In Hawaii, more investors search for a DSCR loan than for hard money, and for good reason: Oahu's prices make a long-term rental loan the natural finish to almost any deal. But the islands tax investors differently from homeowners, Maui has set end dates for thousands of vacation rentals, and outside Oahu the lender looks hard at where the property sits. Here is how to underwrite a Hawaii deal around all three.
Hawaii has some of the lowest property tax rates in the country, but each county sets its own classes and rates, and all of them charge an investor more than a resident owner. On Oahu for the 2026 to 2027 tax year, a home the owner lives in, with the home exemption filed, is taxed at $3.50 per $1,000 of net taxable value. An investment home assessed at $1 million or more falls into the Residential A class, where the portion above $1 million is taxed at $11.40 per $1,000, more than three times the owner-occupied rate. The home exemption requires the owner to live there as a principal residence for at least 270 days a year.
The neighbor-island counties run their own versions. Hawaii County has created a separate class for long-term rentals and reported more than 800 applications to join it, a sign of where the counties are heading: lower taxes for homes rented to residents, higher ones for vacation rentals and homes that sit empty.
Two more state taxes belong in the numbers. Rental income is subject to Hawaii's general excise tax, 4 percent at the state level plus a county surcharge. And the conveyance tax on a sale is tiered by price, with higher rates for buyers who don't qualify as owner-occupants. Get both figures from your escrow company and your CPA before the offer.
Many Hawaii investment plans assume vacation-rental income. Check that assumption first. On Maui, Bill 9, signed on December 15, 2025, phases out transient vacation rentals in apartment-zoned districts, the roughly 7,000 condos known as the Minatoya List. Short-term rental use must end by January 1, 2029 in West Maui and January 1, 2031 in the rest of the county. Owners have sued, but as of mid-2026 no court had stopped the law, and the deadlines stand.
On Oahu, rentals of less than 30 days are generally not allowed in residential zones outside resort areas, and enforcement is active. Across the state, hotel- and resort-zoned units and properly permitted rentals continue under their own rules.
For a DSCR loan, that means underwriting on long-term rent unless the unit's zoning clearly allows short-term use and will still allow it for the life of your plan. A Minatoya condo priced on its vacation-rental income today is a very different asset in West Maui after 2028.
The Honolulu Board of Realtors reported an Oahu median single-family price of $1,240,000 for August 2026, up 12.2 percent on a year earlier and close to the record set that June. Condos moved the other way: the median fell about 1 percent to $510,000, with rising inventory and buyers weighing maintenance fees, insurance and the building's reserve funding alongside the price.
Those prices bump into two lines in the lender's guidelines. The standard maximum loan is $1 million per transaction, with larger requests considered case by case, and loans over $450,000 can carry an extra half point of origination. On a house worth $1.2 million after renovation, 70 percent is $840,000, which fits, but many Oahu single-family deals will sit near the top of the program.
For condos, the building matters as much as the unit. Special assessments, rising association fees and thin reserves change both the resale price and the rent needed to cover a DSCR payment. Ask for the association's budget and reserve study before the offer.
Our lending partner's guidelines look for properties within roughly 45 minutes to an hour of a metro area of at least 200,000 people, because resale depends on a deep pool of buyers. Oahu clearly qualifies. The neighbor islands are smaller markets, so a deal there gets closer scrutiny and may not fit the standard program. We will tell you in one conversation whether a Maui, Hawaii Island or Kauai deal can be financed, rather than letting you find out after the appraisal.
Wherever the property is, confirm it is fee simple. Hawaii still has leasehold property, where the building is owned but the land is leased, and a short remaining lease term makes a property hard to finance and hard to sell. Check flood zone and, on Hawaii Island, the lava hazard zone, because both change what insurance costs and whether it is available at all.
A DSCR loan qualifies the property rather than your paycheck: the rent must cover the payment, including principal, interest, taxes, insurance and, for a condo, association fees. Our lending partners' DSCR rental program starts at rates as low as 5.99 percent, with origination points from 1.5 percent, loan amounts from $75,000 to $2 million at up to 80 percent of value, and no minimum credit score. Cross-collateral loans are allowed across two or more properties. The lowest rates are reserved for the strongest applications.
