 Welcome to the Kondo Insider on Think Tech Hawaii. I'm your host, attorney Nalan. Joining me today is our guest, Mr. Dale Tomei. He is the Hawaii Education Coordinator for the Hawaii Home Ownership Center. Dale graduated from University of Hawaii, majoring in Economics and has been working at Hawaii Home Ownership Center for 18 years. The Hawaii Home Ownership Center is a 503 nonprofit organization that provides homebuyer education and financial coaching, assisting prospective first-time homebuyers to prepare for home ownership. It is also a HUD-approved housing counseling organization. Thank you so much, Dale. Welcome to our show. Thanks, Nalan. Glad to be here. So, I mean, we do have, you know, as, you know, the title of our program, Kondo Insider, we do have, you know, usually Kondo Miniam would be a perfect starter home for any people who are considering about owning their first home and your center's audience or clients must also have quite a portion that are potential Kondo Miniam buyers. So, can you tell us more about your center, its background, mission, office location? Okay, so the Hawaii Home Ownership Center is a nonprofit organization and we provide homebuyer education and financial coaching. So we help families with their preparation towards becoming a homebuyer through money management, understanding credit, learning about mortgages, learning about real estate, the purchase contract, as well as the different types of insurances associated with the home purchase. And you're correct. I would say about 95% of our families, their first purchase will be a Kondo. And it's just because of the prices in Hawaii, everybody needs to start somewhere. And oftentimes it will be a Kondo, even though the dream house is a single family house, they will, you know, sustain home ownership. I think that's a really key in home ownership is being able to sustain home ownership. Because if you're thinking, you're gonna buy something and sell it next year at a profit, you need a crystal ball. I mean, really it's about buying something you can afford and sustaining it. And with our Hawaii market, we're fortunate that the trends had been over the past that eventually prices will start going up and appreciate. So they let the property help them to build that down payment on the upgrade in the future. But yes, definitely most of our families do purchase Kondos. The center is affiliated with NeighborWorks America, which is a national organization charted by Congress. And we're one of many organizations across the country that offers the NeighborWorks curriculum. It is a nine-hour course. It's not scheduled one day and you go nine hours. We break them up into modules. There's four sessions. Typically we do these classes over a month's period. So every month we're offering a new series of that nine-hour course. And the courses are, this is something that we learned from the pandemic was we had to start doing virtual meetings just like we were doing right now. And once we started doing that, the attendees actually prefer attending a webinar session because they can be across from a different island. They could be from the other side of the Oahu attending a course from their home or they could be sitting in their office before they make their commute to go home. So we offer these Zoom webinars covering the nine hours broken up into four sessions. Typically they're scheduled in the evenings, usually about six to eight, 15 in the evening and on four separate evenings. The Homebuyer Education course through again the NeighborWorks curriculum is again nine hours. And that certificate from a HUD approved counseling agency. So after you complete the classes you actually earn a certificate of completion of the again the HUD curriculum. And that certificate is typically a requirement for most assistance programs. And I know for most first-time homebuyers even when I was a first-time homebuyer, I didn't know as a consumer, I didn't know that there were assistance programs that help whether it's down payment assistance, grants, first-time homebuyer programs, mortgage credit certificate programs or sometimes even lenders, specific lenders will offer incentives such as maybe waiving fees if you're a first-time homebuyer. Even on the escrow side, some companies will offer discounts because you are a first-time homebuyer. But as a consumer, my first purchase, I didn't know. It was so overwhelming to begin with, right? You're getting paperwork from the lender, the real estate agent, the escrow officer and you're trying to read everything but it's so overwhelming, especially for the first-time buyer that you read it and it really boils down to, you know what, just tell me where to sign. And this is probably the biggest purchase in your life up until that point. I wish I went to the classes myself. I would have felt much more comfortable about what I was being asked to sign. I would ask better questions from my loan officer, my real estate agent. I would have felt much more in control of my first purchase. So the Hawaii Homeownership Center, again, we are a nonprofit organization that provides this education and counseling. And we've been around since 2003 but it's been quite a while. NeighborWorks America, though, has been around since 1978. So, you know, they've been around a long time. I don't know why it didn't take, you know, it wasn't here in Hawaii much sooner because I would have definitely took the classes and got then, again, more comfortable with what I was going through, especially that first-time. Does your center have the office on Oahu? What about Neighbor Island? Yes, so we do have an office on the big island, on the corner side, but most of our counseling, so you actually bring up a good question. So the reason why it's not just education because in our classes, the information provided is somewhat general, right? You might have 30 families attending. The information in itself is kind of general. Everybody's financial situation will be totally different from one another. And that's where that