Hawaii Mortgage Relief: Programs for Homeowner Stability

Maintaining a home in Hawaii presents unique financial challenges, and for homeowners facing hardship, the stress of potentially losing that home can be overwhelming. The search for a hawaii mortgage relief program often leads to a complex array of options, each with specific eligibility requirements and application windows.

Relief is not a single, one-size-fits-all solution but rather a landscape of targeted financial assistance, disaster recovery initiatives, and procedural safeguards designed to provide stability. Understanding which programs are currently active and for whom they are intended is the first and most critical step toward securing assistance, preventing foreclosure, and finding a path forward.

Active Financial Assistance and Disaster Recovery Programs

For homeowners in immediate need, several programs offer direct financial aid or comprehensive recovery services. These initiatives are typically targeted toward residents of specific counties or those affected by recent disasters, making eligibility a key factor.

For Maui Wildfire Survivors: The Lahaina Homeowner Recovery Program

In the wake of the devastating August 2023 wildfires, the Lahaina Homeowner Recovery Program was established as a primary lifeline for affected homeowners. Administered by Hawaiʻi Community Lending (HCL), this is a comprehensive, three-year program designed to assist up to 500 owner-occupant Lahaina homeowners. Its mission extends beyond immediate aid, focusing on preventing foreclosures and providing the financing to rebuild.

The program's design reflects a deep understanding of the crisis homeowners face after a disaster. The collaboration with major financial institutions—including First Hawaiian Bank, American Savings Bank, Bank of Hawaii, and Central Pacific Bank—is a cornerstone of its strategy. This partnership facilitates a more streamlined process for homeowners to secure forbearance or loan modifications, fostering cooperative solutions.

This approach is essential not only for individual families but also for the economic stability of the entire community. By preventing mass foreclosures, the program helps protect county property tax revenues and the local financial system.

Eligibility and Services

To qualify, an applicant must be a Lahaina homeowner who was living in their home as a primary residence before the fires. The services offered are extensive and tailored to the complex needs of disaster recovery:

• Federal Aid Navigation: Direct assistance with FEMA and Small Business Administration (SBA) loan applications, including help with filing appeals for those initially denied.
• Foreclosure Prevention: Grants and loans aimed at preventing foreclosure, coupled with expert help in negotiating forbearance and modifications with lenders.
• Rebuilding Support: Assistance with obtaining new construction and mortgage financing for rebuilding. This includes guidance on the entire rebuild process and referrals for filing insurance claims.
• No-Cost Property Surveys: An initiative that provides required property surveys at no cost to the homeowner, removing a significant financial barrier to rebuilding.

Application Process

The program began accepting applications in July 2024. The first step for interested homeowners is to complete an interest form to secure a place on the list. HCL has established outreach offices directly in Lahaina to provide in-person support and guidance.

• Official Program Information: https://hawaiicommunitylending.com/mauirelief/
• Interest Form: https://lhrp-interest-form.zapier.app/

For Maui County Residents: Homeowner Assistance Fund (MHAF)

While most statewide COVID-19 relief programs have concluded, a distinct option remains available for residents of Maui County. The Maui County Homeowner Assistance Fund (MHAF) continues to offer substantial aid to homeowners who experienced financial hardship due to the pandemic. Administered by Catholic Charities Hawaiʻi, this program provides a critical safety net.

Program Status and Assistance

The MHAF program is currently accepting applications through a waitlist system, subject to the availability of funds. It is crucial for applicants to understand that registering for the waitlist is the initial step and does not guarantee funding. The program can provide up to $60,000 per household for mortgage payments, property taxes, and other eligible housing expenses.

Eligibility Criteria

To be eligible for the MHAF, applicants must meet several specific requirements:

• Residency: Must be a homeowner in Maui County (including Maui, Lānaʻi, and Molokaʻi) living in their home as a sole residence.
• Financial Hardship: Must have experienced a financial hardship directly related to the COVID-19 pandemic on or after January 21, 2020.
• Income Limits: Household income must be at or below 150% of the County of Maui Area Median Income (AMI).

Application Process

The application is a multi-step process managed by Catholic Charities Hawaiʻi:

1. Register for the Waitlist: The first step is to register online to be placed on the program's waitlist.
2. Complete Prescreening: Applicants will be contacted to complete a prescreening to verify basic eligibility.
3. Submit Full Application: If prescreening is successful, the applicant will be invited to complete the full application and provide all necessary supporting documentation.

Contact Information

For all inquiries regarding the MHAF program, homeowners should contact the administrator directly.

• Service Provider: Catholic Charities Hawaiʻi
• Phone: (808) 873-4673; select option 1, then option 3.
• Website: https://www.catholiccharitieshawaii.org/maui-homeowner-assistance/

Procedural Relief: The Mortgage Foreclosure Dispute Resolution (MFDR) Program

Separate from programs that offer direct financial grants, the State of Hawaii provides a powerful procedural safeguard for certain homeowners. The Mortgage Foreclosure Dispute Resolution (MFDR) Program does not provide funds but instead creates a structured opportunity for homeowners to negotiate with their lenders to find an alternative to foreclosure.

This program is a consumer protection mechanism designed to level the playing field, particularly in nonjudicial foreclosures, which typically proceed with less court oversight. By pausing the foreclosure process, it provides critical time and a formal setting for negotiation that would not otherwise exist.

