A chance to buy a new home in Kakaako for far less than what most developers have been offering in recent years has generated a lot of interest in one planned tower.

The developer of the project at 615 Keawe St. called Ililani has passed out about 700 applications to prospective buyers or brokers for 165 moderately priced units in the planned 328-unit condominium since units became available July 26.

All the affordable condos — one- and two-bedroom units with 511 to 799 square feet of living space — are reserved for Hawaii residents with moderate incomes and are priced from $312,600 to $657,100.

A lottery will be held to select buyers who apply by 5 p.m. Aug. 24.

Mike Leslie, a school vice principal who stopped into Ililani’s sale gallery Wednesday with his fiancee, said a home at Ililani would cost him less than what he pays for rent in Kalihi.

“The affordable price is really affordable,” he said.

This year through June the median sale price for previously owned condos on Oahu was $419,000. But in the Ala Moana-Kakaako area, the figure is $680,000, meaning half the condos sold for less and half for more.

Several new Kakaako towers in recent years have had average prices of $1 million or more. The average price for all Ililani units is $638,000 when including 163 two-bedroom units to be sold later this month to buyers without income restrictions.

Ililani’s developer, Ken Chang, received exemptions from state development rules and county permit fees in exchange for making half the project affordable to moderate-income residents.

Chang obtained exemptions through the Hawaii Housing Finance and Development Corp., a state agency that mainly helps finance low-income housing projects but also can grant exemptions for predominantly moderate-income housing.

Exemptions for Ililani included $470,000 in waived county permit fees. HHFDC also allowed the tower to be more than twice as dense and closer to an adjacent tower than allowed under rules of the Hawaii Community Development Authority, a state agency that regulates development in Kakaako.

HHFDC said Ililani is the first project to also obtain a waiver for a development permit from HCDA.

As the regulator for development in Kakaako, HCDA can allow exemptions from its rules for voluntary affordable-housing projects, but its requirements and regulatory proceedings became less attractive to developers since the agency overhauled its affordable- housing rules two years ago.

Chang initially sought to develop Ililani under HCDA as the agency was reworking its rules. After being told his project would have to adhere to amended rules, Chang reworked his plan to take advantage of HHFDC benefits.

The developer said he knows demand for moderate-priced housing in Honolulu is high, so he wasn’t surprised by the response earlier this week at Ililani’s sales gallery operated by brokerage firm Locations LLC.

“It’s been running pretty strong,” Chang said.

Amenities planned for the 42-story tower include a recreation deck on the roof of a nine-story parking garage featuring a lawn, community garden, splash pool, grills and an outdoor movie screen. A multipurpose room, coworking space and 10 cars for sharing at discounted rates through car-share firm Hui also are planned.

There will be 372 parking stalls for residents. A city rail station is planned for an adjacent block.

Because half the units are priced below market rates, buyers of these units must agree to share appreciation with HHFDC when they sell their unit. Also, the agency has the first right to buy a unit if the owner elects to sell within 10 years. Owners also may not rent out their units.

Of the 165 affordable units, 33 would be reserved for households earning 80% of the median income in Honolulu, which equates to $77,120 for a couple. Another 33 units would be for households earning up to the median income ($96,400 for a couple), 50 would be for residents earning up to 120% of the median income ($115,680 for a couple) and 49 would be for residents earning up to 140% of the median income ($134,960 for a couple).

Chang expects to start construction in November and finish the tower about two years later.