On Oahu, prices run high and rents, while strong, do not always keep pace. That makes the DSCR math tighter than on the mainland, and it is why so many Honolulu investors look for homes with an ohana unit or a second rentable dwelling on the lot.
In short: LendingStreet makes DSCR loans on 1-8 unit rentals across Honolulu and the rest of Oahu, qualified on the property's rent instead of your W-2s or tax returns. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, the minimum credit score is 620 and LLC borrowers are standard. On Oahu, the rent-to-price ratio usually decides the loan size, so many investors put more down or buy properties with two rentable units.
The City and County of Honolulu covers the whole island, so a Honolulu DSCR loan can be on a Kaimuki bungalow, a Kapolei townhome, a Kaneohe house or a Makiki walk-up. Each area rents to a different tenant base, from University of Hawaii staff and students in Manoa and Moiliili to military families near Joint Base Pearl Harbor-Hickam, Schofield Barracks and Marine Corps Base Hawaii in Kaneohe Bay.
Central and West Oahu, including Mililani, Waipahu, Ewa Beach and Kapolei, have newer subdivisions and townhomes with lower prices than town. Windward communities like Kailua and Kaneohe, and East Honolulu areas like Hawaii Kai, command higher rents and much higher prices.
| Area | Typical rental | What to watch |
|---|---|---|
| Kaimuki, Kapahulu, Palolo | Older single-wall and post-war homes, ohanas | Unpermitted additions, termites |
| Makiki, Moiliili, McCully | Condos and small walk-ups | Leasehold, AOAO dues, special assessments |
| Mililani, Waipahu, Ewa Beach, Kapolei | Newer homes and townhomes | HOA rules, rent vs price |
| Kailua, Kaneohe, Hawaii Kai | Higher-end homes | Low rent relative to price, flood zones |
Many Oahu lots carry a main house plus an ohana dwelling or an accessory dwelling unit, and two rents on one property can turn a ratio that fails into one that works. Before you count the second unit, confirm it was permitted. Enclosed carports, converted garages and downstairs units added without permits are common in older neighborhoods, and an appraiser may not credit rent from a unit that is not legal.
Ask for the building permit history from the Department of Planning and Permitting, and compare the square footage and unit count on the tax record with what you see on site.
This example is illustrative and not a quote. An investor buys a fee simple house with a permitted ohana for $1,100,000. The main house leases for $3,600 and the ohana for $2,400, for $6,000 a month. Property taxes are budgeted at $367 a month and insurance, including a hurricane policy, at $220.
At 80% LTV the loan is $880,000, estimated principal and interest is about $6,003, and the full payment is about $6,590, a DSCR of about 0.91x, below the 1.0x standard minimum. At 70% LTV the loan is $770,000, principal and interest is about $5,253, the payment is about $5,840, and the DSCR is about 1.03x. The investor brings $110,000 more to closing to make the ratio work.
| Item | 80% LTV | 70% LTV |
|---|---|---|
| Loan amount | $880,000 | $770,000 |
| Estimated principal and interest | $6,003 | $5,253 |
| Taxes and insurance | $587 | $587 |
| Total monthly payment | $6,590 | $5,840 |
| DSCR at $6,000 rent | About 0.91x | About 1.03x |
Much of Honolulu's rental stock is in condominiums, and some buildings, especially older ones in town and in Waikiki, sit on leasehold land. With leasehold, you own the apartment but lease the land, with lease rent that can reset and a lease that eventually expires. Leasehold units are harder to finance and are not eligible on many programs, so confirm fee simple or leasehold status on the listing and title report first.
For condos, the association of apartment owners (AOAO) dues count in the payment, and they can be high in older high-rises with aging plumbing, concrete repairs or elevator work. Ask for the reserve study, budget and any planned special assessments.
Honolulu's property tax rates are low compared with most of the mainland, but investors do not get the home exemption, and the city taxes residential property without a home exemption in a separate class with higher charges on higher-value tiers. The seller's tax bill, if they lived there, will understate yours.
Hawaii also charges general excise tax (GET) on gross rental income, and transient accommodations tax on short stays. These are taxes on income rather than part of the loan payment, but they reduce what you keep, so include them in your own cash flow plan.
Honolulu generally does not allow rentals of less than 30 days outside resort-zoned areas such as parts of Waikiki, Ko Olina and Turtle Bay, apart from a limited number of units with nonconforming use certificates. A 2022 city ordinance that raised the minimum stay to 90 days was challenged in federal court, so confirm the current rule with the Department of Planning and Permitting before you buy.
Most Honolulu DSCR loans are therefore underwritten on 12-month leases or rentals of at least the legal minimum stay. If you want nightly income, look at legally permitted resort-zone units, or consider markets on other islands that allow short-term rentals under county rules.
Standard homeowner policies in Hawaii usually exclude hurricane damage, so landlords often carry a separate hurricane policy. Low-lying areas near the Ala Wai, parts of Kakaako, Waikiki and some windward neighborhoods are in mapped flood zones, where flood insurance is generally required. Older homes may also need termite inspections and, at times, tent fumigation.
The same DSCR loan works for purchases and refinances. Cash-out goes up to 75% LTV, and seasoning rules vary by program. On Oahu, the ratio often limits cash-out before LTV does, so see our Honolulu cash-out page for how that plays out.
If the numbers come close but fall just short, sub-1.0 DSCR programs exist for some properties. They usually need more down payment or reserves.
Send the address, price, rents, tenure (fee simple or leasehold) and tax and AOAO figures through the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. We will run the ratio at a few loan sizes and show you where it works.
Yes. The loan qualifies on the property's rent compared with the payment, not on your personal income.
Oahu prices are high relative to rents. Many investors put more down, buy homes with an ohana unit or use a sub-1.0 DSCR program.
Leasehold units are not eligible on many programs. Confirm tenure early and ask us about the specific building.
Yes, if it is a legal, permitted unit. Rent from unpermitted units may not be counted.
Only if the unit can legally operate as a short-term rental, such as in a resort-zoned building. Outside those areas, Honolulu generally requires stays of at least 30 days.
Yes. Condo association dues are part of the monthly payment used to calculate DSCR.
Yes. We lend across Hawaii; see our Hawaii DSCR page for neighbor-island rentals.
No. Our investor loans are business-purpose loans on non-owner-occupied property only.
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