follow-up counseling, so you'd be working with a financial coach that will apply what we discussed in class, but it'll be specific to that family situation in private confidential meetings. And most of those actually occur in Zoom sessions. So on Oahu, which is our main branch, we're actually in the Hawaii USA Federal Credit Union on Aalash Street. We're actually, there's actually two buildings on the property. We're on the Malka side on the second floor in Suite 201. And on the big island, we do have an office, a small office that we share with Hawaii Community Credit Union. And we actually have a cubicle there and an counselor is there. But most of the counseling sessions actually do occur over Zoom. So how does one get the service from your center? What is the usual intake or how do they sign up for these education classes or sessions? Okay, great question. So I would recommend, so every month we do hold a introductory first time home buyer workshop. It's essentially, we're talking about the buying process. So it's a one hour free webinar. So again, you can attend from wherever you're logging in from and it's gonna be going over the buying process and how the education and financial coaching actually fits into that. That would give you a good overview about the Hawaii Home Ownership Center services and does it make sense for you to go through the program instead of just signing up for something? So that'll give you a good overview. And our next one is actually scheduled on August 24th. That's a Thursday. And it's six to 7 p.m. It's free. You can go to our website, which is www.hihomeownership.org or you can Google Hawaii Home Ownership Center. Go to our homepage, scroll down and it'll save free workshops. Click on that button, choose your date and you can attend. And then we'll also during that workshop talk about how you can actually become a member and register for the home buyer education classes. If you'd like to take a look at our upcoming class sessions we have the schedule listed there as well. So you could just go on the website, click on the upcoming home buyer education schedule. And that'll give you an idea of what times the classes are held, what times of the month it's held. And I think we might have actually recently updated it with the rest of the year schedule. And then we also offer every once in a while free workshops that we just open it up to not only our member families but to anyone that's interested. We have one scheduled for September 12th and that one's the assistance programs review. So what we do in that workshop, now that one's scheduled a little earlier from five to 6 p.m. on the 12th and again it's listed on the website. But that workshop, we review all of the assistance programs that are currently available for first time home buyers. So it'll give you a good idea as far as what programs are currently funded, how do they work, what are the income restriction levels. So it'll give you an idea of again what's available, how to apply for them, what's required. That sounds great because as we all know the market has been gently adjusting downward but then we do have this high interest rate when we try to get financing at this point that really limit people's buying power at this point. And if any help either on the interest rate side or on the down payment side would be super helpful for investors who want to buy their first home. Yes. What about like, I think you're on your website, the center listed that it is affiliated with HHOC mortgage, which is Hawaii's only nonprofit mortgage broker. Can you tell us a little bit more about HHOC mortgage and what kind of services does it offer? Okay, so under the home ownership centers umbrella, there's actually three nonprofits. The first one would be home bar education and financial coaching. That's where I come from. A second nonprofit under the home ownership center more umbrella is HHOC mortgage, which is again, like you mentioned, a nonprofit lender. They actually are a mortgage broker and they introduced two first time home buyer programs. One is a down payment assistance loan program. And that one, the income restriction level goes up to 120% of the area median income. Now some counties like Honolulu County has a down payment assistance loan program, but that one goes only up to 80% of the area median income. So if you're above 80%, you make too much money to qualify for that program. So HHOC mortgage came up with a gap loan program to try and help families that maybe make too much money to qualify for the city and county program, but they may also qualify for this under 120% of the area median income group. And basically they have requirements of 3% down payment from the borrower, where you can borrow 17 up to 22% of the purchase price in a second mortgage. The interest rate on that second mortgage will be lower than typical conventional mortgages. So the interest rate on that will either be equal to the qualifying first mortgage interest rate. So it is a second mortgage or 4.5%, whichever is less. So because interest rates are closer to 7% right now, your second mortgage will be 4.5%. And you can borrow up to 125,000. So that way you could possibly avoid mortgage insurance. And if you're buying a condo, potentially not only avoid mortgage insurance, but also avoid the low-level price adjustment to your interest rate. So typically if you don't have 25% down payment and you're purchasing a condo, there is an add-on to your interest rate of about three quarters of a percent. So being able to come in with 3% down payment of my own money, I can use the second mortgage to avoid mortgage insurance, as well as avoid that add-on to the interest rate. And they also have a closing cost assistance programs. Now that one has three levels of qualification. So there's 80% and below, above 80%, but below 100% of the remaining income. And the third tier is above 100, but less than 120% of the remaining income. The difference between the three is how much reserves you must show and then what the maximum loan