3 Things to Consider Before Purchasing a Department of Hawaiian Homelands (DHHL) property:

  • The lessee (owner of leasehold property) who is 50%+ Hawaiian is the only one who can obtain VA financing.
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  • The appraisals for DHHL properties are different from regular fee simple and leasehold appraisals. Typically, an appraiser will take three approaches to determine value. These approaches are the market approach, cost approach, and investment approach. In the case of residential property usually the market approach and cost approach are used. The market approach considers comparable sales within the neighborhood to determine value. The cost approach considers the replacement cost of the dwelling and then adds the value of the land to this figure. In the case of a DHHL property, the market approach is not used, which means that the only determining factor of value is the replacement cost of the dwelling. This means there will be less appreciation for DHHL property compared with fee simple and other non-DHHL leasehold properties.
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  • The closing time for a DHHL property can take up to 4 months.
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