State opens $20 Million loan program for Hawai’i condominium repairs

Hawai’i officials have launched a new state-backed loan program to help condominium associations pay for critical building repairs as rising insurance costs and aging infrastructure continue to strain the state’s condo market.

The Hawai’i Green Infrastructure Authority announced the new Condominium Association Loan Program after Gov. Josh Green approved administrative rules to move the initiative forward.

The program will provide direct loans to Associations of Apartment Owners for projects intended to reduce property risks and improve insurability, including fire safety upgrades, pipe replacement and roof repairs.

State officials said Hawaiʻi’s condominium insurance market has become increasingly unstable in recent years, with many associations struggling to obtain full hurricane coverage as insurers raise rates or limit policies on older buildings with deferred maintenance issues.

The financing initiative was created under Act 296, which was approved during the 2025 legislative session. It directs the Hawaiʻi Green Infrastructure Authority to develop financing and credit enhancement programs for qualified condominium associations.

Under the new program, eligible associations may use loans for repairs and maintenance projects such as installing or replacing fire sprinkler systems, upgrading fire safety measures, replacing aging pipes and repairing roofs. Additional risk-reducing improvements may also qualify with the authority’s approval.

To obtain financing, condominium associations must first obtain at least one adverse action letter from a financial institution denying a loan request. Associations must also agree to secure full replacement property and hurricane insurance coverage after repairs are completed.

Officials said the state also established a companion credit enhancement program for community development financial institutions, allowing lenders to offer loans with reduced risk. The program uses state funds to create a loan-loss reserve designed to cover initial losses if borrowers default.

The loan and credit enhancement programs are supported through a $20 million reimbursable general obligation bond approved by the state.

Applications are being accepted on a first-come, first-served basis, with priority given to projects ready to begin construction and to improve a building’s ability to obtain insurance coverage.

Subject to funding availability, new loan commitments using funds from Act 296 may be made through June 30, 2027.

For more information on Condominium Associations or CDFIs, click here.