Alaska is well known for its diverse wildlife and gorgeous landscapes. Rising housing prices may create difficulty for potential homeowners looking to buy in Alaska, however. Luckily, local and national programs exist that offer down payment assistance and grants to qualified applicants. The Alaska Housing Finance Corporation, Alaska Community Development Corporation and the Tlingit Haida Regional Housing Authority are some organizations that offer such programs.
If you're thinking about purchasing a home in Alaska, you may have options to help with the down payment or closing costs. Click on any program below to learn more and see if it can help with your home purchase!
AHELP, or the Affordable Housing Enhanced Loan Program, is offered through the Alaska Housing Finance Corporation in combination with other governmental or nonprofit agencies as well as regional housing authorities. It provides down payment assistance and secondary financing options to eligible applicants.
The assistance that is offered can be either a loan, a forgivable loan, a deferred payment loan, a grant, or a combination of these.
Applicants must match the requirements of the provider of the assistance (either a governmental agency, nonprofit, or regional housing authority), as well as a set of universal AHELP requirements. These requirements include finishing a homebuyer education course as well as not owning a secondary residential property in the nearby area.
In order for a property to qualify for AHELP, it must be an owner-occupied single-family house, condominium, unit in a Common Interest Community, or a Type I manufactured home. If the house was constructed before 1992, it must also be inspected.
The Cook Inlet DPA program is for qualified individuals in the Cook Inlet region. Assistance is offered in the form 30-year second mortgage loan for up to 20% of the purchase price of the property (but no more than $60,000). As of April 3, 2020, the interest rate for this loan is 4% (4.083% APR), but interest rates are subject to change.
Eligible applicants must have a minimum credit score of 640, a maximum first mortgage debt-to-income ratio of 30%, and a maximum total debt-to-income ratio of 40%. Further, all applicants must have a minimum of 2 months of “reserves” in their savings after closing. Reserves include funds to cover principal, interest, taxes, and insurance for the mortgage payment. Applicants also cannot have had a foreclosure or bankruptcy in the last 6 years. Applicants must meet the following annual household income limits (as of 2020):
2 person household: $81,600
3 person household: $91,800
4 person household: $102,000
5 person household: $110,175
6 person household: $118,350
7 person household: $126,525
8 person household: $134,700
Eligible properties must be a single-family house that serves as the homebuyer’s primary residence. The property must be located in Anchorage Borough, Kenai Peninsula Borough or the Matanuska-Susitna Borough.
The Home Opportunity Program (HOP) was developed by the Alaska Community Development Corporation for low-income first-time homebuyers. HOP offers three types of assistance: down payment assistance, closing cost assistance, and a buy down of the first mortgage. Borrowers can receive up to $3,000 in closing cost assistance and up to $20,000 or $30,000 (for select households below 60% of the median area income) in total assistance.
Assistance is offered in the form of a 0% loan. Up to $10,000 of this loan is forgivable under certain conditions.
Interested applicants must be working with one of HOP’s participating lenders, which include Academy Mortgage, Cornerstone Home Lending, First National Bank of Alaska, Alaska USA Mortgage Company, Residential Mortgage, Summit Mortgage, Preferred Mortgage, Kodiak Island Housing Authority, Homestate Mortgage, Denali Federal Credit Union, First Bank, True North FCU, NeighborWorks Alaska and USDA Rural Development.
Applicants must also meet certain income limits, which depends on their location and number of members in their household. Further, applicants must finish a homebuying education course and not have any unpaid child support payments. Properties that qualify for HOP include those described as non-luxury. Houses built prior to 1978 will require an assessment and possibly lead-based paint testing and correction.
Funding for HOP is finite and assistance is offered in the order that eligible applicants are received.
The Tlingit Haida Regional Housing Authority (THRHA) Down Payment Assistance Program is meant to help income-eligible Native Americans or Alaskan Natives with down payment and closing costs. As much as $20,000 is offered in the form of a second mortgage with a ten-year term and a 5% fixed rate.
For the first five years of the loan, payment is deferred and 10% of the loan is forgiven for each year that the house serves as the applicant’s primary residence. After the first five years, payments will need to be made for the duration of the loan term until the remaining balance has been paid off. The full amount will become due if the house is sold before the 10-year term.
Applicants must pay a 1.5% loan origination fee as well as a $50 processing fee. In addition to being Native Americans or Alaskan Natives, eligible applicants must also be first-time homebuyers, live in the southeastern part of Alaska, and have an annual household income that’s not more than 80% of the area median income. Individuals will also have to finish a homebuyer education course and show that THRHA funds are necessary to be qualified for a bank loan.
Houses purchased using the THRHA DPA program cannot have a purchase price of more than $300,000, cannot be a mobile home, and must be the applicant’s primary residence.