Hawaii business leaders partner with Landed to help teachers buy homes By Janis L. Magin – Real Estate Editor, Pacific Business News Apr 30, 2019, 2:54pm HST Updated May 1, 2019, 12:15am EDT The Hawaii Executive Conference, the Hawaii Community Foundation and the state’s four largest banks have partnered with a San Francisco-based program called Landed Inc., which has a $25 million fund to help provide down payment assistance to public schoolteachers who want to buy a home. Landed Inc. has already provided funding to some 200 educators in school districts in the San Francisco Bay Area, Los Angeles and San Diego in California and in Denver and Seattle. Hawaii is the firm’s first statewide launch. The Chan Zuckerberg Initiative, the organization founded by Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan, invested $5 million in Landed two years ago and helped make the connection to Hawaii business leaders through their Kauai-based consultant, Joy Miura Koerte of Fujita & Miura Public Relations. Zuckerberg and Chan own more than 700 acres of land on Kauai’s North Shore. Koerte suggested the firm to Micah Kane, president and CEO of the Hawaii Community Foundation, who brought it to Duane Kurisu, founder of aio and chairman of the Hawaii Executive Conference, and Keith Amemiya, senior vice president and Island Holdings Inc. They worked as facilitators to bring the program to the state Department of Education and the banks — American Savings Bank, Bank of Hawaii, Central Pacific Bank or First Hawaiian Bank have signed on to provide mortgage financing to the participants, who must be employees of the DOE. Landed already has plans to expand the program to employees of colleges, universities and private schools. “We enlisted the help of the local banks because they need financing partners, and they stepped up right away, very willingly, to assist schoolteachers,” Amemiya told Pacific Business News. “We’re going to give them access to banks and give them the roadmap on what they need to do to buy a house.” Kane said that historically in Hawaii “at least in my career over the last 30 years is we see these problems and you start diving into it and you start realizing how complex it is and you give up.” “So I think right now, you have some infrastructure that is willing to go in the long game,” he said. “The Hawaii Executive Conference, Hawaii Community Foundation and all of these leaders are stepping forward." Landed is currently building a network of local real estate agents, who pay Landed a portion of their commission as a referral fee, which is one of the ways the company makes money. So far, it has signed
up "Mark Tanaka from Kauai Realty, Becky Hanna from Island Sotheby's International Realty on Maui, Vineeta Jetley and Shari Hooks from Coldwell Banker Pacific Properties on Oahu, and others," Ian Magruder, Landed's partnerships lead, told PBN. "We like working with Realtors who have a background in or family connections to people who work in education and understand the unique challenges facing teachers and school staff in Hawaii," he said in an email. How the program works is that Lended provides half of a 20 percent down payment of up to $120,000 for a home purchase, which helps the buyer avoid having to pay primary mortgage insurance; in exchange, Landed puts a second lien on the property, after the bank, and receives 25 percent of the property’s appreciation when it is sold or refinanced, along with repayment of the initial investment. For example, a teacher who buys a home on Oahu for $782,500, the median price for March, would put down $78,250 and receive the same amount from Landed to make a 20 percent down payment, with the remaining 80 percent financed with a conventional mortgage from one of the four banks. If that home is sold two years later for $882,500, or appraised for that amount when if the loan is refinanced, then Landed receives 25 percent of the $100,000 appreciation, or $25,000, plus the initial $78,250 investment. If the value of the home depreciates by, say, $100,000, then Landed takes a 25 percent share in the loss, which would be deducted from the initial investment, so the homeowner would repay $53,250, although, as Education Week pointed out last year, the areas where Landed operates, including Hawaii, are places where real estate prices tend to appreciate. Nearly a dozen people have already paid Landed back, co-founder Alex Lofton told PBN. “We’ve had about 10 people already pay back Landed,” he said. “Some people, their plan was to use this as a stair step at the right time when they needed to buy and paying down their mortgage, and now prices have appreciated and they wanted to get out.” Landed will hold informational sessions on the program next week on Oahu, Maui, Kauai and the Big Island.