Alaska First-Time Home Buyer | 2022 Programs and Grants – The Mortgage Reports - 24line

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الجمعة، 22 يوليو 2022

Alaska First-Time Home Buyer | 2022 Programs and Grants – The Mortgage Reports

What to know about buying a house in Alaska

Recent home prices in Alaska are actually below the nationwide average, which is good news for first-time home buyers in the state. On top of that, Alaska can offer special mortgages with low interest rates, as well as down payment and closing cost assistance to help you buy a home more affordably. Here’s how to get started.


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Alaska home buyer overview

The median home price in Alaska was $371,200 in June 2022, according to Redfin. That was up 5.2% year-over-year.

Although Alaska is known to have high home prices, its median was actually well below the nationwide average in mid-2022. According to Redfin, the median home price in the U.S. was $428,380 in June, which represented an increase of 11.2% from the year before.

So home prices in Alaska are actually a bit lower on average and growing more slowly than in many other parts of the nation.

Alaska home buyer stats

Average Home Sale Price in AK $371,200
Minimum Down Payment in AK (3%) $11,140
20% Down Payment in AK $74,240
Average Credit Score in AK1 717
Maximum AK Home Buyer Grant2 Up to 20% of the purchase price
as repayable loan in some locations

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Alaska

If you’re a first-time home buyer in Alaska with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans, active military members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
  • USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • Alaska Finance Housing Corporation loan: May include low mortgage rates and down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Alaska first-time home buyer programs

The Alaska Finance Housing Corporation (AFHC) offers first-time home buyers special mortgages with low interest rates. Click that link for more details, including help for low-income borrowers. You may also be in line for down payment assistance, which we’ll cover in the next section.

In order to qualify for any of those, you’ll need an income that’s below local household income limits. If you’re buying in a targeted area (a census tract designated for extra assistance), your income may be higher, as shown on this list. And the home you’re buying has to be below a specified price that varies by area. You can check purchase price limits here.

If you want to use one of these mortgages, you’ll have to choose your lender from a list of mortgage companies approved by the AFHC. The lender will tell you whether you’re eligible, answer your initial questions, and help you through the application process.

Alaska first-time home buyer grants

The AFHC provides down payment assistance to many Alaska first-time home buyers. But it’s pretty vague on its website about the program details.

It says, “The assistance may be a grant, deferred payment(s), a forgivable loan, or a combination of these options and may come from a local, state or federal governmental agency, nonprofit agency, or regional housing authority. Borrowers must meet the provider’s requirements.”

To learn how much assistance is available, what form it will take, and whether or not you’re eligible, choose one of the lenders on the AFHC’s list and reach out for more information.

You may also be able to get help with your closing costs if you’re applying for a government-backed mortgage (FHA, VA, or USDA). If you qualify, you can borrow 3% or 4% of your mortgage balance. But, again, some of the details about repayment and terms are vague. So you should contact an approved lender to learn more.

If you’re an Alaska Native or Native American, be sure to check the list of organizations that might be able to help you. You’ll find it further down this webpage.

Buying a home in Alaska’s major cities

Juneau is the most costly of Alaska’s three biggest cities for homebuyers. Anchorage comes in second and Fairbanks third. But, over the 12 months ending in May 2022, home prices rose much more quickly in Fairbanks than in either of the others.

Anchorage first-time home buyers

The median list price in Anchorage was $380,000 in June 2022, according to Realtor.com. That was up 8.6% year over year.

At that median price, your down payment options might fall between:

  • $11,400 for 3% down payment
  • $76,000 for 20% down payment

The city of Anchorage doesn’t appear to have its own down payment assistance (DPA) program. But Anchorage Borough does seem to be covered by the Cook Inlet Lending Center’s program, which is a social enterprise of the Cook Inlet Housing Authority.

Under this program, you may be able to borrow up to 20% of your next home’s purchase price (capped at $60,000) toward your down payment. Putting 20% down could save you from ever having to pay private mortgage insurance. And it will reduce your loan amount, which means smaller monthly mortgage payments over the life of the loan.

When we visited the website in June 2022, it said: “The DPA Loan currently offered has a 4% fixed interest rate over a 30-year term with an Annual Percentage Rate (APR) of 4.083%. Interest rates are subject to change.” You should check to see current rates before you apply.

To be eligible, you must have a household income below certain caps, which vary by household size. If you don’t qualify on those or other grounds, explore the Alaska Finance Housing Corporation’s DPA offering. Cook Inlet uses the same list of approved lenders as the AFHC (link to list above), and you should raise any queries with one of those. But explore the website first. It includes a lot of information, including further terms and conditions.

Juneau first-time home buyers

The median list price in Juneau was $454,000 in June 2022, according to Realtor.com. That was up 17.9% year over year.

At that median price, your down payment options might fall between:

  • $13,620 for 3% down payment
  • $90,800 for 20% down payment

We couldn’t find a down payment program (besides that of the Alaska Finance Housing Corporation) when we checked the housing page on the Juneau Economic Development Council’s website. But you could call (907) 523-2300 to check. If no local program exists, you can still apply for the AFHC’s DPA program.

Fairbanks first-time home buyers

The median list price in Fairbanks was $315,000 in June 2022, according to Realtor.com. That was up 21.2% year over year.

At that median price, your down payment options might fall between:

  • $9,450 for 3% down payment
  • $63,000 for 20% down payment

Fairbanks Neighborhood Housing Services has two down payment assistance programs:

Be sure to read the eligibility criteria carefully at those links. And contact one of the approved lenders on the Alaska Finance Housing Corporation’s list (link above) to talk things through.

Where to find home buying help in Alaska

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Alaska or their local area.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists of statewide and regional resources:

Statewide Alaska first-time home buyer programs

Alaska home buyer programs by city/town

Housing opportunities for Alaska Native/Native American families across the state (regional housing authorities):

What are today’s mortgage rates in Alaska?

You can see today’s live mortgage rates in Alaska here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

1Source: Experian.com 2022 study of 2021 data

2Based on a review of the state’s available DPA grants at the time this was written

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.



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