This benefit has helped countless veterans and service members achieve homeownership without the lengthy process of saving for a large upfront cost.
Unlike conventional loans that often require a down payment starting at 3% or more, VA loans remove this hurdle, enabling buyers to allocate funds toward other priorities, such as investments or savings goals. For military families, this can be a game-changer.
Lower Interest Rates
VA loans consistently offer some of the lowest interest rates in the mortgage market, often outperforming conventional options. Over the past several years, VA loans have maintained this advantage, according to industry data.
Lower rates mean significant savings over the life of the loan, reducing monthly payments and overall costs. This advantage also increases purchasing power, allowing veterans to afford higher-value homes without exceeding their budget.
Flexible Credit Guidelines
VA loans are designed to make homeownership more accessible, especially for those with less-than-perfect credit. Compared to conventional loans, they have more forgiving credit standards, making it easier for many veterans to qualify.
While credit score requirements vary by lender, VA loans often accept scores as low as 620. They also allow for higher debt-to-income (DTI) ratios and provide shorter waiting periods after financial setbacks like bankruptcies or foreclosures.
Limited Closing Costs
VA loans are structured to minimize upfront costs, with restrictions on how much lenders can charge for loan origination and processing fees, meaning lower overall closing costs.
Sellers can pay all the buyer’s loan-related closing costs and contribute up to 4% of the loan amount in concessions. Additionally, VA borrowers are exempt from certain fees, further reducing out-of-pocket expenses.
No Private Mortgage Insurance (PMI)
Unlike conventional loans that require PMI for buyers with less than 20% down, VA loans do not require PMI —even with no down payment.
This saves veterans hundreds of dollars annually and maximizes their purchasing power, allowing them to afford more home within their budget. FHA loans, which require both upfront and monthly mortgage insurance premiums, also lack this advantage.
Lifetime Eligibility
VA loan benefits are available for a lifetime, allowing eligible borrowers to reuse them multiple times as long as entitlement criteria are met.
Whether purchasing a first home, upgrading to a larger property, or buying a vacation home, veterans can rely on VA loans at every stage of life. Even if a prior VA loan default occurred, eligibility can often be restored by repaying the loan or reclaiming entitlement. This ensures long-term access to affordable financing options.
Hawaii Community Development Authority – Reserved Housing Program Provides affordable housing opportunities for veterans and other low- to moderate-income families.
Reserved housing units in urban areas like Kaka’ako
To qualify for a VA loan, applicants must meet the service and eligibility criteria set by the Department of Veterans Affairs.
Veterans: Those who have met the required active-duty service and were discharged under conditions other than dishonorable.
Active-duty service members: Current active-duty personnel are eligible to apply. National Guard and Reserve members: Must have completed six years of service or served a minimum of 90 days of active duty during wartime.
Surviving spouses: Spouses of service members who died in the line of duty or from a service-related injury may qualify for VA loan benefits.
Here are the basic service time requirements:
90 consecutive days of active duty during wartime
181 consecutive days of active duty during peacetime
6 years of service in the National Guard or Reserves, or 90 days of active-duty service under Title 32 orders (with at least 30 consecutive days served)
VA Loan Eligibility Calculator
How to Obtain a Certificate of Eligibility (COE)
Obtaining a VA Certificate of Eligibility (COE) is an essential part of qualifying for a VA loan. This document confirms that you meet the service criteria established by the Department of Veterans Affairs.
How to Apply:
Online: Use the VA’s eBenefits portal for the quickest and most convenient application process.
Through a Lender: Many VA-approved lenders can retrieve your COE electronically on your behalf.
By Mail: Submit VA Form 26-1880 directly to the VA, though this process typically takes more time.
Required Documents:
Veterans: DD Form 214, which outlines your service history and discharge details.
Active-Duty Service Members: A statement of service signed by your commanding officer.
National Guard/Reserve Members: Point statements and proof of service if not activated.
Surviving Spouses: A marriage license and the veteran’s death certificate may be needed to establish eligibility.
Hawaii Housing Market Overview
Hawaii offers a unique real estate market that blends tropical living with urban amenities. While the state’s housing costs are among the highest in the country, VA loans provide significant advantages for veterans, including no down payment, competitive interest rates, and no private mortgage insurance (PMI). Whether you’re looking for a home in Honolulu’s bustling cityscape or a tranquil retreat on Maui, VA loans help make homeownership attainable for eligible service members.
City
Average Home Price
Estimated Monthly VA Loan Payment*
Average Property Tax/Year
Honolulu
$900,000
~$5,400
~$1,800
Hilo
$500,000
~$3,000
~$1,000
Kailua
$1,200,000
~$7,200
~$2,400
Kapolei
$800,000
~$4,800
~$1,600
Kahului
$750,000
~$4,500
~$1,500
Hawaii VA Loan Limit
$1,089,300
Hawaii’s high cost of living translates to higher VA loan limits compared to many other states. Veterans with full entitlement can borrow as much as their lender approves without a down payment. For those with partial entitlement, loan limits vary based on local property values. The elevated loan limits in Hawaii make VA loans especially valuable for veterans seeking homes in this expensive market.
