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.
Advertisement
“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.
Advertisement
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.
Advertisement
Advertisement
Eric Stone covers state government, tracking the Alaska Legislature, state policy and its impact on all Alaskans. Reach him at estone@alaskapublic.org.
JUNEAU, Alaska (KTUU) – The Supreme Court of Alaska will be taking up the case of the State of Alaska, Division of Elections v. Daniel J. Sullivan, Jr.
The oral arguments will be held Monday at 10 a.m. via Zoom, according to an order and opening notice.
The document also specifies that a decision is expected to be made before noon on Tuesday.
According to documents from the Division of Elections, the state must start printing ballots at noon on the same day.
Advertisement
This comes after an Anchorage Superior Court Judge ordered Dan J. Sullivan on to the ballot Friday.
See a spelling or grammar error? Report it to web@ktuu.com
A new home under construction in Potter Valley in Anchorage. (Loren Holmes / ADN)
This June, two very different offers reach Alaska families, and both amount to the same thing: $10,000. The difference is everything.
Bill Walker, running for governor, would hand every eligible Alaskan a one-time $10,000 check and then end the Permanent Fund dividend for good. Ask one question: Where does his $10,000 come from?
It comes from the Permanent Fund, the people’s own money and the savings Alaskans built for their children. Walker would spend that endowment once to pay Alaskans to give up the yearly dividend forever.
Think about what that does. It cancels the annual check that gives a family a reason to keep an Alaska address and replaces it with a single payout. You hand people their own savings, call it a gift and cut the tie that held them here in the same motion. It is the oldest mistake in governing money: raid what you have saved to buy a moment’s applause and call the spending generosity.
Advertisement
A plan that spends the people’s savings to send the people away is not bold. It is foolish.
Now consider the other $10,000. Through Alaska Housing Finance Corp., the state offers families up to $10,000 to build a new, energy-efficient home. AHFC raids nothing. It earns its own way. Over the years, it has returned more than $2 billion to the state treasury, and it spends some of that income the way any good business does: to win a customer.
Here, the customer is an Alaskan who wants to own a home, put down roots and stay.
That is the oldest sound move in business: Invest a little of what you earn to bring in someone who stays. The homeowner remains, the community gains a family and the corporation keeps earning. The money spent comes back. A plan that puts earnings to work to bring people home is not charity. It is clever.
Same amount. Opposite source. Opposite wisdom. One spends savings; the other spends earnings. One pays Alaskans to leave; the other pays them to stay. One empties the state; the other fills it.
Advertisement
This Homeownership Month, the choice is the size of a single check, and the whole question is where the check comes from and what it asks of you. Ten thousand dollars of your own fund, to wave you goodbye. Or $10,000, earned and reinvested, to help you stay and build.
Evan Swensen is the publisher of Publication Consultants in Anchorage and the author of “What’s the Money For: A Permanent Fund Mortgage Proposal.”
• • •
The Anchorage Daily News welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.
