Homeownership is on the near horizon for an initial group of Native Hawaiian households to benefit from a historic 2022 appropriation by the state Legislature.

The state Department of Hawaiian Home Lands on Saturday selected 52 beneficiaries to receive homestead leases at a Maui project where a developer is going to build homes for the lot lessees at the agency’s planned Pu‘uhona Homestead subdivision in Wai­kapu near Wailuku.

Initial homes featuring three to five bedrooms on lots averaging 7,500 square feet are expected to be completed by mid-March and are to be sold to beneficiaries for $509,800 to $699,000.

Pu‘uhona represents the first DHHL homestead project delivered using part of $600 million appropriated by state lawmakers two years ago to reduce the agency’s waitlist for homesteads.

“The awarding of these homes to these families today is a fantastic step forward for our state,” Gov. Josh Green said in a statement announcing Saturday’s lease awards. “Housing is such a critical need for our residents in general, and Native Hawaiian beneficiaries on the waiting list have been acutely aware of that need for a very long time.”

About 28,700 applicants are on DHHL’s homestead waitlist, and the $600 million appropriated via Act 279 in 2022 was aimed at significantly reducing the backlog that the agency has struggled with in large part due to meager funding from the state over many decades and a high cost to install infrastructure on land DHHL owns.

DHHL has projected that the $600 million will allow it to develop about 2,200 lots in addition to acquiring land for subdivisions that can be produced faster and for less expense compared with developing some of the agency’s land holdings. Some money also is intended to assist beneficiaries in other ways.

Some of the projects being funded by Act 279 have come about after the appropriation was made, while others were in DHHL’s development pipeline previously.

Planning for Pu‘uhona dates back to around 2018 when DHHL solicited proposals to provide the agency with land on Maui for a project initially called Pu‘unani.

In 2019 a deal was made with Maui development firm Dowling Co. to convey 47 acres of land for the project to DHHL in return for 300 affordable-housing credits that Dowling can use to satisfy Maui County requirements for producing affordable housing tied to other development projects. Of the 300 credits, 139 have been conveyed, and the balance is due when homes are completed.

Previously, delivering initial homes at Pu‘uhona was expected in 2023, followed by completion of all 137 homes and 24 house lots at the project this summer. But that timetable was subject to appropriations from the Legislature that didn’t happen.

DHHL used $22.7 million from the Act 279 appropriation to fund Pu‘uhona site work that began in May 2023 under a contract with Maui Kupono Builders. Dowling is expected to begin building the first phase of 52 homes in September.

DHHL also is providing $25 million in Act 279 funding to Dowling as a loan that will keep home prices lower by reducing the amount of more costly financing the company needs to develop the homes before selling them to beneficiaries.

Two more phases of work are to follow to complete Pu‘uhona, which is to include 24 lots for homes that will be built either by beneficiaries themselves or by Habitat for Humanity Maui.

Under DHHL’s homestead program, beneficiaries, who must be at least half Hawaiian, receive 99-year land leases that cost $1 a year and must pay for or build their own home.

Dowling President Everett Dowling said in a statement that it has been an honor and a privilege to work with DHHL.

“We hold DHHL and its beneficiaries in high esteem and are committed to providing quality homes that will anchor them in a community where they can thrive and build lasting legacies for generations to come,” he said.

Kali Watson, DHHL director, said in a statement that he hopes the Pu‘uhona homes will help Maui in the wake of the Aug. 8 wildfire that destroyed most of Lahaina and killed 101 people.

“The people of Maui have faced numerous challenges since the wildfires,” he said. “We hope these homes will inspire and uplift a community recovering from a devastating tragedy.”