1 · Buying or retiring in Hawaii
Your VA loan works the same in Hawaii as anywhere else, with no loan limit
Hawaii prices scare a lot of veterans off before they run the numbers. Here is what the VA home loan benefit actually allows.
- No VA-required down payment with full entitlement. Since January 1, 2020, VA no longer caps the guaranty at county loan limits for veterans with full entitlement. You still have to qualify for the payment.
- No monthly mortgage insurance. The VA guaranty takes the place of PMI.
- Funding fee exemption. Veterans receiving VA disability compensation are generally exempt from the funding fee, which can save thousands at closing.
- It is for a home you will live in. You must certify that you intend to occupy the property as your home. Retiring here, PCS orders, or moving back to the islands all fit.
- Condos need VA approval. Much of Oahu is condos, and the building has to be on VA's approved list. I check that before you write an offer, and if a building is not approved I can show you other financing options.
Sources: Blue Water Navy Vietnam Veterans Act of 2019, Pub. L. 116-23, § 6 (congress.gov). 38 U.S.C. § 3703 and § 3704(c) (uscode.house.gov). 38 U.S.C. § 3729(c), funding fee exemptions. VA Lender's Handbook, M26-7 (benefits.va.gov).
2 · Not sure if now is the time?
Rent vs Own: a free webinar for veterans
Buying is not always the right answer, and I would rather tell you that up front. This webinar is built for veterans who are deciding whether to rent or own in Hawaii.
What we cover
Held monthly on the third Thursday, live on Zoom, as a small group. No sales pitch. You leave with a plan, even if the plan is to keep renting.
- The benefits of both. What renting gives you, what owning gives you, and what each really costs here.
- Your goals, in detail. How long you plan to stay, retirement income, family, and which island and neighborhood you want.
- A plan you can act on. Buy now, buy later, or keep renting, with the steps and numbers for whichever fits.
3 · Already have a VA loan?
VA IRRRL: the three federal tests every streamline refinance must pass
If you already have a VA loan, an Interest Rate Reduction Refinance Loan can lower your rate with less paperwork than a regular refinance. Since 2018, federal law sets clear limits on VA streamline refinances to protect veterans from loan churning. These come from 38 U.S.C. § 3709, added by the Economic Growth, Regulatory Relief, and Consumer Protection Act (Pub. L. 115-174, § 309).
- Seasoning. The later of 210 days after your first payment was due, or 6 consecutive monthly payments made.
- Net tangible benefit. Fixed to fixed: the new rate must be at least 0.50 points lower. Fixed to adjustable: at least 2.00 points lower.
- Fee recoupment. All fees and closing costs must be recouped through the lower payment within 36 months.
Source: 38 U.S.C. § 3709, Refinancing of housing loans (uscode.house.gov). VA Lender's Handbook, M26-7, Chapter 6 (benefits.va.gov).
What makes an IRRRL simpler
- VA does not require an appraisal.
- VA does not require income verification or a new Certificate of Eligibility.
- You do not have to live in the home now. You must certify that you lived there before.
- The funding fee is 0.5 percent, and most veterans receiving disability compensation are exempt.
When I will tell you not to do it
If the savings do not clear the 36-month test, or if restarting a 30-year term costs you more over time than you save, I will say so. The math decides, not the commission.
Common questions
Can I use my VA loan to buy in Hawaii with no down payment?
Yes, if you have full entitlement. Since January 1, 2020, VA no longer applies county loan limits to veterans with full entitlement, so there is no VA-required down payment at any price, as long as you qualify for the payment. (Pub. L. 116-23, § 6; 38 U.S.C. 3703)
Should I rent or buy when I retire or PCS to Hawaii?
It depends on how long you plan to stay, your income in retirement, and the property you want. That is what the free Rent vs Own webinar walks through, and sometimes the right plan is to keep renting for now.
How soon can I do a VA IRRRL after buying?
Federal law requires the later of 210 days after the first payment due date on your current VA loan, or 6 consecutive monthly payments made. (38 U.S.C. 3709(c))
How much does my rate need to drop?
For a fixed-rate to fixed-rate IRRRL, the new rate must be at least 0.50 percentage points lower. Moving from a fixed rate to an adjustable rate requires at least 2.00 points lower. (38 U.S.C. 3709(b))
What is the 36-month recoupment rule?
The fees and closing costs of the refinance must be paid back through your lower monthly payment within 36 months. If they are not, the VA will not guarantee the loan. (38 U.S.C. 3709(a))
Is there a funding fee?
The IRRRL funding fee is 0.5 percent of the loan amount. Veterans receiving VA disability compensation are generally exempt. (38 U.S.C. 3729)
Do I need an appraisal or income documents?
VA does not require an appraisal or income verification for an IRRRL. Some lenders add their own requirements, which is one reason I shop several.