Get the Leasehold Determination in Writing First
More Hawaii investment files die on land tenure than on income, credit, and property condition combined.
A meaningful share of Hawaii residential property particularly older condo towers in Waikīkī and parts of Kakaʻako — is leasehold. You own the structure; you lease the land underneath from a separate owner, often on a term with an expiration and escalating ground rent.
Most Non-QM investors will not finance leasehold at all. Those that will require substantial remaining lease term and will underwrite the ground rent escalation into your carrying cost.
The failure pattern is consistent: a file that looks strong on paper stalls at the title stage when the fee-simple/leasehold split surfaces on the preliminary title report weeks in, after appraisal has been ordered and the clock has run.
The fix is simple and nobody does it. Get the tenure confirmed in writing before the loan application goes to a lender, not after. Ask your agent for it, and if the answer is anything other than a clear “fee simple,” treat that as a material fact rather than a detail.
Everything below assumes you have cleared that gate.
The Lenders
Select Home Loans
Select Home Loans is a Non-QM mortgage broker (NMLS #2384002) writing investor loans in Hawaii. Territorial coverage is genuinely uneven here a number of Non-QM investors exclude Hawaii or restrict to Oʻahu and knowing which shelves write on which island is most of the practical value on a Hawaii file.
We quote the DSCR and bank statement alternatives alongside the 1099 program so you can compare paths on the same property.
Get a quote · (888) 550-3296
Other lenders worth calling — listed in no particular order:
C2 Financial Corporation, Hawaii Branch (NMLS #1244222) A licensed Hawaii mortgage broker publishing detailed Hawaii-specific Non-QM guidance across bank statement, DSCR, and asset-based programs, with island-by-island coverage of Oʻahu, Maui, Kauaʻi, and the Big Island. Genuinely local.
Lendmire A Non-QM brokerage publishing Honolulu-specific investor content, notably including the leasehold title issue discussed above. Places loans through wholesale investors rather than funding directly.
The Doce Group Publishes Hawaii DSCR content with island-level detail across Oʻahu, Maui, and Big Island submarkets, including explicit leasehold screening as part of their process.
Capital Home Mortgage Hawaii Maintains Hawaii operations across 1099, bank statement, asset, and DSCR programs.
Truss Financial Group A Non-QM-focused brokerage writing investor bank statement, 1099, DSCR, and asset depletion programs, with a hands-on approach to self-employed investor scenarios.
Carrington Mortgage Services Non-QM lender with alternative documentation investor programs and generally flexible guidelines relative to mainstream lenders.
Hawaii coverage is uneven and island-dependent. Verify current licensure and territorial availability before relying on any listing see the disclaimer at the end of this page.
Almost Everything Here Is a Jumbo
Hawaii is the most expensive housing market in the United States, and the practical consequences for a Non-QM borrower are three.
Fewer investors will write the loan. Non-QM appetite narrows above conforming limits, and it narrows again in a territory some investors already restrict. The intersection of “writes in Hawaii” and “writes at this loan amount” is small.
Down payment and reserves rise. Plan on 25 percent down or more, and understand that six months of PITIA on a Hawaii property is a very large number in absolute dollars.
The qualifying method decides whether you clear the loan amount. In a lower-priced market, the difference between gross-receipts and expense-factor qualifying determines how much property you get. In Hawaii it frequently determines whether the purchase is reachable at all.
How Qualifying Works
A 1099 loan qualifies you on income documented on your 1099 forms rather than the net profit shown after deductions.
Programs split into two camps. Some apply 90 percent or more of gross 1099 income with no expense deduction. Others apply an expense factor of 10 to 25 percent first.
On $180,000 of annual 1099 income:
| Method | Qualifying income |
|---|---|
| 90% of gross | $162,000/yr — $13,500/mo |
| Gross less 20% expense factor | $144,000/yr — $12,000/mo |
| Net profit from your tax return | frequently under $80,000 |
One year or two
Hawaii’s economy is tourism-weighted, and tourism is seasonal. Activity operators, guides, charter businesses, and hospitality contractors all earn unevenly across the year, and the islands have also absorbed genuine shocks wildfire, pandemic travel collapse that show up as anomalous years in an income history.
