That Responsible Hawaii State Government Again

According to today's Honolulu Star-Bulletin, the Hawaii State Government is working to inflate the housing bubble again. I guess because it worked so well the last time.

First-time homebuyers in Hawaii may be able to receive mortgage loans that will help cover part of a down payment, under a state-run program announced Monday.

The Hawaii Housing Finance and Development Corp. said $43 million in loan financing is available

Actually, not just first time homebuyers, but people who have not "owned an interest in a principal residence for the past three years."

Just to make sure that only financially responsible loans are made

Qualified buyers also must meet income and home price restrictions.

For a family of three or more, the annual gross income limit is $114,240 on Oahu..

OK, so the pols think that people with over a hundred thousand a year need subsidies. Leaving aside the question of just who gets to pay the taxes which make those subsidies possible, how much can this hypothetical family desperately in need of subsidies pay for a house?

"Home price limits are $723,417 on Oahu..." If one is bumping up against the maximum income limit, and buy a house near the maximum price limit, the price will be roughly six and a third times household income.

Gov. Neil Abercrombie said in a statement that the additional loan packages with down-payment assistance will help more people invest in their long-term future and stimulate economic activity.

So, our Noble State will be helping people borrow down payments to buy houses they cannot possibly afford without whopping down payments.

Do foreclosure actions stimulate economic activity?