Buying your first home and living in Alaska can pay off — literally. One of the state’s most unique perks is its Permanent Fund Division, which pays dividends to residents based on the state’s earnings from mineral royalties. You’ll also avoid some tax liability thanks to a lack of state income tax. Consider turning to the Alaska Housing Finance Corporation (AHFC), which offers first-time homebuyer programs that work alongside conventional, FHA, VA and USDA loans, and include low interest rates and down payment assistance.
Alaska first-time homebuyer loan programs
Alaska Housing First Home Limited
If you haven’t owned a home in the last three years, you’re considered a first-time homebuyer, and Alaska Housing’s First Home Limited program can help you score a low interest rate with a conventional, FHA, VA or USDA mortgage.
Alaska Housing First Home
If you’re a first-time homebuyer in Alaska but your income exceeds the First Home Limited program limits, or you’re looking to purchase a more expensive home, the First Home program might be the right fit for you. As its name implies, it eliminates those limits while still allowing you to lock in a competitive interest rate.
Additional Alaska Housing help
Beyond mortgage loan programs, Alaska Housing offers other opportunities to save when you buy your first home, including:
- Energy Efficiency Rate Reduction: If you purchase a new home that exceeds the Alaska Building Energy Efficiency Standards, you might be able to get a reduced interest rate on the first $250,000 of your mortgage. You might also qualify for rate reductions if you’re buying a preowned home, or making energy-efficiency improvements to one.
- Low-income and veteran interest rate reductions: If your income falls under 80 percent or 60 percent of the median income in the area where you’re buying, you could qualify for either a 0.5 percent or 1 percent, respectively, discount on your interest rate on the first $180,000 of your mortgage. Likewise, if you’re an eligible veteran, you could qualify for 1 percent off your rate on the first $50,000 of your mortgage.
- New Home Construction Rebate: If you’re building a home or buying a newly-built home that meets energy efficiency standards, you could be eligible for a $10,000 rebate.
Alaska down payment assistance and grants
Alaska Housing Affordable Housing Enhanced Loan Program (AHELP)
In addition to the above mortgage programs, Alaska Housing facilitates the Affordable Housing Enhanced Loan Program (AHELP) that offers down payment assistance via a number of organizations throughout the state. These organizations serve the Anchorage, Southcentral, Fairbanks and Southeast areas.
Many of the assistance options come in the form of a second mortgage with a fixed interest rate, but there are also some grant options that you don’t need to repay at all.
The general requirements are largely similar to those of the agency’s mortgages, with the additional requirements of a homebuyer education course and an inspection on homes 10 years or older. There might also be requirements imposed by the organization offering the assistance.
Note that this assistance is subject to availability of funds.
Homebuyer assistance programs in Alaska cities
Depending on where you’re looking to buy your first home in Alaska, you might have access to other local assistance options.
RurAL Alaska Community Action Program’s Mutual Self-Help Housing Initiative
If you’re willing to do some of the work of building a home, the RurAL Alaska Community Action Program’s Mutual Self-Help Housing initiative offers low-income, rural Alaskan residents the opportunity to buy a home with no-down payment USDA loan in exchange for sweat equity. You’ll work with other program participants to build multiple homes.
Get started
Now that you know some options available to first-time homebuyers in Alaska, your next steps might include:
- Learn more about the Alaska housing market. From typical home prices to average selling times, we’ve compiled everything you need to know about housing in the state here.
- Work on or maintain your credit score. It’s the most important factor in determining your mortgage rate. Here are our top tips.
- Compare lenders and Alaska mortgage rates. Alaska Housing has a network of mortgage lenders and brokers to help you narrow down your choices. Regardless of which program you choose, it’s important to shop around for mortgage offers. Interest rates are always changing, so if you find a rate that’s especially competitive, be sure to lock it in.
- Look at lender reviews. We’ve reviewed dozens of lenders in areas like affordability and borrower experience. Explore our reviews here.
- Think about homeowners insurance. You can’t get a mortgage without a homeowners policy. Compare insurance providers in Alaska here.
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