DSCR Loans in Kihei, Hawaii
Kihei's typical value fell 8.2% in a year to $1.01M while Ordinance 5909 phases out the Minatoya vacation rentals by 2031. Price every condo here as a long-term rental or do not price it at all.
MARKET OVERVIEW
The Kihei Rental Market for DSCR Investors
Kihei is where Maui's short-term rental reckoning is landing hardest, and the price chart shows it. The typical value fell 8.2% over the year to $1,011,431 as of July 2026, the steepest decline on this page, with rents nearly flat at $3,182. The driver is not tourism demand. It is Ordinance 5909, the December 2025 law phasing out transient vacation rental use in roughly 7,000 grandfathered Minatoya-list apartment-zoned condos, the exact product that made Kihei an investor market for forty years.
The timeline: STR use in the affected buildings must end by January 1, 2029 in West Maui and January 1, 2031 everywhere else, including Kihei. Owners sued within weeks, arguing an unconstitutional taking, and in June 2026 the council passed Bill 88 creating new H-3 and H-4 hotel-zoning classes that could eventually let some buildings continue. That is three possible futures for the same condo, and none of them is knowable at closing. This site's position is the only defensible underwriting position: price every Kihei condo as a long-term rental, and treat any STR continuation as unpriced upside.
The long-term math is brutal and worth stating plainly: a $700,000 2-bedroom renting long-term near $3,000 with four-figure dues, non-owner-occupied taxes at Maui's FY2026-27 tiered scale, and repriced insurance pencils far below coverage. Sellers know it, which is why the market is repricing toward where a long-term file can actually clear. For patient capital, that repricing is the opportunity.
Ordinance 5909 phases out short-term rental use in Kihei's grandfathered apartment-zoned condos by January 1, 2031, with litigation and the Bill 88 hotel-zoning path both unresolved, so no Kihei purchase should be financed on projected nightly income.
Kihei Market Pulse
Monthly tax on a $1,011,431 purchase: $529/mo. Investor-owned, not homestead.
Market-level estimate. Premiums are property-specific and count against your DSCR, so quote early.
WHERE DEALS PENCIL
Kihei Submarkets Investors Target
Kamaole
The central beach-park condo belt where Q1 2026 sales closed at a $610,000 median, down from the peak. Heavy Minatoya-list concentration means the phase-out and the repricing are both centered here.
North Kihei
The windier, cheaper end near the whale sanctuary: older condos and a strip of single-family streets. Long-term tenant demand from Kahului commuters is genuine, and the STR question matters less here.
Maui Meadows
The half-acre upslope subdivision between Kihei and Wailea: single-family homes, ohana-unit potential, and residential zoning that was never part of the vacation-rental economy. The stable end of the market.
Wailea Border
Condos at the resort boundary where hotel-district zoning, not the Minatoya list, governs some buildings. Zoning class determines everything here; two projects a street apart live under different laws.
Submarket figures are researched estimates for orientation, not appraisals. Your matched specialist runs property-level numbers on any address you bring.
STR PHASE-OUT
The Minatoya list is being unwound: what Ordinance 5909 and Bill 88 actually say.
For decades roughly 7,000 Maui condos built on apartment-zoned land before 1989 operated as legal vacation rentals under a zoning exemption known as the Minatoya list, and Kihei's beach-road buildings were its heart. That era is now ending on a statutory clock. Bill 9, passed by the county council on December 15, 2025 and signed the same day as Ordinance 5909, phases out transient vacation rental use in those buildings: West Maui by January 1, 2029, the rest of the county, including every Kihei complex, by January 1, 2031, with no renewals or opt-outs written into the law. Two forces could still bend the outcome. Owners filed suit within weeks, including Malter v. Maui County, case 2CCV-25-0003778, arguing the phase-out is an unconstitutional taking of vested property rights, and that litigation is unresolved. And on June 19, 2026 the council passed Bill 88, creating H-3 and H-4 hotel-zoning classifications that could allow some buildings to seek rezoning and continue nightly rental under hotel rules. Neither path is dependable enough to borrow against. The underwriting consequence is simple: a Kihei condo's financeable income is its long-term rent, roughly $2,900 to $3,000 for a 2-bedroom, against dues that jumped with insurance, Kihei Alii Kai's fees rose 53% from 2023 to 2024, and Maui's non-owner-occupied tax tiers. Your matched specialist will structure the file on that math, with any STR revival treated as free upside rather than load-bearing income.
