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Alaska First-Time Homebuyer Programs

Alaska is the state known for paying an annual check to its residents and such natural wonders as Mount Denali, America’s highest peak. Is it any wonder people might be looking to buy their very first home in the nation’s northernmost state?

There are plenty of assistance programs available for Alaska’s first-time homebuyers. From income-based down payment help to special programs open just to Alaska natives, there are a host of options to help you make the jump from looking to buying that first home.

In this guide, we will cover:

Alaska first-time homebuyer programs

Like many states, Alaska has its own state housing finance agency, the Alaska Housing Finance Corporation (AHFC). Created in 1986, the municipal agency is responsible for everything from administering senior housing programs to offering homebuyer education and down payment assistance for first-time homebuyers, veterans and other Alaskans.

Residents of the 49th state also have access to a number of regional housing authorities that provide localized homebuying help and several private nonprofits to turn to for additional assistance.

In January 2019, we researched the state’s first-time homebuyer programs by reviewing program websites and the website of the Alaska Housing Finance Corporation, as well as speaking to representatives from organizations that administer the programs. Here’s what first-time homebuyers in Alaska need to know.

Note: You can check current mortgage rates in the state of Alaska here.

Interest-rate reduction for low-income borrowers

Features

  • Reduced interest rate
  • Assists low-income borrowers

Eligibility

  • Assistance is available to first-time buyers and buyers who have not owned a home in the past three years.
  • Buyers are subject to income limits, which are adjusted based on family size.
  • Only owner-occupied, single-family residences, condominiums, units in a common interest community and Type I manufactured homes are eligible.
  • Buyers must complete homebuyer education classes.

How it works

Designed to help low-income buyers, this interest-rate-reduction program can reduce the amount you pay over the life of your loan. Buyers can get interest-rate reductions of 0.5 percentage points or 1 percentage point, depending on family income. The rate reduction applies to the first $180,000 of the loan amount, and loans exceeding $180,000 receive a blended interest rate.

Buyers whose household income is 60% or less of federal limits may qualify for a 1% interest-rate reduction, while buyers whose household income is 61-80% of federal limits may qualify for an interest-rate reduction of 0.5%. Find out if you meet income limits for the program, and contact a lender approved by the AHFC for more information or to apply.

Tax-exempt first-time homebuyer

Features

  • Lower interest rates

Eligibility

  • Assistance is available to first-time homebuyers, buyers who have not owned a property in the past three years (exceptions apply for homes within a targeted area, which is a federally designated area of economic distress) and veterans who meet certain criteria.
  • Buyers must meet federal income limit guidelines.
  • Homes are subject to maximum acquisition cost limits.
  • Eligible properties include single-family homes, condominiums, common interest community units, duplexes and Type I manufactured homes.

How it works

With the tax-exempt program, first-time homebuyers receive lower mortgage rates than they might otherwise get from a lender. If you take advantage of the tax-exempt program, you may be subject to a federal “recapture tax” if you sell your home within the first nine years of owning it, realize a capital gain on the sale and your income increases at the time of the sale above the allowable limits set by the government (all three must occur).

To find out if you qualify, check out the acquisition limits for properties and review the income limits for Alaskans in targeted areas, as well as those for Alaskans in non-targeted areas. You can also contact an approved lender directly.

Taxable first-time homebuyer

Features

  • Lower interest rates

Eligibility

  • Assistance is available to first-time homebuyers and buyers who have not owned a property in the past three years.
  • Eligible properties include single-family homes, condominiums, common interest community units, duplexes and Type I manufactured homes.

How it works

Unlike the tax-exempt program, the taxable first-time homebuyer program doesn’t have income limits or a maximum acquisition cost. That opens this reduced-interest-rate option up to more Alaskans. To find out if you’re one of them, check with an AHFC-approved lender.

Home Opportunity Program

Features

  • Down payment and/or closing cost assistance
  • Assists low-income borrowers
  • Available in major urban areas

Eligibility

  • This program is open to first-time homebuyers in some areas of Alaska. Eligibility requirements vary, depending on the nonprofit administrator.

How it works

Thanks to a collection of funds from the federal HOME Investment Partnerships Program (HOME), the American Dream Downpayment Initiative and State of Alaska Matching HOME Funds, some Alaskans can receive down payment assistance and closing cost assistance through this program, which is typically paired with a larger loan. Because the program is administered by various nonprofits, eligibility varies, although some limit the program to first-timers who meet income limits.

On the Kenai Peninsula, the Mat-Su Borough, Glennallen, Valdez, Cordova, Juneau, Haines, Ketchikan, Petersburg, Wrangell, Sitka and Kodiak, the program is open to first-time homebuyers who meet income guidelines. To find out if you qualify, contact the Alaska Community Development Corporation for information.

In the Fairbanks area, the program is administered for seniors and others on fixed incomes by the Fairbanks Neighborhood Housing Services, which can help you determine if you’re eligible.

In the Anchorage area, the program is administered by the housing and human services division of the Anchorage Health Department. Contact them for eligibility guidelines.

National first-time homebuyer programs

In addition to state-specific programs, Alaskans have the advantage of being able to access a host of national programs that may help them make their homebuying dreams come true.

Programs from the federal Housing and Urban Development (HUD) Agency’s Office of Native American Programs, for example, are available for Alaska Native tribal members who can access lower down payments and flexible underwriting.

Even if you’re not a member of a federally recognized tribe, there may be help out there for you. HUD-approved agencies in Anchorage can provide pre-purchase education, financial and budget counseling and more assistance. Meanwhile, the rural nature of much of Alaska makes it eligible for several USDA rural homebuying assistance options.

To learn more about and see if you may be eligible for any of these or other national programs, visit our first-time homebuyer guide.

 

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