If you’re an avid seafood lover, national park enthusiast, or just enjoy whale watching in your free time, you’d be right at home in the great state of Alaska. But when you begin searching for your dream home in The Last Frontier, the financial outlook can be overwhelming.
First-time homebuyers may be hesitant to purchase a new place after evaluating the financials and crunching preliminary numbers. Fortunately, there are statewide programs available to assist with the financial undertaking.
Who Qualifies as a First-Time Homebuyer in Alaska?
In Alaska, any individual who has not owned a primary residence within the previous three years is officially considered a first-time homebuyer.
Qualified veterans may also be eligible for some statewide programs. Some of the programs outlined in this article apply to both first-timers and repeat buyers, and those will be noted.
Statewide First-Time Buyer Programs
Alaska Housing Finance Corporation (AHFC), also referred to as Alaska Housing, provides two types of loans for first-time buyers: First Home Limited and First Home.
First Home Limited
First Home Limited provides eligible borrowers with lower interest rates on their first home buying experience. Applicants must meet strict eligibility requirements including maximum income and acquisition cost limits, and will be required to submit copies of federal income tax returns for the previous three years.
Borrowers must be first-time homebuyers (as defined above), a qualified veteran, or have previously owned a home within a targeted area census tract. More information, including qualifying income limits, can be found on the AHFC website.
First Home, while also offered by AHFC, differs from First Home Limited in several ways. First, there are no maximum income limits nor limits to acquisition cost. For homebuyers whose income exceeds the First Home Limited maximum or those who seek a property with a slightly higher cost, this opportunity may be a perfect fit.
This program is limited to first-time homebuyers, and applicants are still required to submit three years of federal income tax returns as part of the application process. More information on both the First Home Limited and First Home programs can be found on the Alaska Housing website.
Interest Rate Reduction for Low-Income Borrowers
Alaska Housing’s Interest Rate Reduction for Low-Income Borrowers (IRRLIB) offers subsidized interest rates to qualifying low-income homebuyers, dependent upon demonstrated need, income level, and family size. Reductions of up to 1 percent are available for qualified borrowers. Any interest rate reduction granted will apply to the first $180,000 of the loan amount, and any amount exceeding $180,000 will receive a blended interest rate. Participation in an approved homebuyer education class is also required.
Statewide Non-First-Time Buyer Programs
While the above programs are restricted to first-time homebuyers, there are other statewide programs to assist experienced homeowners who are planning to move to a new residence.
Affordable Housing Enhanced
Alaska Housing’s Affordable Housing Enhanced Loan program (AHELP) is made possible by the partnership of Alaska Housing and many other agencies to promote accessibility through affordable home ownership for low to moderate income families.
Qualified borrowers may be eligible for secondary financing or down payment assistance in the form of grants, deferred payment options, a forgivable loan, or any combination of these. This assistance may come from a governmental agency, nonprofit organization, or regional housing authority; and each provider sets their own requirements.
Energy Efficiency Rate Reduction
Any property that can be energy rated and is otherwise eligible for Alaska Housing financing may qualify for the Energy Efficiency Rate Reduction program. This program is perfect for those investing in an energy efficient home, or those making energy improvements to a current home.
The percentage rate reduction is dependent upon whether or not the residence has access to natural gas. Check out the full list of energy ratings and the process to qualify for an interest rate reduction on the Alaska Housing Energy Efficiency webpage.
State Veterans Interest Rate Preference
Alaska Housing offers qualified veterans a 1 percent interest rate reduction applied to the first $50,000 of their mortgage loan. State Veterans Interest Rate Preference is available for honorably discharged state vets. Members on active duty are not eligible and veterans must submit authentication to the lender, such as a DD-214 and VA Certificate of Eligibility. Borrowers may not exceed State Veteran income limits.
Closing Cost Assistance Program
Alaska Housing offers a Closing Cost Assistance loan with a competitive 30-year fixed interest rate for eligible homebuyers. Alaska residents with a minimum credit score of 640 may be eligible to receive up to 4 percent of the initial principal balance of the mortgage loan to be used toward a down payment and closing costs. Income limits, acquisition cost maximums, or first-time buyer requirements do not apply.
Home Opportunity Program
The Home Opportunity Program (HOP) provides assistance to low-income households in Alaska by offering zero interest rate loans with up to $10,000 forgivable over a 5-year period. Qualified applicants may be eligible to receive down payment and/or closing cost assistance. There are strict parameters regarding eligibility determined primarily by regionally adjusted income limits and the HOP supported home must be the buyer’s only and primary residence.
Homebuyer Programs by Location
Additionally, there are homebuyer assistance programs that are region-specific. Many are open to both first-time homebuyers and repeat buyers. See each individual program for more details.
Anchorage, the largest city in the largest U.S. state, is a very popular place to settle in. Residents of the Anchorage Borough, Kenai Peninsula Borough or the Matanuska-Susitna Borough may be eligible for financial assistance on their mortgage through Cook Inlet Lending Center. The Down Payment Assistance Loan program provides eligible borrowers with loan amounts not to exceed 20 percent of the purchase price, up to $60,000 maximum. The loan is considered a second mortgage and is offered at a fixed interest rate over a 30-year term.
If you plan to settle down in the northern region among the Alaskan wilderness while also absorbing the state’s beautiful culture, look no further than Fairbanks. The Fairbanks Neighborhood Housing Services offers two opportunities for homebuyers: the HOME Opportunity Program and the LTS 2nd Mortgage Program.
The Fairbanks Neighborhood HOME Opportunity Program is offered primarily to lower-income, first-time homebuyers as a down payment and closing cost assistance program. To be considered eligible, applicants must be a resident of Alaska and not be delinquent in any child support payments. The purchased property must be located in Fairbanks North Star Borough and intended to be the buyer’s primary residence. Total household income must not exceed 80 percent of the area’s median income.
The LTS 2nd Mortgage Program allows eligible homebuyers to borrow funds for their down payment. The applicant must intend to occupy the home as their primary residence and total household annual income may not exceed 120 percent of the area’s median income. More specifications can be found in the online eligibility requirements.
The Tlingit Haida Regional Housing Authority (THRHA) may provide up to $20,000 in a loan to be used for down payment and/or closing costs to qualifying first-time homebuyers with demonstrated need. Qualified applicants will have an annual income of 80 percent or less than the median family income for the area of residence. At least one family member must be an enrolled tribal citizen. More information, including the regional specifications and requirements, can be found on the program’s webpage.
The Last Frontier is Calling
Making the leap into home ownership can be stressful, but it’s also incredibly rewarding! First-time home buying incentives often vary by state and can provide invaluable assistance to homeowners. When you’ve decided where you’re moving to, take advantage of these opportunities to ease financial stressors and settle in to your new dream home.
Visit our website and follow us on social media for more home-buying information!The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.