DEAL EXAMPLE
Sample Purchase Deal in Kihei
2-bed / 2-bath condo
Kamaole, Kihei, HI
What the Specialist Structured
- Refused to underwrite the seller's vacation-rental income history because Ordinance 5909 ends that use in this building by 2031, and structured the file no-ratio on the honest 0.57 long-term coverage instead
- Verified the association's post-2024 insurance-driven dues at $1,350 and its master policy adequacy, the line item that moved most on Maui since the fires
- Underwrote Maui's non-owner-occupied tax tiers for fiscal 2026-27 rather than the owner-occupied figure in the listing remarks
Monthly Breakdown
This deal qualified on the property's income alone. No tax returns, no W-2s, no employment verification.
Results may vary. This is a representative example, not a guarantee of future performance.
This deal example is for illustrative purposes only and is based on representative scenarios across our broker network. Actual loan terms, approval, and closing depend on your full credit profile, property details, appraisal, and the matched lender's specific guidelines. This is not a loan offer or commitment to lend.
FREQUENTLY ASKED
DSCR Loan Questions for Kihei Investors
Legally, many Minatoya-list buildings can operate today, but the use is on a statutory clock: Ordinance 5909 ends transient vacation rental use in Kihei's grandfathered apartment-zoned buildings by January 1, 2031. Litigation seeking to overturn the phase-out is pending, and Bill 88's new H-3 and H-4 hotel zones may eventually offer some buildings a rezoning path, but neither outcome is knowable now. A loan you take today runs decades past the deadline, so no careful lender or buyer prices the nightly income as permanent. Buy the unit only if the long-term rental math, or your own use plus appreciation, justifies it.
Nobody knows, and this site will not pretend to. What is knowable: the decline is concentrated in exactly the buildings losing STR economics, the seller pool includes owners whose carrying costs jumped when master-policy insurance repriced, and the market must ultimately clear at prices where the next buyer's actual permitted use pencils. Long-term rental math at current rents supports valuations meaningfully below the STR-era peak in many complexes, which suggests the repricing is rational rather than panicked. Buyers who underwrite the long-term number and negotiate from the 7-plus months of supply are being paid for the uncertainty rather than paying for it.
Insurance, almost entirely. Hawaii condo associations saw master policy premiums rise 300% to 600% in a single year after the 2023 fires repriced island risk, with some buildings hit harder, and Kihei complexes passed it straight into dues: Kihei Alii Kai rose 53% from 2023 to 2024, Luana Kai 48%. Oceanfront buildings with older construction pay the most. For underwriting, the current dues figure is a floor, not a ceiling, and an association with an under-insured master policy is a financing problem on top of a cost problem, because lenders check coverage adequacy. Your matched specialist reviews the association budget and insurance certificate before the appraisal is ordered.
Three shapes. First, the long-term rental condo bought at a price where $2,900 to $3,000 rent against full dues and investor taxes lands within structuring range, which means negotiating well below peak comps. Second, Maui Meadows and the single-family streets, where residential zoning never depended on the Minatoya exemption and the tenant pool is Kahului commuters and remote workers. Third, patient capital buying quality buildings through the uncertainty, structured no-ratio with reserves to fund negative carry, positioned to win under any of the three legal outcomes. What is not defensible is borrowing against nightly income the county has scheduled for termination.
LOAN PROGRAMS
Programs That Fit Kihei Deals
No-Ratio DSCR
No minimum DSCR required. 30% down.
Interest-Only DSCR
Lower monthly payments for better cash flow.
Portfolio DSCR
Finance multiple properties under one loan.
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Match Me With a SpecialistLoans in Hawaii are originated by a licensed DSCR broker matched to your state. The matched broker holds the required state license; DSCRBroker.com is not the originator. The matched broker is not affiliated with DSCRBroker.com except as a participating broker in our matching network. All lending decisions and terms are determined solely by the matched broker and their wholesale lending partners. Market data on this page is drawn from public sources and refreshed periodically; figures are estimates for orientation, not appraisals or guarantees.