The 24-month lookback is generally the safer representation, and it gives an underwriter a second season to compare against. If a recent twelve months included a disruption specific to your island or sector, say so in writing before the file goes in rather than answering a condition later.
Short-Term Rentals: Verify Before You Underwrite Anything
Hawaii has moved harder against short-term rentals than almost any state.
Oʻahu has restricted rentals under 30 days outside resort-zoned areas. Maui County has moved against transient vacation rentals in apartment-zoned properties. Enforcement and permit status vary by county and by zone, and a property’s legal operating status is not something a listing description reliably conveys.
This matters less for a 1099 loan than for a DSCR loan, because you are qualifying on your income rather than the property’s projected rent. But it entirely determines whether the investment works. Verify permit status with the county before closing, and engage a local real estate attorney or agent for the regulatory picture a mortgage professional is not the right advisor on this.
Hawaii’s 1099 Population
Tourism, activity, and charter operators, heavily seasonal and heavily independent.
Real estate agents and brokers, where a single transaction in a high-value market can materially swing a year’s income.
Construction trades, working under material and freight costs unlike anywhere on the mainland.
Healthcare and travel contracting, including significant locum and travel-nurse rotation.
Remote consultants and technology contractors, a growing group whose income has no local seasonality at all often the cleanest Hawaii 1099 files.
Other Hawaii Specifics
Insurance is island-specific. Hurricane coverage is separate from standard hazard coverage statewide. Hawaii County properties in higher-risk lava zone designations can be difficult or impossible to insure conventionally, and lava zone designation affects lender appetite independently of insurance. Get a binder from a carrier that writes Hawaii regularly.
Condo warrantability. Beyond the leasehold question, Hawaii’s condo stock varies widely in reserve funding and project condition. Establish warrantability early.
LLC vesting is common. Many Hawaii investors hold across multiple islands and use LLC vesting for liability separation. Most DSCR programs permit it; confirm on any 1099 or bank statement file, where entity vesting is treated differently.
Investment Property Terms
- Down payment: 25 percent or more is realistic at Hawaii loan sizes
- Credit: 620 floor at most investors; meaningful improvements at 680, 700, 740
- Reserves: 6–12 months PITIA, large in absolute terms
- Prepayment penalties: common on investment property, typically 1–3 years, often buyable at a quarter to a half point
1099 or DSCR?
At Hawaii prices, long-term rent frequently fails to cover the payment, which puts many single-family and condo purchases below a 1.0 DSCR. Resort-zoned vacation properties with permitted seasonal projections can work; standard long-term rentals in the Honolulu suburbs are the more common DSCR candidate outside resort zones.
Use DSCR where the property genuinely covers itself and you have documented rental history or a defensible market rent.
Use a 1099 loan where it does not, where STR permit status makes projected rent unreliable, or where your documented contractor income is simply the stronger part of the file which, for Hawaii’s independent professional population, it usually is.
Questions to Ask
- Is this property fee simple or leasehold, and can I have that in writing? (Before anything else.)
- Do you lend on my island specifically?
- Do you qualify on gross 1099 income, or apply an expense factor?
- My income is seasonal will you run the 24-month scenario?
- What is your maximum loan amount in Hawaii?
- Can you quote DSCR on the same property?
Disclaimer
The lenders described on this page are listed in no particular order. Select Home Loans appears first because we publish this page and originate these loans; we have a commercial interest in this category. No lender listed has paid for placement.
This page reflects our opinion based on publicly available information at the time of writing. It is general information, not a recommendation, an endorsement, or an offer of credit. Lender programs, guidelines, licensure, territorial coverage, pricing, and availability change frequently and without notice, and nothing here guarantees that any lender is currently licensed in Hawaii, lends on your island, or will approve your file.
Nothing here is legal advice. Land tenure, short-term rental permitting, and lava zone designation carry significant consequences and should be verified with a Hawaii real estate attorney and the relevant county. Consult a licensed mortgage professional and where appropriate a tax advisor, attorney, or financial advisor before making any borrowing decision. Verify any lender’s licensure through NMLS Consumer Access at nmlsconsumeraccess.org.
Select Home Loans, NMLS #2384002. Equal Housing Opportunity.
