Alaska First-Time Home Buyer Programs of 2021

NerdWallet
By NerdWallet 
Edited by Alex Richards
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Alaskans can get help from state programs when they take the leap into homeownership. The Alaska Housing Finance Corp., or AHFC, offers programs for first-time home buyers (and some repeat buyers). Three programs offer below-market interest rates, and others offer help with closing costs or to buyers of mobile homes.

Buyers may benefit, too, from nationally available mortgage programs with borrower-friendly down payment and credit score requirements. Explore options available to first-time home buyers in Alaska.

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National first-time home buyer programs

These national loan programs are offered by most lenders and are designed to help borrowers who don't have much saved for a down payment or need flexible credit standards.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

AHFC highlights and eligibility requirements

Anyone who hasn't owned a primary residence in three years is classified by Alaska as a first-time home buyer. The following AHFC programs can make homeownership more affordable for first-timers. Some programs are open to repeat buyers, too.

Highlights

  • Single-family homes, condos, common-interest community units and multi-family homes are allowed, as well as manufactured homes not permanently attached to a foundation.

  • Buyers who take AHFC's free homebuyer course, HomeChoice, get a $250 closing credit if they choose an AHFC mortgage.

  • Qualified veterans may count as first-time home buyers in some cases.

  • AHFC single-family loans are usually assumable.

Eligibility

  • Must be an Alaska resident with qualifying credit.

  • Must be current on child support payments.

  • Must occupy the property within 60 days of loan closing.

  • May have only one AHFC loan on owner-occupied property.

Alaska first-time home buyer programs

First Home Program

Best for:

Low mortgage rates

What you need to know:

The First Home plan offers mortgages with reduced interest rates for first-time buyers and qualified veterans. Purchase cost and income limits do not apply under this plan. Buyers cannot have owned a primary residence in Alaska in the past three years, and a minimum credit score of 620 is required. Loans can be used for single-family homes, duplexes and other common community units, condos and some manufactured homes. A homebuyer class is not required, but an incentive is available for taking one.

First Home Limited Program

Best for:

Low mortgage rates

What you need to know:

The First Home Limited plan offers mortgages with reduced interest rates for first-time buyers and qualified veterans. As the plan’s name suggests, purchase cost and income limits apply. Buyers cannot have owned a primary residence in Alaska in the past three years, and a minimum credit score of 620 is required. Loans can be used for single-family homes, duplexes and other common community units, condos and some manufactured homes. A homebuyer class is not required, but an incentive is available for taking one.

Interest Rate Reduction for Low-Income Borrowers option

Best for:

Low-income borrowers

What you need to know:

First-time home buyers can reduce their mortgage interest rate by 0.5% or 1%, depending on family income. As the program's name suggests, income limits apply. The interest rate reduction applies to the first $180,000 of the loan; if the mortgage is for more than that, the rate is reduced according to a formula. Borrowers must take an approved home buyer class.

Manufactured Home Program

Best for:

Manufactured homes

What you need to know:

This loan program is for mobile homes known as Type II manufactured homes, which are not attached to permanent foundations. The maximum loan amount is $175,000 when buying the land the home is on, and $100,000 when not buying land. Maximum mortgage terms vary from seven to 14 years, depending on whether the home is new or used, single-wide or double-wide. The program is available for repeat or first-time buyers. Financing is by the AHFC through approved lenders.

Closing Cost Assistance Program

Best for:

Closing cost assistance

What you need to know:

This program provides the home buyer up to 4% of the loan amount to pay for down payment, closing costs or prepaid items. The program is available to first-time or repeat buyers who get FHA, VA or USDA loans. The minimum credit score is 640, and there are no restrictions on income or home cost.

AHELP Down Payment Assistance Program

Best for:

Down-payment assistance

What you need to know:

In partnership with various agencies and nonprofits, the state’s Affordable Housing Enhanced Loan Program offers assistance with down payments and secondary financing. To be eligible, borrowers may not own other residential property in the same area. The state’s website says eligible properties may include owner-occupied single-family homes, condos and some manufacturer homes. A homebuyer class is required.

Summary: 2021 Alaska first-time home buyer programs

  • First Home and First Home Limited plans to provide first-time buyers with reduce-rate mortgages.

  • Interest Rate Reduction for Low-Income Borrowers option to reduce the interest rate on loans to low-income buyers.

  • Manufactured Home Program for mobile homes that are not permanently attached to a foundation.

  • Closing Cost Assistance Program to help with closing costs.

  • AHELP Program to provide down-payment assistance and secondary financing.

Those are the state first-time home buyer programs available in Alaska. For more information, see the AHFC website. Loan decisions are made by the agency's network of approved lenders; if you've found a program that suits you, contact a lender for more information.

Getting ready to buy a home? We’ll find you a highly rated lender in just a few minutes.

Enter your ZIP code to get started on a personalized lender match.

 

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