This protection is not automatic; it is a tool that the homeowner must actively and promptly choose to utilize. Lenders are aware of the program's effectiveness, and some may opt for a judicial foreclosure specifically to bypass this mandatory negotiation. This underscores the importance for homeowners to understand their rights and act quickly.

Eligibility

Participation in the MFDR program is limited to a specific set of circumstances:

• Type of Foreclosure: The program is only available for nonjudicial foreclosures, also known as power of sale foreclosures.
• Occupancy: The homeowner must be an "owner-occupant," meaning the property is their primary residence for at least 200 continuous days before the foreclosure notice is served.

The Process

The MFDR process is initiated by the lender but requires the homeowner's response to proceed:

1. Lender Files Notice: The process begins when the lender files a notice of non-judicial foreclosure with the Department of Commerce and Consumer Affairs (DCCA).
2. DCCA Notifies Homeowner: The DCCA mails a notification to the homeowner, informing them of their right to participate in the MFDR program.
3. Homeowner Opts In: The homeowner has a strict 30-day deadline to submit the MFDR participation form and pay a $300 nonrefundable program fee.
4. Foreclosure is Paused: Once the homeowner opts in, the non-judicial foreclosure process is put on hold.
5. Resolution Session: The DCCA schedules a formal session where the homeowner and lender meet with a neutral third party to negotiate an alternative to foreclosure.

Potential Outcomes

If the parties reach a mutually acceptable agreement during the session, the foreclosure is terminated. If no agreement can be reached, the hold is lifted, and the foreclosure process continues to move forward.

Status of the Broader Hawaii Homeowner Assistance Fund (HAF)

Many Hawaii residents may have heard of the Homeowner Assistance Fund (HAF), a federal program established to help homeowners impacted by the COVID-19 pandemic. In Hawaii, these funds were administered by nonprofit service providers in each county.

With the exception of the Maui County program (MHAF) detailed above, the HAF programs for the state's other counties are closed to new applications. The funds allocated to these programs have been fully exhausted or obligated.

• City and County of Honolulu (Oʻahu): The program administered by the Council for Native Hawaiian Advancement (CNHA) is closed to new applications.
• Hawaiʻi County: The program administered by Hawaiʻi Community Lending (HCL) closed its application portal on May 1, 2024.
• Kauaʻi County: The program administered by Hawaiʻi Community Lending (HCL) also closed its application portal on May 1, 2024.

Specialized Support for Beneficiaries of Hawaiian Home Lands

Beneficiaries of the Department of Hawaiian Home Lands (DHHL) have access to specialized housing support and mortgage relief programs. These programs are funded through federal partnerships, primarily the Native Hawaiian Housing Block Grant (NHHBG) and the Section 184A Native Hawaiian Housing Loan Guarantee program.

These resources are specifically targeted to support low-income Native Hawaiians who are eligible to reside on Hawaiian home lands. DHHL has historically offered direct relief, such as mortgage payment deferrals for those with loans directly through the department.

The DHHL Mortgage Relief Program, administered with partners like the Council for Native Hawaiian Advancement, provides another layer of support.

• Eligible Assistance: The program can cover up to 12 months of mortgage payments, mortgage arrears, utilities, property taxes, and homeowners insurance.
• Eligibility Requirements: Applicants must be DHHL leaseholders, demonstrate a risk of housing instability, and meet income qualifications, typically at or below 80% of the Area Median Income (AMI).

A Crucial First Step: Free Expert Advice from HUD-Approved Housing Counselors

Every homeowner in Hawaii facing financial hardship has access to a powerful, free, and universally beneficial resource: HUD-approved housing counseling. Engaging with a certified housing counselor should be the first step for anyone concerned about their mortgage.

These trained professionals provide confidential, expert advice at no cost and act as a navigator through the complexities of mortgage relief. A counselor can assess a homeowner's complete financial picture, explain options like forbearance and loan modification, create a sustainable budget, and even negotiate directly with a mortgage servicer on the homeowner's behalf.

To find a local agency, homeowners can use HUD's online search tool or call their national, multilingual toll-free hotline at (800) 596-4287. Below are some of the key HUD-approved agencies serving Hawaii.

Summary of Actionable Steps for Hawaii Homeowners

Navigating mortgage hardship requires clear, decisive action. The information available can be overwhelming, but the path forward can be distilled into a simple, structured approach.

1. Assess Your Specific Situation. The most effective relief program is the one that matches your unique circumstances. Determine if you were impacted by the Maui wildfires, have a COVID-related hardship in Maui County, or have received a nonjudicial foreclosure notice.
2. Contact the Relevant Program Immediately. Time is a critical factor. Based on your assessment, reach out directly to the appropriate organization without delay. For Lahaina recovery, contact Hawaiʻi Community Lending. For the Maui HAF program, contact Catholic Charities Hawaiʻi. For the MFDR program, respond to the DCCA notice within the 30-day deadline.
3. Engage a HUD-Approved Housing Counselor Now. This is the single most important action any homeowner facing mortgage difficulties can take. A free, expert housing counselor will provide invaluable guidance, support, and advocacy. Contacting one of the agencies listed above is the best first step toward creating a clear plan for financial recovery.

 Frequently Asked Questions