Hawaii Property Tax Exemptions for Disabled Veterans
Hawaii provides property tax exemptions to disabled veterans, offering significant savings on annual taxes. Veterans with a 100% disability rating may qualify for full or partial property tax relief on their primary residence.
This assistance helps reduce long-term housing costs in a state known for its premium real estate prices. Contact your county tax office or the Hawaii Department of Taxation for eligibility and application details.
Disability Rating
Tax Exemption Amount
Details
100% Disability
Full exemption
Veterans with a 100% service-connected disability may qualify for a complete property tax exemption.
70%-99% Disability
Varies by state
Many states offer significant reductions in property taxes for veterans in this range; check state-specific limits.
50%-69% Disability
Partial exemption
Partial tax relief may apply based on local guidelines and state-specific programs.
30%-49% Disability
Partial exemption
Some states offer modest property tax reductions for veterans in this range.
10%-29% Disability
Limited or no relief
Limited programs may be available; benefits vary significantly by state.
Types of VA Loans
VA Purchase Loan VA purchase loans are designed to help veterans buy homes with no down payment and competitive interest rates. These loans are available for single-family homes, condos, and multi-unit properties.
Waives down payment for easier access to homeownership
Offers lower interest rates than conventional loans
Covers a range of properties, from single-family homes to multi-unit residences
Interest Rate Reduction Refinance Loan (IRRRL) Also called the VA Streamline Refinance, this loan allows veterans to refinance existing VA loans to secure lower interest rates or better terms.
Simplifies refinancing with minimal documentation
Reduces monthly payments by lowering interest rates
Enables rolling closing costs into the loan, reducing upfront expenses
Cash-Out Refinance Loan Cash-out refinancing lets veterans access their home equity for major expenses or debt consolidation by refinancing existing mortgages.
Provides access to home equity for significant financial needs
Can refinance VA and non-VA loans alike
Supports goals like renovations or consolidating high-interest debt
Native American Direct Loan (NADL) Native American Direct Loans are available to Native American veterans or their spouses, NADL loans assist in purchasing, building, or improving homes on federal trust land.
No down payment requirement, easing upfront costs
Features reduced closing costs and competitive rates
Exclusively supports housing on federal trust land
Rehabilitation and Renovation Loan A VA-backed rehab loan bundles home improvement costs into a single mortgage, making it easier to finance repairs or upgrades.
Combines renovation costs with the loan for convenience
Ideal for both essential fixes and modernization projects
Helps protect or increase the property’s value
Energy Efficient Mortgage (EEM) VA EEM loans finance eco-friendly home upgrades, such as solar panels or improved insulation, reducing utility costs over time.
Supports sustainable living with long-term cost savings
Can be added to a VA loan or refinance seamlessly
Funds upgrades to lower energy consumption and expenses
Hawaii Housing Programs for Veterans
Hawaii Housing Finance and Development Corporation (HHFDC) Provides affordable housing options and financial assistance for veterans and low-to-moderate income families.
Offers down payment assistance loans for qualifying buyers
Supports first-time homebuyers with educational resources
Habitat for Humanity Hawaii – Veterans Housing Program Partners with veterans to build affordable housing through sweat equity and financial counseling.
Builds affordable homes tailored to veterans’ needs
Provides financial literacy and homeownership education
The VA loan limit in Hawaii is $1,089,300 for veterans with partial entitlement. Veterans with full entitlement can borrow as much as a lender approves without a down payment.
Do VA loans require a down payment? Copied!
No, VA loans typically do not require a down payment, making them a great option for veterans looking to minimize upfront costs.
What credit score is needed for a VA loan? Copied!
While the VA doesn’t set a specific credit score, most lenders prefer a minimum of 620. Some may accept lower scores depending on the borrower’s overall financial profile.
Can VA loans be used for condos in Hawaii? Copied!
Yes, VA loans can finance condos, but the condominium must be VA-approved. Veterans should check with their lender or the VA for eligibility.
Are there property tax exemptions for veterans in Hawaii? Copied!
Yes, Hawaii offers property tax exemptions for disabled veterans. The amount depends on the disability rating and local county regulations.
Can VA loans cover new construction in Hawaii? Copied!
Yes, VA loans can finance new construction, provided the borrower meets the lender’s requirements. Some lenders may require interim construction financing.
Are VA loans better than conventional loans? Copied!
VA loans often feature no down payment, no PMI, and competitive interest rates, making them a preferred choice for eligible borrowers compared to conventional loans.
What documents are required to apply for a VA loan? Copied!
Veterans need a Certificate of Eligibility (COE), proof of income, and credit history. Additional documents may include DD Form 214 or a statement of service for active-duty members.
Can I refinance a VA loan in Hawaii? Copied!
Yes, veterans can refinance using the IRRRL for lower rates or a cash-out refinance to access home equity. Both options offer flexible benefits.
Can VA loans be used for multi-unit properties? Copied!
Yes, VA loans can finance multi-unit properties (up to four units) if the borrower occupies one of the units as their primary residence.
