Vertical construction has started for 60 homes within the Villages of La‘i ‘Opua in Kailua-Kona.
The rent-with-option-to-purchase homes, a portion of the greater 118-unit La‘i ‘Opua Village 4 – Akau, are anticipated to be offered to Department of Hawaiian Home Lands beneficiaries in mid-2021, the department said Tuesday. An additional 103 units will be built subsequently to complete Village 4 – Akau and Village 5.
Financing for the project will use, in part, federal and state low-income housing tax credit equity secured by Hunt Capital Partners, in collaboration with Ikaika Ohana and Urban Housing Communities. The project will ultimately provide affordable single-family rental homes for DHHL undivided interest and waiting list applicants who can convert their rental into a 99-year homestead lease after 15 years.
DHHL’s rent-with-option-to-purchase project targets qualifying families who earn up to 30%, 40% and 60% of the area median income, or AMI. The program differs from a rent-to-own program in that rent does not contribute to the purchase of the home. Instead, the tenant’s AMI level at the initial qualification to occupy the units will be the same AMI level used in determining the sale price at the end of the 15 years.
“A rent-with-option-to-purchase product provides a unique way for beneficiaries to become homeowners with an entry point through an affordable rental,” said Hawaiian Homes Commission Chairman William J. Aila Jr. “This portion of the Villages of La‘i ‘Opua marks the beginning of several lot initiatives on Hawaii Island. We also anticipate the offering of vacant lots in Discovery Harbor and the groundbreaking of our Subsistence Agricultural pilot projects in Honomu and Panaewa in 2021.”
Rental tenants will have the first option to purchase their units after the federal and state tax credit 15-year rental compliance period ends. La‘i ‘Opua UI lessees who meet the household income requirements and other selection criteria will have the first selection opportunity since they currently hold a lease for the Village of La‘i ‘Opua subdivision.
If rental units are available after the UI’s selection, applicants on DHHL’s Hawaii Island Residential Waiting List will be invited to select a rental unit based on their application date.
Coastal Construction Co. is acting as the project’s general contractor with architect firm Design Partner Inc. ThirtyOne50 Management will function as the rental property manager, the department said.
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