With a reverse mortgage Hawaii homeowners can draw on equity and owe no monthly payment, while state law governs the firm that issues your funds. A Home Equity Conversion Mortgage, known as a HECM, is the federal program that most borrowers select. Many loans reach $1,249,125, the HECM lending limit the federal government sets, since island home values run high. Federal insurers backed 95 HECMs in Hawaii from October 2025 to August 2026, after 112 in fiscal year 2025. For those 95 loans, the median home value came to $1,015,000, and 30 borrowers hit the $1,249,125 cap. The median initial principal limit borrowers received was $447,300, the starting pool of cash before fees are taken out. The median note rate sat at 5.875%. Because 0 federally approved counseling agencies are located in Hawaii, your required counseling session will happen by phone with a mainland counselor.
Can you turn to the DCCA Consumer Protection Office for help with a lender dispute?
You can call the state consumer protection office at 808-586-2630 to report unfair credit practices or misleading advertising. Part of the same Hawaii Department of Commerce and Consumer Affairs, the Division of Financial Institutions handles oversight of reverse mortgage lenders in Hawaii. Through licensing, exams and enforcement, it watches over loan originators, originator companies and mortgage servicers. After closing, the company that handles your account and distributes your funds is called a mortgage servicer. National banks, federal savings banks and federal credit unions aren't supervised by this state division, as federal rules dictate. Find out ahead of time what charter your lender has. The department can assist if you go through a non-judicial foreclosure, which is one handled without going to court. Its Mortgage Foreclosure Dispute Resolution program at 808-586-2886 lets owner-occupants meet with lenders within 3 months to work out payment plans or loan modifications.
The 1999 reverse mortgage bill and servicing rules from Chapter 454M
Any company that sends you funds from a home equity conversion mortgage is directly subject to Hawaii’s mortgage servicer licensing law. Section 454M-1 of the Hawaii Revised Statutes says servicing a loan covers making payments to the borrower. So the firm sending your loan money has to carry a state license. In 1999, lawmakers also put forward House Bill 553, but official documents don't prove it became law. Under Section 5 of that proposed legislation, no loan commitment would have gone forward without your signed statement that you received a state counseling notice. For need-based aid programs, the bill's Section 4 would have counted your payouts as loan proceeds instead of income.
Honolulu County's senior property tax exemption worth $160,000
Protecting your home is easier when your tax bill is smaller. You have to keep up with property taxes and homeowners insurance payments under the federal reverse mortgage requirements set by the Consumer Financial Protection Bureau. You also have to live in the home as your main residence and keep it well maintained. Getting behind on property taxes can push your loan into default, so local help makes a difference. An owner-occupied main home in the City and County of Honolulu gets its taxable value lowered by $120,000 through the home exemption program. Once you turn 65, your exemption goes up to $160,000, and no income cap is stated. On July 1, 2027, Honolulu's exemption climbs to $140,000, or $180,000 when you're 65 or older.