The $2 million ceiling fits most of Oahu's market. What decides a Hawaii DSCR is usually the expense side: the Residential A tax rate on investment homes over $1 million, the general excise tax on the rent, insurance, and association fees on condos. Run all four before you count on the rent to carry the loan.
Hawaii is one of the states where our lending partners pay placement fees. The published fix-and-flip and bridge programs lend up to 100 percent of cost and 70 percent of the after-repair value, with a minimum loan of $50,000, a minimum credit score of 600, and loans of up to twelve months; the lender's underwriting guidelines set a nine-month standard term, with extensions considered case by case. The published starting rate is 10.99 percent plus 1.99 origination points.
The 10.99 percent starting rate is available after two loans have been paid off in good standing with our lending partner; a first-time borrower should expect to start above it and earn the way down.
A borrower with zero or one completed project is limited to a $40,000 renovation budget, which buys less in Hawaii than almost anywhere, given island construction costs. The guidelines also look for at least $15,000 in reserves plus the down payment and closing costs. Whether you search for hard money, private money or a fix and flip loan, these are the terms that apply.
1. Confirm the island and the zoning. Oahu fits the program most easily; neighbor-island deals need a closer look.
2. Price the property tax at the investor class, not the seller's homeowner rate.
3. Underwrite long-term rent unless the zoning clearly allows short-term use for your whole plan.
4. For a condo, read the association budget and reserve study.
5. Confirm fee simple title, and check flood and lava zones.
6. Get written contractor bids with shipping and island labor costs built in, plus at least ten percent for surprises. First-time borrowers are limited to $40,000 of renovation.
7. Add the general excise tax and conveyance tax to your rent and closing numbers.
A DSCR built on vacation-rental income the zoning won't allow, now or after Maui's deadlines.
A property far from a qualifying metro area, which covers much of the neighbor islands.
Leasehold land with a short remaining term.
A loan request above $1 million without the experience and reserves to support an exception.
A condo you'll live in part of the year. Property you or a close family member will use as a residence counts as owner-occupied under the lender's guidelines, and our lending partners cannot finance it.
Yes. Yes. The program covers loans of $75,000 to $2 million, enough for most of Oahu, at up to 80 percent of value, from 5.99 percent and with no minimum credit score. In Hawaii the loan is usually sized on long-term rent, and the investor property tax class, the general excise tax, insurance and any association fees all count against it.
The published starting point is 10.99 percent plus 1.99 origination points, available to borrowers who have repaid two loans in good standing. Newer borrowers pay more, and loans over $450,000, common on Oahu, can carry an extra half point.
Sometimes. The lender's guidelines favor properties near a metro area of at least 200,000 people, which Oahu meets and the neighbor islands generally do not, so those deals get closer review. Call and we will tell you quickly whether a specific property fits.
Only if the unit's zoning allows short-term use for your whole plan. Bill 9 ends short-term rental use in Maui's apartment-zoned districts on January 1, 2029 in West Maui and January 1, 2031 elsewhere, so many condos should be underwritten on long-term rent.
For practical purposes, no. Both names describe short-term loans from non-bank lenders, secured by the property. In Hawaii the bigger question is usually which loan fits the plan: a short-term renovation loan or a long-term DSCR rental loan.
Yes. Business-purpose loans on Hawaii investment property are an ordinary part of the market on Oahu and the neighbor islands. The lender and anyone arranging the loan remain bound by state and federal law, so ask for licensing information and confirm it. This is general information, not legal advice.
Want the long version? Two free landlord books cover what a rental really costs to hold and what the new federal housing law actually changed.
Answer these and we will tell you whether it is fundable, on what terms, and how fast it could close. Investment property only — our lending partners do not finance a home you will live in.
We will run the numbers and come back to you. If it is time-sensitive, call 903-636-7511.
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.
Washington · Colorado · DSCR loans · Fix and flip loans · Private money lenders · Loan calculator