The Department of Hawaiian Home Lands is trying something it has never done before: putting factory-built, single-family modular homes on homestead lots. The pilot covers 24 scattered lots on Oahu's west side, 16 in Kapolei and eight in Waianae, and the houses are coming from Fading West Development's factory in Buena Vista, Colorado (via Hawaii News Now).
The homes cross the Pacific by barge and go together quickly once they land. "They came off the barge on a Friday and they had them all set up here on a Monday," Elijah Davidson, a project manager in DHHL's Land Development Division, told Hawaii News Now. He said finish work such as appliances and paint took about a week and a half after that.
Fading West told the station each home is built in its factory in about eight days, and put the cost at $250,000 to $350,000. The station didn't say whether that figure includes shipping to Hawaii.
What a family actually pays is higher. According to Davidson, the 4-bedroom, 3-bath model is priced at $585,600, compared with about $670,000 for a similar home on the open market. The 3-bedroom, 2-bath model is $499,000, the station reported.
DHHL's project page for the West Oahu Scattered Lots Pilot Program spreads the 24 lots over four communities: Ka'uluokaha'i II-B, Ka'uluokaha'i II-C and Kanehili in Kapolei, plus Waianae. A lot matrix posted by the department lists sizes from roughly 5,000 to 8,800 square feet, with the Waianae lots generally the larger ones. It also assigns a named home model to each lot, including two lots marked for ADA models. A few lots carry easements, either a Hawaiian Electric electrical easement or a DHHL drainage easement.
The department broke ground in Waianae on Aug. 29, held an orientation for eligible beneficiaries the same day, and set a Sept. 25 deadline for response forms and mortgage pre-qualification letters. Lot selection was by invitation on Oct. 24, when Hawaii News Now reported that 24 families received leases. Lessees are expected to begin moving in by the end of the year.
Eligibility was limited to undivided-interest and project lessees in Ka'uluokaha'i and Kanehili, plus people on the Oahu islandwide residential waitlist with application dates up to Nov. 21, 1977, according to DHHL's offer page.
Affordability is the whole point. "When we look at the make-up of our waitlist, it's primarily individuals that are below 60% AMI," DHHL chair Kali Watson told the station.
A DHHL flyer for the "O'ahu Modular Pilot Program" ties it to federal NAHASDA block grant money. That program is capped at 80% of area median income, which in Honolulu is $123,200 for a family of four. The flyer lists no down payment, interest rates up to 1%, financing up to appraised value, mandatory housing counseling and an affordability restriction recorded through a lease addendum.
The pilot has changed shape along the way. Minutes from the Hawaiian Homes Commission's February meeting describe a NAHASDA plan for 19 modular homes in Ka'uluokaha'i and Waianae at an estimated $436,000 per unit. The final count is 24 lots.
This has been building for a while. In early 2025, Civil Beat reported that DHHL wanted to turn a hangar at Kalaeloa Airport into a modular home factory with Fading West as its partner, capable of turning out up to 40 homes a month. At that point the department estimated modular homes could cost 10% to 15% less than conventional construction.
Watson told Hawaii News Now he still hopes DHHL will one day have its own modular factory in the islands to bring costs down further. Fading West's Eric Schaefer said in a separate Hawaii News Now report that the approach could allow up to 240 homes to be added within a year. Neither DHHL nor Fading West has announced a location or timeline for a Hawaii plant.
Why it matters for Contractors
For a small Oahu builder, the house itself isn't the job here. It shows up mostly done. What's left is the work around it: foundations, utility hookups, setting and anchoring units, finish trades, driveways and the punch list. None of the sources say who is doing that site and finish work on this pilot, so if you want in on the next round, ask DHHL's Land Development Division how those scopes are being bought.
The bigger question is whether this becomes DHHL's default. The department has a long waitlist and says factory homes cost less. If a local plant ever opens, a good share of the framing and finish work that used to happen on homestead lots would move indoors to a factory. Small shops that know foundations, set work, utilities and modular finish details are the ones best placed to keep working either way.