Kauai Mortgage Partner – John Dispirito Let Kauai Real Estate Group help you finance a home purchase on Kauai.
Sponsoring Lender: One Trust Home Loans
We are a team of local realtors. Our lending partner is local too.
Not surprisingly, many repeat visitors to Kauai decide to invest in real estate on Kauai. Whether it’s an investment property condominium or single family residence, a second home, or your retirement dream home, Kauai has it all. Property values on Kauai have exploded by over 50% in the last 8 years, property taxes are some of the lowest in the nation and retiree’s pension or retirement income are state tax exempt. A winning formula for any home buyers in paradise.
Most Realtors will tell you that the greatest hurdle in obtaining financing on your home purchase are mainland lenders lack of understanding of our unique property definitions. Whether you are buying a single family residence, condominium, commercial building or an undeveloped lot, the property title will invariably be defined as a condominium. This designation wreaks havoc for most lenders once the appraisal is completed since higher down payments or higher interest rates, applicable to condominiums are applied. This is due to Kauai adopting a term called “condominization” that allows the building department to better track subdivided properties under 25 acres, which impacts the majority of properties on the island.
Our local lending sources are well versed in this unique obstacle and can address this issue at inception in order to complete your transaction quickly and efficiently. Same loan products and same pricing that you would see with your mainland lenders.
At Kauai Real Estate Group, we only refer lenders that are “Kauai-centric” who live and work on island. With our small population (less than 68,000 according to the 2016 census) you can be assured that our preferred lenders have the time and energy to complete your transaction quickly and efficiently, in most cases in 30 days or less.
If we can be of any help in referring the right lender for your needs please feel free to reach out to us.
More great info from our lender partner.
There are three condominium classifications that potential buyers must navigate through when deciding on a purchase. Here is a brief overview of these classifications;
- Warrantable Condominiums: Owner occupancy is over 50%, no front desk, no hotel license or affiliation.
- Non-Warrantable Condominiums: Owner occupancy is below 50%, no front desk, no hotel license or affiliation.
- Condotel: Resort style properties with front desk check in, hotel license or affiliation.
In the past, there was no conventional (FNMA, FHLMC) financing on non-warrantable condos, usually due to low occupancy. Non-Warrantable condominium and Condotels were usually relegated to Portfolio or private lenders that charges higher down payments (25% to 40%) and only offered hybrid loan products with a 3, 5 or 7 year fixed period and the remaining term and annual adjustable rates.
FNMA is now allowing for Limited Reviews on primary and second home purchase of non-warrantable condos. Limited Reviews basically touch on a basic condominium questionnaire but does not require the condominium management company to report the current owner occupancy levels. Limited Reviews now open the door for low occupancy condominium projects to offer 30 year fixed rate products at current rates.
Limited Reviews require a minimum of 10% down payment on owner occupied units and 25% down on second home occupied units. This program does not allow for Limited Reviews on investment property unit occupancy