Hazard zone boundaries are approximate.
The change in the degree of hazard from one
zone to the next is generally gradual rather than
abrupt, and the change can occur over the distance
of a mile or more. Within a single hazard zone,
the severity of hazard may vary on a scale too
fine to map. These variations may be the result of
gradual changes that extend across the entire
zone. For example, the hazard posed by lava flows
decreases gradually as the distance from vents
increases.
There may be abrupt changes, however, in the
relative hazard because of the local topography.
For example, the hills behind Ninole stand high
above the adjacent slopes of Mauna Loa and
consequently are at a much lower risk from lava
flows than the surrounding area, even though the
entire area is included in a single zone. To
determine the hazard differences within a single
zone, more detailed studies are required.
(U.S. Geological Survey 1990-259-799)
Agricultural Land
The Big Island has thousands of acres of land.
Most of the land is zoned for agricultural use.
There are subdivisions that are zoned for ag use
and enjoy a large tax break if any kind of
agricultural use is in place. Crops, livestock,
fish farms, and the like allow an owner to be
considered for agricultural use.
When lenders receive a loan package that has
income from the use of the land and it represents
more than 25% of their income, they must get a
commercial loan for the purchase. Large parcels
are sometimes subject to other financing too and
lenders will not finance homes that are not on the
electric grid. They do allow for water catchments
if it is common for the neighborhood. (It is very
common on our island to have a catchment tank
instead of county water systems. This is more
prevalent in the open areas of our island and not
the subdivisions.)
For more discussion, call us at 888-757-2170.
Leasehold Property
Leasehold properties are selling the right ot
use the land. The land is owned by private
individuals, estates, and the State of Hawaii. The
land owner designates the usage of the land in
regards to dwellings, agriculteral uses, and the
rent to be paid. The lease will state the amount
of rent to be paid and when the lease can or will
be renegotiated. Lenders look at the renegotiation
and the expiratrion of the lease to be able to
offer a term on the loan. Some leases have already
stated when the rent will increase and by how
much.These are, of course, more favorable to
lender because they can calculate future debts to
the borrower.
Lemding agencies and investors customarily
stipulate that leasehold properties have a minimum
number of years remaining on the lease before it
expires. In addition, they often specify a minimum
term during which the borrowers payment
obligations are fixed and may not increase.
Condotels
Hawaii is considered a resort area. We have
condo projects that are run like a hotel except
that the units are owned by individuals and run by
hotel management companies. If you purchase a
condo that has maid service, rental pools,
timeshare units, low owner occupancy percentages
or commercial areas in the project, the financing
that you will be offered will not be the lowest
rate and best down payment allowed as a home for
an owner occupant would be. There are other
criteria that is used to determine if a project is
a condotel and varies from lender to lender.
Lenders that live and work in these areas
usually know if a project is a condotel or not.
Just another reason that local knowledge is key.
Call us for information on Big Island condo
status.
CPR's
(Condominium Property Regimes)
Many years ago, the County of Hawaii started to
allow home owners to subdivide their properties
utilizing the condo laws of Hawaii. It allowed
them to take a large piece of land and put more
homes on the without having to increase
infrastructure. This saved thousands of dollars
and many months in time. It also helped local
families to give housing to their children and
parents.
There is a shared driveway and sometimes the
water is shared. This would be the common elements
for the condo and other condo issues apply.
Zoning laws were also over looked in this
process so there are some properties here that do
not conform to the zoning laws and have been over
built without the infrastructure to support the
amount of people living on one system. (Septic and
cesspool). This has all been grand fathered into
the system, however, lenders do require that when
a loan is originated, the appraiser use other CPR
properties to compare the subject home to for the
value. We must also charge as if it were a real
condo project. The mortgage document has a condo
rider added to it also.
Knowledge of this kind makes you an informed
buyer. Call us for more information to help your
purchase go as smooth as possible.
We invite you to contact us to discuss your
particular needs. We look forward to serving you.
