The Office of Hawaiian Affairs has approved a $90 million grant for the state Department of Hawaiian Homelands. Officials say the grant will allow the agency to build hundreds of additional homes for Native Hawaiians.

The money will be disbursed over 30 years and will cover the debt service on $40 million in bonds DHHL plans to take out to finance its 2008-09 construction budget.

OHA chairwoman Haunani Apoliona says the grant represents a "historic partnership" between OHA and DHHL, adding that the two agencies have never exchanged this much money.

Hawaiian Homes Commission chairman Micah Kane says the $40 million will cover the cost of building homes for 500 additional families over the next 12 to 18 months.