Life in Alaska can literally pay off. When considering where to buy your first home, one of the most unique perks of living on The Last Frontier is the Permanent Fund Division, paying dividends to residents based on the state’s income from mineral fees.
You will also avoid a high tax burden due to a lack of government Income taxThis means you can spend less time looking after finances and more time enjoying what makes the state so attractive: nature.
Of course, you also need a place of retreat. According to real estate agent Redfin, Alaska homes had an average retail price of just over $ 301,000 in early 2021. If you are one First time buyer If you need help raising this type of cash, contact Alaska Housing Finance Corporation, also known as Alaska Housing. The organization’s programs work with conventional loans, FHA, VA, and USDA loans, and include low interest rates and down payment assistance to make it easier for you to afford a home.
Alaska first time buyer loan programs
Alaska Housing First Home Limited
If you haven’t owned a home in the past three years, you’re considered a first-time home buyer and Alaska Housing’s First Home Limited program can help you get a low interest rate.
- 5 percent down payment on conventional loan
- Minimum score of 620
- Must meet Alaska Housing Income limitswhich depend on the location of the property and the size of the household (limits may be higher in Target areas)
- Must read Alaska Housing brochure on home purchase and home ownership
- Can be a single family home, condominium, community unit of common interest, maisonette, or a specific prefabricated house
- Must meet Alaska Housing Purchase price limitswhich vary depending on the location and type of house
While this is not a requirement for eligibility, you should also consider the HomeChoice training course. It’s free and will save you $ 250 in closing costs.
Alaska Housing First Home
If this is your first time to buy a home in Alaska but your income exceeds the First Home Limited program limits, or you want to buy a more expensive home, the First Home program might be for you. As the name suggests, these limits are removed and you can still set a competitive interest rate.
Additional ways to save
Alaska Housing has two other options that can potentially save you additional money:
- Low income rate cut – If your income is less than 80 percent or 60 percent of the median income in the area you are buying in, you can qualify for 0.5 percent or 1 percent of your interest on the first $ 180,000 on your mortgage. These savings can add up significantly on a 30 year loan.
- Reduction of the energy efficiency rate – If you are buying a new home that exceeds Alaska Building Energy Efficiency Standards, you may be able to get a reduced interest rate on the first $ 200,000 on your mortgage. You can also qualify for price cuts when buying a used home or improving energy efficiency. Keep this in mind when comparing homes for sale. In general, energy efficiency leads to lower operating costs.
Alaska deposit assistance
Alaska Housing Closing Cost Assistance
This Alaska Housing program is called Closing Cost Assistance, but the funds can also be used towards your down payment. Depending on your credit, you can borrow between 3 and 4 percent of the home purchase price through this 30-year fixed-rate support loan. FHA, VA, or USDA loans are eligible for this program and the only requirement is a credit rating of 640 or higher.
Alaska Housing Affordable Housing Enhanced Loan Program (AHELP)
The Affordable Housing Enhanced Loan Program (AHELP) offers Advance payment assistance through a number of organizations across Alaska. Many of the support options consist of a second fixed rate mortgage, but there are also some grant options that do not have to be paid back at all. For example, the North Pacific Rim Housing Authority offers eligible Alaska Native and American Indians grants of up to $ 40,000 that can be awarded after 15 years.
It’s smart to compare them all AHELP options to see which programs are most cost effective for you.
Local homebuyer assistance programs
Depending on where you are looking to buy your first home in Alaska, you may have access to other local support options. For example, in Fairbanks, the nonprofit Fairbanks Neighborhood Housing Services has two down payment support programs for qualified shoppers who can contribute at least $ 1,000 from their own funds to purchase.
When you’re ready to do some part of the construction of a home, the Rural Alaska Community Action Program’s Mutual Self-Help Housing initiative gives low-income residents the opportunity to buy a home with no down payment for welding capital. Be willing to work at least 35 hours a week building new houses to be eligible.
Other first-time buyer loan programs
If you can’t find an Alaska State program that fits your needs, you can look for nationally available support. You can use the Bankrate guide Loans and Programs for First Time Buyers to discover other ways to make home buying more affordable.
For more home ownership programs in Alaska, including by city, see HUD.gov.
Are you ready to buy your first home on The Last Frontier? You can first determine if your income and budget are in line with Alaska Housing’s First Home Limited program, and then browse participating mortgage lenders. Note that every bank, credit union, and lender has different loan offers and terms, regardless of whether you are using a government real estate finance agency program or otherwise. it is important, that Compare mortgage rates and Calculate your estimated monthly payments This allows you to get an offer that suits your financial needs.