I have seen several cases where loans get blocked at the last minute while trying to finalize a condo contract in Honolulu. The unit was appealing, and the price was right, but the building itself did not meet the lending criteria.

The median price for condos in Hawaii was around $640,000 as of the second quarter of 2026, and statistics from March indicated a drop to $531,000, a 3 percent decrease over the past year. Oahu condo prices are generally holding steady, but rising maintenance and insurance costs have made buyers more cautious. The volume of condo transactions has decreased by 4.8 percent, while inventory has increased by 5.8 percent, reaching 2,210 units.

Monthly maintenance fees for Oahu condos typically range from $500 to $800, with oceanfront or resort-style buildings sometimes exceeding $2,000. Families relocating from the mainland often find these maintenance costs burdensome, but property tax rates are generally lower than in many mainland states, so it's more accurate to compare total ownership costs by considering both maintenance fees and property taxes. As of August 2026, the maintenance fee per square foot was recorded at $1.35. Many Hawaii maintenance fees include utility costs like water and electricity, which can make them appear cheaper when compared to mainland standards, so caution is advised.

Hawaii has stricter reserve fund regulations compared to many mainland states. Oahu condo associations are required by Hawaii state law (HRS 514B-148) to reserve at least 50 percent of anticipated replacement costs, or 100 percent under a cash flow method. Additionally, an independent reserve study expert must visually inspect major facilities and update the results every three years. This is a positive aspect, as the strong regulations increase the likelihood that reserve funds are actually accumulated compared to many mainland states.

However, there are also clear disadvantages. Hawaii condos often take the form of condotels or have concentrated ownership by investors, which frequently classifies them as non-warrantable. Areas like Ko Olina, where resort-style condos are clustered, are particularly affected. Major banks on the mainland have limited experience with Hawaii condo loans, and it is not uncommon to discover that a loan is unavailable for a building only after the contract has progressed significantly.

In March 2026, Fannie Mae eliminated the 50 percent cap on rental unit ratios, but the provision that limits any one entity from owning more than 20 percent of a building with 21 or more units remains. Starting from applications submitted after August 3, the streamlined review process for buildings with more than 10 units will be eliminated and will transition to a formal review, with the reserve requirement ratio increasing from 10 percent to 15 percent in 2027. Here are some items to check before signing a contract:

• Whether the building is warrantable and which banks can provide loans
• History of short-term rentals and condotel usage
• Latest results of the reserve study and compliance with the 50 percent standard
• Delinquent unit ratios and litigation history

While rental demand remains steady across Oahu, it is important to remember that if loans are blocked, the pool of potential buyers at the time of resale will also narrow. Particularly in Hawaii, condos can be traded in a leasehold format separate from property ownership, so distinguishing whether a listing is fee simple or leasehold is crucial for both loan and resale considerations. Other risk signals, such as delinquent unit ratios or pending litigation, should also be checked, just as with mainland condos. Weighing both the advantages and disadvantages, it can be concluded that while Hawaii condos are likely to be well-maintained due to strong regulations, the initial step of verifying loan conditions requires an additional layer of diligence compared to other states. This article is not investment or legal advice, and it is recommended to consult with a professional experienced in Hawaii condo loans before finalizing any contracts.