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Alaska House passes bill aimed at reducing down payment requirements for state-backed home mortgages

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Alaska House passes bill aimed at reducing down payment requirements for state-backed home mortgages



Housing construction is underway for a neighborhood near Sand Lake on July 5, 2023. (Matt Faubion/Alaska Public Media)

The Alaska House of Representatives passed a bill Wednesday that would allow the state’s mortgage lender to reduce the down payments necessary to qualify for state-backed loans.

Current law prohibits the Alaska Housing Finance Corporation from making loans worth more than 95% of the value of a single-family home. The bill, proposed by Gov. Mike Dunleavy, would remove that restriction. The corporation told lawmakers the change would allow its board to reduce the required down payment from 5% to 3%. That would save the median Anchorage homebuyer about $10,000 on their down payment and increase their monthly mortgage payment by about $60, according to the corporation’s estimates.

Rep. Dan Saddler, R-Eagle River and the House majority leader, said the bill would help Alaskans struggling to afford a home. The average sale price of an Alaska home rose to roughly $422,000 in 2022, up by about 15% since 2020, according to the state labor department.

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“Homeownership is the first big step towards financial security and long-term financial health for Americans and Alaskans,” Saddler said. “Inflation has made that first step a doozy.”

The Alaska Housing Finance Corporation offers loans through partner banks across the state. Reducing the required down payment would allow the state-backed housing lender to better compete with federal mortgage giants Freddie Mac and Fannie Mae, which offer several 3% down payment options. 

Rep. Genevieve Mina, R-Anchorage, said she hoped the bill would make homeownership more realistic for younger Alaskans.

“There are a lot of folks, especially in my generation, who don’t think that they’ll be able to buy a house because they can’t afford the mortgage, because they can’t afford the 20% down. That’s not the only path to homeownership, and empowering AHFC to have more assistance for all folks will be really helpful in helping to promote home buying and also to invigorate our housing market,” she said.

Though some of the Alaska Housing Finance Corporation’s programs are aimed specifically at first-time homebuyers and those with low incomes, the agency offers others aimed at the general population with broad eligibility criteria.

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The bill is one of a few efforts from Dunleavy this session aimed at lowering the cost of housing. Another, included in the governor’s capital budget, would create a down payment assistance program aimed at recent college or technical school graduates. Homeowners would have to stay in their home for five years to receive the full $20,000 in assistance.

The bill passed the House by a vote of 39-1 with only Rep. David Eastman, R-Wasilla, voting no. It now heads to the Senate.


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Eric Stone covers state government, tracking the Alaska Legislature, state policy and its impact on all Alaskans. Reach him at estone@alaskapublic.org.

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Over $150K worth of drugs seized from man in Juneau, police say

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Over 0K worth of drugs seized from man in Juneau, police say


JUNEAU, Alaska (KTUU) – An Alaska drug task force seized roughly $162,000 worth of controlled substances during an operation in Juneau Thursday, according to the Juneau Police Department.

Around 3 p.m. Thursday, investigators with the Southeast Alaska Cities Against Drugs (SEACAD) approached 50-year-old Juneau resident Jermiah Pond in the Nugget Mall parking lot while he was sitting in his car, according to JPD.

A probation search of the car revealed a container holding about 7.3 gross grams of a substance that tested presumptively positive for methamphetamine, as well as about 1.21 gross grams of a substance that tested presumptively positive for fentanyl.

As part of the investigation, investigators executed a search warrant at Pond’s residence, during which they found about 46.63 gross grams of ketamine, 293.56 gross grams of fentanyl, 25.84 gross grams of methamphetamine and 25.5 gross grams of MDMA.

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In all, it amounted to just less than a pound of drugs worth $162,500.

Investigators also seized $102,640 in cash and multiple recreational vehicles believed to be associated with the investigation.

Pond was lodged on charges of second-degree misconduct involving a controlled substance, two counts of third-degree misconduct involving a controlled substance, five counts of fourth-degree misconduct involving a substance and an outstanding felony probation warrant.

