Home loans in Alaska rose sharply during the first half of 2001 and continuing drops in the prime rate are expected to propel the trend well into this year.
The Alaska Housing Finance Corp. and non-AHFC lenders reported a 31 percent increase in home loans through June 2001, compared to the same period in 2000, according to a report called Project Jump Start 2002, recently issued by AHFC's Department of Planning and Program Development.
Loan volume was $338 million, up from $249 million. The average sales price of a single-family home was $170,931, an increase of 7.6 percent over 2000. Activity in the condominium market was also brisk in the first half of 2001, jumping 67 percent.
"AHFC loan activity is about the same going into 2002 as it was for the last year," said Paul Kopanski, director, mortgage operations, for AHFC. "That is good news."
AHFC found that federal regulations had imposed income limitations for borrowers and acquisition levels for property that were shutting out most Alaskans in communities outside Anchorage, particularly Juneau, Kopanski said. To deal with this, AHFC developed the Taxable First-Time Home Buyer Program, the latest version of which went into effect last August.
"In this program, you do not have the acquisition limits or income limits," Kopanski said. "The only limitation is that you cannot have owned a home in the last three years, so 'First-Time' is something of a misnomer."
"Assuming you meet the criteria, it has a preferential interest rate about 3/8 of a percent below any loan program that you would have had to go to if you did not qualify for this program," he said.
Three-eighths of a percent can be a big chunk of change over a 30-year mortgage. "This has created a lot more activity in the Juneau area," he said.
AHFC's Taxable First-Time Home Buyer Program can be accessed through approved lenders, which means that most banks and mortgage companies in Juneau can sign you up, Kopanski said.
He recommends that anyone wishing to use the program take AHFC's home buyers' education course, an eight-hour class held on two consecutive evenings. "The course is very thorough, and arms an individual with a lot of knowledge. Home buying can be very scary, and this takes the mystery out of it."
Local real estate agents have seen the results of the AHFC program and lower interest rates.
"When the interest rate dropped in October and November, we saw a real increase in home loans, especially in the first-time home buyer market," said Honey Bee Anderson, an associate broker with Powell Realty and past president of the Southeast Board of Realtors.
"That increase has somewhat depleted our inventory in that price range," she added. The active price range for a first-time home buyer who can use the AHFC Taxable First-Time Home Buyer Program where there is no limit on acquisition amount is between $150,000 to $170,000 and $200,000, she said.
Since November, the interest rate on home loans has crept up a little, "and there was a slowdown around the holiday season," Anderson said. "But right now in Juneau we are seeing a very active market in that price range." She has a list of qualified buyers waiting for single-family homes in that range, she said.
Another factor boosting home loan activity nationally as well as locally is that the Veterans Administration recently raised its acquisition amount. "It went from $203,000 to $240,000, which means that the buying power for the veteran is that much more," Anderson said.
A lender survey and AHFC loan data are included in the biannual Alaska Housing Market Indicators published by AHFC. The publication is available on the Web site, www.ahfc.state.ak.us.
Ann Chandonnet can be reached at firstname.lastname@example.org.