Alaska residents know that there are a lot of special considerations and unique circumstances that come with living in their state. For example you have the rough weather, a fragile environment, and the reality of being isolated from the rest of the country most of the time. But something that Alaskans deal with which is not unique to their state is the difficulty first home buyers have in securing a mortgage. Fortunately, the state of Alaska and many of her municipalities have 1st time home buyer programs available to help.
The Alaska Housing Financing Corporation
The AHFC is a state agency whose mission is to "provide Alaskans access to safe, quality, affordable housing," according to the agency's literature. The AHFC exists to provide Alaska residents not only with help in purchasing a home, but also grants and other financing for repair or rehabilitation of existing homes. Where financial assistance to homebuyers is concerned, HFC provides three different loan programs.
1. Single Family Loan Program
The Single Family Loan Program provides low-cost loans for first-time purchases, second mortgages, refinancing, and rehabilitation needs for single-family dwellings. Owners do not have to be an occupant of the home in order to qualify.
2. Single Family Loan Options Program
The Single-Family Loan Options program works in conjunction with a standard home loan to help with a variety of things. Borrowers can choose to use the money toward closing costs, downpayment, or to reduce the interest rate on the mortgage. The options only apply to single family homes and have some restrictions.
3. Multi-Family Loan Programs
Multi-family loan programs are a group of several different loans designed for buyers of multi-family units, containing five or more, or special needs housing. These programs are for very specific needs and come with a lot of special requirements.
These three programs can be utilized by either first-time home buyers or repeat buyers. However, AHFC does have two specific programs that can only be accessed by first-time buyers. They are known as the Tax Exempt and Taxable First-Time Home Buyer Programs. Details of these programs are not readily available on the agency's website, but they do recommend that residents consult their lending institution to find out more.
Other Programs for 1st Home Buyers
For indigenous Alaskans the state offers a special payment assistance program known as the Alaska Interior Regional Housing Authority Tribal Equity Advantage Program (TEAM). With this program indigenous people who can verify tribal affiliation may be eligible to receive a certain amount of money to apply as a down payment on their first home.
The application requires interested home buyers to list the names of everyone who will be living with them, provide verification of tribal affiliation, and sign a statement indicating the home buyer will be the occupant of the home. Applicants must also have 3% of the total purchase price available to contribute to the down payment at the time of closing.
For those living in the Fairbanks area, downpayment assistance is available through the Fairbanks Neighborhood Housing Services, Inc. Homebuyer Purchase Loan Program (HPLP). Like similar downpayment assistance programs in other cities, this one is aimed at urging home ownership within the city limits of Fairbanks. Applicants must meet a certain set of requirements defining what a first time home buyer is, as well as income and residency requirements, before the assistance is given.
Federal Programs for Home Buyers in Alaska
Despite what you may read on the Internet or see on late-night television, the federal government is not involved in the housing grant business. Because this myth is prevalent, the government has placed on its official grant website an announcement in large, bold lettering explaining they do not offer any federal housing grants.
Now and again Alaska may offer individual grants targeted at specific groups of people or geographic locations, which is funded through a federal grant. In such cases the money is given to Alaska as a block grant and the state has chosen to use it for housing purposes.
In talking with your real estate agent or doing your own Internet search, you may come across individual city programs or down payment assistance offers from non-profit organizations. Generally these programs are very advantageous to first-time home buyers, but individuals must be aware of what it is they are getting into before signing on the dotted line.
For example, many city programs require residents to be the primary occupant of the house for as long as 10 years. Many rehab grants work the same way. Where non-profits are concerned, some of their assistance can be used freely while others are limited by FHA loans. Regardless, you'll have to check with your real estate broker and your lender to figure out what are the best options for you.