Programs Make Home Ownership Possible for More Alaskans.

• Author: BENEDETTI, SUSAN

Barriers to affordable housing are being broken down in both urban and rural Alaska through public-private partnerships. Together, businesses, nonprofits and government agencies are doing what no single entity can do: bringing together several funding resources to design affordable mortgage loan packages for Alaskan families.

In urban areas such as Anchorage, Fairbanks and Juneau, local lenders are making housing more affordable through a combination of lower interest mortgage programs. By using a first deed of trust mortgage loan from the Alaska Housing Finance Corp.'s First Time Homebuyer Program in conjunction with interest rate reduction for low- to moderate-income borrowers, homebuyers may receive rates of up to 3 percent less than the standard mortgage rate. A "soft second" loan is added to the package. Soft seconds may offer reduced rates, a specially structured repayment plan or even forgive the loan over time. These loans are often made by government agencies, nonprofits, Native tribes or housing authorities.

Let's look at Anchorage's AnCHOR program as an example. Since 1997, the Municipality of Anchorage has provided more than $3.8 million in soft-second money to low- to moderate-income borrowers to purchase single-family homes in the designated "Renaissance Zone," which includes parts of Spenard, Muldoon, Russian Jack, Fairview and downtown Anchorage. Those who qualify are loaned up to $25,000 to help with the down payment and closing costs. Each year they live in the home (owner-occupancy), 10 percent of the second loan is forgiven. After 10 years, the entire loan is forgiven. Loans are made at zero percent interest and there are no monthly payments. If the home is sold before the 10-year period is up, the buyer pays back the unforgiven percentage of the loan from the proceeds of the sale.

During its first three years, the AnCHOR program helped more than 190 families realize the dream of home ownership. It began with a grant from the federal department of Housing and Urban Development to the Municipality of Anchorage to develop a low- to moderate-income housing program. Loans were administered by First National Bank and Anchorage Neighborhood Housing with first deeds of trust from AHFC.

Making rural Alaska housing affordable is more challenging because of problems with logistics, land titles and a lack of infrastructure. Even so, commitment and cooperation between public and private organizations can overcome even the largest...