Whether you are retiring from a life of service or are in need of a vacation home, there is a strong military community throughout Paradise. Understanding how a VA loan in Hawaii works is essential for anyone who is looking to call the islands home. But unlike other loans, using a VA home loan in Hawaii can feel intimidating. There are certain parameters and guidelines Veterans often have questions about. Answering some of the more common questions Veterans may have, here’s your ultimate guide to Hawaii VA loans.

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What Is a VA Loan Limit for Hawaii?

All VA loans in Hawaii come with their own limits. The VA loan limit in Hawaii varies by county; however, as of now, they are the same in all five. No matter if you are purchasing property in Hawaii, Honolulu, Kalawao, Kauai, or Maui counties, the limit is $1,089,300.

Can the MCC Credit Be Used With VA Loans Hawaii?

The Mortgage Credit Certificate (MCC) Program, established by Congress in the 1984 Tax Reform Act, aids low and moderate-income families in obtaining housing assistance.

Administered by the Hawaii Housing Finance and Development Corporation (HHFDC), MCCs reduce federal income tax, enhancing available income for mortgage qualification and aiding in house payments.

Homebuyers meeting income and purchase price limits, along with federal eligibility regulations, can benefit from MCCs. This includes claiming a Federal income tax deduction for annual mortgage interest.

For MCC holders, 20% of annual mortgage interest becomes a direct Federal tax credit, providing a dollar-for-dollar reduction in federal income tax liability. The remaining 80% qualifies as an itemized tax deduction.

The mortgage credit amount is tied to interest payments but cannot exceed annual Federal income tax liability. Unused credits can offset future tax liability for up to three years. MCCs are exclusively available through participating lenders, allowing flexibility in establishing terms like interest rates, loan terms, and other criteria.

However, because VA loans in Hawaii are based on bonds and MCCs cannot be used with qualified Veterans mortgage bonds, they cannot be used at the same time.

Does VA Loan Approve ADU in Hawaii?

Hawaii Veterans looking to use a VA loan for an Accessory Dwelling Unit (ADU) can do so. However, VA loans, condos, and non-condo sites will need to be approved first by the U.S. Department of Veteran Affairs (VA). Keep in mind that ADUs can also include structures such as tiny homes, which will still require permission before using a VA loan in HI.

Use VA Loans in Hawaii to Find Your Dream Home

Purchasing your home with a VA mortgage in Hawaii doesn’t have to be a hassle. Everyone has different budgets, needs, and personal factors, meaning no two purchases are the same. However, no matter what your needs are, the team at RE/MAX Aloha Homes - Phillip Legare is here to help.

Combining his illustrious experience in real estate, as well as his firsthand experience being a Veteran, Phillip Legare understands the needs of Vets unlike any other. Homebuying experiences can be stressful, but Phillip and RE/MAX have the tools and experience to alleviate your stress and help you secure the home you deserve.

Helping the military community build wealth through sound real estate investing is just one way a VA loan in Hawaii can help you close on the property of your dreams. Phillip Legare can help. Contact him today and see how the military community can benefit from VA mortgages in Paradise.

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This article is the result of a paid collaboration with RE/MAX Aloha Homes - Phillip Legare.