Is Affordable Housing Really Helpful?
There’s a large following of people who question if affordable housing is actually helpful to first time home buyers. Here are the concerns: - The gap to qualify is tiny. The HCDA and HHFDC have their own respective formulas to determine if you financially qualify for an affordable housing unit. As one of the Kapiolani Residence salesperson told my client, “there isn’t much wiggle room.”
- Shared Appreciate Equity (HHFDC) and Shared Equity (HCDA). Many prospective Buyers fail to realize that the the state is giving them a upfront “discount” on the sales price. For both agencies, the Buyer will have to eventually pay the state back to make up the difference.
- If you purchase a home on the open market, you can sell it the next day. The HCDA and HHFDC will require you to live in the unit for years. If you sell before the designated period, you will be subject to further HCDA or HHFDC regulations.
- Recently, mortgage rates have dropped. However, no one knows where rates will be when these new affordable housing projects are completed. What happens if rates increase over the next few years? Don’t get me wrong, I would be thrilled if my clients were able to secure a unit at Ke Kilohana or Kapiolani Residence. Oahu's real estate market is very competitive and active. With a low inventory, it's difficult for millennial, first time home buyers to enter the market. However, it's also my fiduciary responsibility to present these concerns to my affordable housing clients. As I communicate with each client, he/she often asks if I can show him/her properties listed on the MLS. The anticipated 1-bed price, at Kapiolani residence, is starting at $308,000 with a $428.00/month maintenance fee. Using this as a baseline, here are some comparable active listings…
1650 Piikoi St. #902
$310,000 MLS: 201616277
1069 Spencer Street #101
1201 Wilder Avenue #1702
Regardless of what type of property you purchase, it's pertinent your REALTOR® presents all housing options to you.
Disclaimer: This is a personal blog. Ryan Oda (#RS-75450) is a licensed real estate salesperson with Benn Pacific Group, Inc (#RB-19423). The opinions expressed here represent my own and not those of Benn Pacific Group, Inc., its agents, and or its affiliates. My thoughts and opinions can change over time. This blog is intended to provide a semi-permanent snapshot of a selection of various thoughts and opinions that may not be the same, or even similar, to those I may hold today.
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