See a spelling or grammar error? Report it to web@ktuu.com

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Sand Point teen found 3 days after going missing in lake

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Sand Point teen found 3 days after going missing in lake


SAND POINT, Alaska (KTUU) – A teenage boy who was last seen Monday when the canoe he was in tipped over has been found by a dive team in a lake near Sand Point, according to a person familiar with the situation.

Alaska’s News Source confirmed with the person, who is close to the search efforts, that the dive team found 15-year-old Kaipo Kaminanga deceased Thursday in Red Cove Lake, located a short drive from the town of Sand Point on the Aleutian Island chain.

Kaminanga was last seen canoeing with three other friends on Monday when the boat tipped over.

A search and rescue operation ensued shortly after.

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Alaska Dive Search Rescue and Recovery Team posted on Facebook Thursday night that they were able to “locate and recover” Kaminanga at around 5 p.m. Thursday.

“We are glad we could bring closure to his family, friends and community,” the post said.

This is a breaking news story and will be updated when more details become available.

See a spelling or grammar error? Report it to web@ktuu.com

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Opinion: Homework for Alaska: Sales tax or income tax?

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Opinion: Homework for Alaska: Sales tax or income tax?


iStock / Getty Images

This is a tax tutorial for gubernatorial candidates, for legislators who will report to work next year and for the Alaska public.

Think of it as homework, with more than eight months to complete the assignment that is not due until the November election. The homework is intended to inform, not settle the debate over a state sales tax or state income tax — or neither, which is the preferred option for many Alaskans.

But for those Alaskans willing to consider a tax as a personal responsibility to help fund schools, roads, public safety, child care, state troopers, prisons, foster care and everything else necessary for healthy and productive lives, someday they will need to decide on a state income tax or a state sales tax after they accept the checkbook reality that oil and Permanent Fund earnings are not enough.

This homework assignment is intended to get people thinking with facts, not emotions. Electing the right candidates will be the first test.

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Alaskans have until the next election because nothing will change this year. It will take a new political alignment led by a reality-based governor to organize support in the Legislature and among the public.

But next year, maybe, with the right elected leadership, Alaskans can debate a state sales tax or personal income tax. Plus, of course, corporate taxes and oil production taxes, but those are for another school day.

One of the biggest arguments in favor of a state sales tax is that visitors would pay it. Yes, they would, but not as much as many Alaskans think.

Air travel is exempt from sales taxes. So are cruise ship tickets. That’s federal law, which means much of what tourists spend on their Alaska vacation is beyond the reach of a state sales tax.

Cutting further into potential revenues, state and federal law exempts flightseeing tours from sales tax, which is a particularly costly exemption when you think about how much visitors spend on airplane and helicopter tours.

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That leaves sales tax supporters collecting from tourists on T-shirts, gifts for grandchildren, artwork, postcards, hotels, Airbnb, car rentals and restaurant meals. Still a substantial take for taxes, but far short of total tourism spending.

An argument against a state sales tax is that more than 100 cities and boroughs already depend on local sales taxes to pay for schools and other public services. Try to imagine what a state tax piled on top of a local tax would do to kill shopping in Homer, already at 7.85%, or Kodiak, Wrangell and Cordova, all at 7%, and all the other municipalities.

Supporters of an income tax say it would share the responsibility burden with nonresidents who earn income in Alaska and then return home to spend their money.

Almost one in four workers in Alaska in 2024 were nonresidents, as reported by the state Department of Labor in January. That doesn’t include federal employees, active-duty military or self-employed people.

Nonresidents earned roughly $3.8 billion, or about 17% of every dollar covered in the report.

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However, many of those nonresident workers are lower-wage and seasonal, employed in the seafood processing and tourism industries, unlikely to pay much in income taxes. But a tax could be structured so that they pay something, which is fair.

Meanwhile, higher-wage workers in oil and gas, mining, construction and airlines (freight and passenger service) would pay taxes on their income earned in Alaska, which also is fair.

It comes down to what would direct more of the tax burden to nonresidents: a tax on income or on visitor spending. Wages or wasabi-crusted salmon dinners.

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal public policy work in Alaska and Washington, D.C. He lives in Anchorage and is publisher of the Wrangell Sentinel weekly newspaper.

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