amount will be. All three, so the maximum loan amount, if you're 80% and below is up to 15,000. That middle tier above 80, but less than 100, the maximum loan amount is 12,500. And then if you're above 100% of the remaining income, but below 120, the maximum loan amount is 10,000. And this is to help with closing costs. The terms on those loans, zero interest, 15-year amortization, payments deferred. So you can borrow, let's say you borrowed 15,000 to help with closing costs. It's zero interest and you don't make payments on it. If you sell the property before 15 years, that loan, the 15,000, is paid back from the proceeds of the sale. So let's say I buy now, I sell after 14 years, but in that 14-year period, my property has appreciated by 115,000. I sell at year 14 instead of getting a profit of 115,000, I get 100, because I have to pay that 15,000 back. So basically you borrow the money for free. Wow, that sounds very, very helpful. So, I'm sure our audience today, there will be many of them who would want to become a member with your center. So can you tell us if there's gonna be a membership fee? You just mentioned some really good services, including individual sessions tailored to your own financial situation. For those kind of sessions, is there like a service charge for members? Yes, there is a membership fee because we are a membership-driven organization. The membership fee is $60 and it's not per person, it's per home buying unit. So if you're single, it's $60. If you're a family of six, everyone falls under a $60 lifetime membership. Now, I should mention that currently, it's actually a good time to take the homebuyer education classes because currently there's some grants available to offset some of that cost. If you are on the walk-through and working with a Honolulu border realtors member as an agent, there is a $50 grant that you can apply to offset $50 of that $60 lifetime membership. So out of pocket, it's 10 bucks. If you are a HSTA member, Hawaii State Teachers Association member, there is a grant that will cover $30 of the lifetime membership. So $30 out of your pocket instead of $60. And if you're working, this is a new one. So if you're working with American Savings Bank and you basically are working with a loan officer from American Savings Bank, the program is called This Is Home. They will also subsidize your lifetime membership. So basically, they will cover your membership fee. And it's a lifetime membership. So once you are a member, it's a lifetime membership. So whether it's you're ready in six months or it takes 20 years for you to get yourself prepared to become a home ownership or into home ownership. It's a lifetime memory. In fact, we've had families that have been with us since 2004, they've gone on to purchase three times. And again, the first one was probably a condo. Then they moved up to the townhouse and then now they've purchased a single family house, but they've come back. Lifetime membership. So their most work was done with the first purchase. But they come back and talk to their counselor and say, okay, we're thinking about upgrading in a couple of years, anything that we can prepare ourselves for that upgrade purchase. I see. Well, what if someone has some credit issues? Let's say maybe like, you know, with the RIS payment plan or even with, you know, student loans that hasn't been paid off, those kind of issues. Does your center's financial coach will be able to help them? Like how they can plan in advance, you know, work towards the goal of home ownership? Sure, sure. So again, the reality of buying a house, especially in Hawaii, is we don't have to borrow money. So credit plays a critical role in being able to qualify for the mortgage. So not only is it important to manage our money properly if we wanna become potential home buyers in the future, but also staying on top of our credit. And that's why one of the classes that you'd be attending if you take the classes is two hours and 15 minutes only about credit. Now the counselors, again, will work with the family-specific and confidential meetings. So we don't want you to bring up personal information in our classes. Classes are general information. But working with the counselor, they'll help the counsel the individual families within whatever specific situation they're in. So even if it's, you know, I got some errors that are showing up on my credit report, I have this collection and I don't know who this collector is. I've never worked with, you know, the company, they're saying that I owe a collection too. Sometimes it's just errors. The counselor will also work with them to correct them, to write out, you know, those credit bureau letters so we can get them fixed. Cause we want all of that fixed before we apply for the mortgage. We don't wanna apply for the mortgage, get denied because there's something on the credit report and then start fixing it. Let's fix all of that before we apply. Yeah. And I see the center also offers focosure prevention and rental counseling services. Can you share further information about that program? Sure. So the Hawaii Homeownership Center as a Heart-Approved Counseling Agency, oftentimes we'll work with other organizations such as right now the Counsel for Native Hawaiian Advancement CNHA, they actually are working with funds that were awarded to the state from the US Treasury. And it's called the Homeowners Assistance Fund Program. Now those funds were specifically for families that are experiencing hardship due to COVID. So if you got impacted during COVID, especially during its peak where you might've been laid off or maybe multiple people were laid off or maybe you spent a period of time not going to work because you actually got COVID. As long as it's COVID related, I encourage you check out the CNHA's website. Again, Counsel for Native Hawaiian Advancement or you can Google Homeowners Assistance Fund, Hawaii or Hawaii Homeowners Assistance Fund. The state has it on their website where you can go directly to CNHA, apply for it. And