Who this is for
Common neighbor-island projects
Maui wildfire rebuilds
Owners rebuilding in Lahaina and Kula after the August 2023 fires. Insurance proceeds and land equity can fund much of the project; the loan covers the gap.
New homes on land you own
Your land equity can count toward the down payment.
Land and build together
Buy the lot and finance the build in one transaction with some programs.
ʻOhana units and ADUs
Add a second dwelling where the county allows it. Some lenders count projected rent.
Options
Loan options compared
| Option | Down payment | Notes |
|---|---|---|
| Conventional one-time close | 5–20% | Up to $1,299,500 on Maui and $1,249,125 elsewhere (2026). Second homes allowed. |
| FHA one-time close | 3.5% | Within the county FHA limit. |
| VA construction | 0% | Fewer lenders offer it; I know which do. |
| USDA one-time close | 0% | Eligible rural areas and income limits. |
| Jumbo construction | 10–20%+ | Above conforming limits. |
Hawaii realities
Plan for these before you start
- Permits take time. Budget months, not weeks, for county plan review, and get your rate lock length to match.
- Costs run high. Shipping, labor and materials push Hawaii build costs up, and appraisals can come in under cost. Keep reserves.
- Licensed contractor. Most lenders require a Hawaii-licensed builder with a fixed-price contract.
- Lava zones and flood zones. Insurance availability can decide whether a lot is financeable. Big Island guide →
Common questions
Construction · Neighbor Islands FAQ
Can I use my fire insurance payout?
Yes. Insurance proceeds can fund part of the rebuild, and the loan covers the rest. I coordinate the draw schedule with your insurer’s payments.
How long is the construction period?
Usually 12 to 18 months, with extensions available from some lenders.
Can I build a second home on Maui?
Yes, with a conventional or jumbo construction loan.
Sources: Fannie Mae Selling Guide B5-3.1; HUD Handbook 4000.1; VA Lenders Handbook ch. 7; FHFA 2026 conforming loan limits.
