New Home Opportunity Program Introduced in Alaska
The Alaska Community Development Corporation has identified a significant barrier to homeownership: many potential homebuyers, while able to afford monthly mortgage payments, lack the necessary funds for a down payment. To address this challenge, the Home Opportunity Program (HOP) was established, aiming to assist individuals in overcoming the renter’s trap and transitioning into homeownership.
Available Assistance: The Home Opportunity Program offers financial aid in the form of a zero-interest loan. Notably, the first $10,000 of this loan is conditionally forgivable over five years, provided the homebuyer continues to own and occupy the purchased property for the required “period of affordability.” If the homebuyer fails to meet this condition, the funds must be repaid. The loan is secured by a Note and Deed of Trust executed by the homebuyer. Any portion of the loan that is not forgiven is held as a no-interest loan, which must be repaid if the home is sold or refinanced. Due to limited funding, HOP assistance is available on a first-come, first-served basis. Additionally, eligible applicants can receive up to $3,000 in closing cost assistance and a buy-down of the first mortgage, if necessary.
Eligibility Requirements: To qualify for the Home Opportunity Program, applicants must fulfill certain criteria. The program is open only to first-time homebuyers. Eligibility is limited to low-income families, defined as those with an annual household income less than 80 percent of the area median income, as adjusted by HUD. Furthermore, all homebuyers are required to attend a homebuyer education class approved by the Alaska Housing Finance Corporation (AHFC). Applicants must also be current on any child support obligations.
Property Guidelines: Properties purchased with HOP funds must be the applicant’s primary residence and adhere to specific property standards. Homes built before 1978 are subject to a visual assessment for lead-based paint and may require stabilization if lead is present. The properties must be non-luxury and fall within the program’s purchase price limits, which vary by area:
- Mat-Su Borough: $234,000
- Kenai Peninsula: $219,000
- Glennallen, Valdez, Cordova: $202,000
- Haines Borough: $197,000
- Ketchikan: $247,000
- Petersburg: $184,000
- Wrangell: $183,000
- Sitka: $330,000
- Kodiak: $275,000
- Juneau: $323,000
In summary, the Home Opportunity Program by the Alaska Community Development Corporation is a crucial initiative designed to facilitate homeownership for low-income, first-time homebuyers in Alaska. By providing zero-interest loans with a forgivable component, closing cost assistance, and mortgage buy-downs, HOP addresses the financial hurdles that prevent many from owning a home. The program’s focus on education and adherence to property standards ensures responsible and sustainable homeownership.