if you get approved, there's funding that can bring you current on your mortgage up to 60,000. If you're behind on HOAs, that can be applied. If you are behind in your electrical, your utilities, it can be applied toward that or maybe a combination of all of those can be applied. So again, as long as you can get approval based on COVID and then, yeah, those funds up to 60,000 can help you bring current so that you can get back on your feet because COVID have affected everybody. And it wasn't because people were lazy, they didn't wanna work. If you got laid off or maybe you're working in the tourist industry and the hotels are just so slow that you were furloughed. So there was a time where you weren't working and then your bills were piling up, you fell behind. It's tough. Most of the families that we were seeing that apply for them, they exhausted all of their savings. Some of them were dipping into their retirement. So yeah, so the Hawaii Homeownership Center actually has been contracted with CNHA. And part of receiving those funds if you get approval is a counseling session. So we help CNHA understand what are the circumstances that the family has gone through. What types of arrearages they accumulated that do actually fall under what can be funded through the program. And then we also provide resources moving forward because not only do we wanna become current on all of those issues that we might have fallen behind on, but it's about, okay, once it's current, how do we move forward, right? How do we manage our money so we can start rebuilding our reserves? Well, how can we maybe potentially cut some of our monthly expenses so that will help us to again, rebuild our lost reserves? I think for a lot of guests, first time home buyers, you will also, you have to get all these different professionals to help you. For example, insurance agent, realtors and loan officers when not. And then if I have no clue, I approach your center, would your center also be providing referral information on these kind of services? We can provide referrals. The only thing is, I mean, ultimately we want you to be able to shop. Yeah, so HUD really wants us, because if you just go to one company, how do you know that's the best deal you can get? The weather is mortgages, whether it's insurance, basically it's understanding what type of mortgages are available, what type of insurances are associated with a home purchase and why I would probably need one or not need one. And it's understanding those different types of policies, different types of insurances, different types of mortgages so that when I start talking to lenders, when I start talking to insurance providers, I can ask good questions. And then again, I can make a sound consumer decision because I kind of did my due diligence with the shopping part. Insurance, knowing what you are buying to before you, you know, your money part from your pocket, right? So what is, what would be the recommended timeline? If I'm thinking about, you know, buying my first home down the road, when should I initiate the contact with your center? Because it's a lifetime membership as soon as possible. I see. We've had people that they didn't realize they were close. You know, you get caught up with renting. And by the way, rent in Hawaii isn't cheap either. You know, you get caught up in that cycle, right? Sign a year lease. And then before you know it, that term is ended. You're just renewing your lease. And if you're paying $2,000 per month, that's 24 grand in a year. In four years, that's 96 grand. That could have possibly gone towards a mortgage or maybe toward a down payment. That's a good point. So what are the most frequent, I guess, issues the center's members need help on, you know, especially as with regard to condominium purchases? Condominium purchases, I think one thing that's come up is not only the price. I mean, that's always been a challenge in Hawaii, not just recently. It's always been challenging. The interest rates right now, not in the best favor for buyers, especially that first time, not compared, you know, after being spoiled for almost 10 years with really historic low interest rates. But again, it's just a matter of understanding, what can I do? What do I have control over? And really what we have control over is our own finances. Yeah, so it's about getting yourself mortgage ready because not only do the mortgage programs require you to qualify for them, but even the assistance programs. We talked about down payment assistance. Some of them have requirements for a minimum down payment from the borrower before you can even apply for it. It might be 3%, it might be 5%. They may have a minimum credit score requirement in order for you to apply for that assistance. And a lot of the new development as well when you see reserve units or affordable units for first time home buyers, they also require home buyer education. So again, if you're thinking about home ownership, you wouldn't have to wait and be ready to purchase. It's really what I'm saying. We're starting to have, you know, families that have purchased way back when the center first opened, they're sending their kids. Before you, you know, now that they're older and they're starting to, you know, enter the workforce, they're thinking, okay, before you think about buying that $50,000 vehicle, and maybe you should think about home ownership first. So they take the classes and then all of a sudden, oh, you know what, you know what, I can deal with the used car a little bit longer. No. And sometimes you got to hear it from somebody else, right? Because we're all hearing it from mom and dad, and then we tend to, yeah, yeah, yeah, yeah, and then goes in one ear, goes out the other. But sometimes when you hear it from somebody else, then the light bulb goes on. That's so true. Our time is up. Thank you so much for joining us Dale and providing all these useful information. And I highly recommend our audience to check out the website for Hawaii Home Ownership Center. Thank you again, Dale.