Alaska Closing Cost Assistance Program

What is the Alaska Closing Cost Assistance Program?

The Alaska Closing Cost Assistance Program provides eligible homebuyers with financial support to cover a portion of their closing costs, making the home purchase process more affordable.

How much assistance can I receive?

Eligible borrowers can receive up to 4% of the initial principal balance of their mortgage loan to be used toward down payment and closing costs. For example, on a $300,000 mortgage, 4% assistance equates to $12,000.

Who is eligible for this program?

Alaska residents with a minimum credit score of 640 may be eligible for the Closing Cost Assistance Program. Income limits and other criteria may apply, so it's important to verify specific eligibility requirements.

Does the assistance need to be repaid?

No, the assistance provided through this program does not require repayment, allowing homebuyers to reduce their out-of-pocket expenses without incurring additional debt.

Can this program be combined with other assistance programs?

Yes, the Closing Cost Assistance Program can be combined with other Alaska Housing Finance Corporation (AHFC) programs to further enhance affordability for homebuyers.

Are there specific property requirements?

Eligible properties typically include single-family homes, condominiums, and Type I manufactured homes. The property must be located in Alaska and serve as the borrower's primary residence.

Is homebuyer education required?

Yes, applicants are required to complete a homebuyer education course, such as HomeChoice™, to better understand the responsibilities and processes involved in purchasing and owning a home.

What is the interest rate for loans under this program?

The Closing Cost Assistance Program offers a competitive 30-year fixed interest rate. Specific rates may vary, so it's advisable to consult with an approved lender for current information.

Are there income limits for eligibility?

Yes, income limits apply and vary based on location and household size. Prospective buyers should verify the current income limits applicable to their area.

Can I use this program for refinancing an existing mortgage?

No, the Closing Cost Assistance Program is intended for the purchase of a new primary residence and cannot be used for refinancing existing mortgages.

What types of loans are compatible with this program?

The program is compatible with various loan types, including conventional fixed-rate, FHA, VA, and Rural Development loans. It's important to confirm specific eligibility with your lender.

Are there occupancy requirements?

Yes, the property must be occupied as the borrower's primary residence within a specified period after closing, ensuring the program benefits those purchasing homes for personal use.

Is there a maximum purchase price limit?

Yes, there are maximum purchase price limits that vary by area and property type. Prospective buyers should verify the current limits for their desired property's location.

How do I apply for the program?

To apply, contact an AHFC-approved lender who will guide you through the application process, including verifying eligibility, completing necessary documentation, and understanding program requirements.

Can I purchase a newly constructed home with this program?

Yes, newly constructed homes are eligible, provided they meet the program's property requirements and acquisition cost limits.

Are there any post-purchase requirements?

Homeowners must continue to occupy the property as their primary residence. Renting out the property may violate program terms and could result in penalties.

Is there a minimum borrower contribution required?

While the program provides significant assistance, borrowers may be required to contribute a minimum amount toward the purchase. Specific requirements should be confirmed with your lender.

What is the process for receiving the assistance?

The assistance is funded directly by Alaska Housing at the time of closing, reducing the amount of cash the buyer needs to bring to the closing table.

Are there any fees associated with the program?

Standard loan fees apply, but there are no additional fees specifically for participating in the Closing Cost Assistance Program.

How long does the application process take?

The timeline can vary based on individual circumstances and lender processing times. It's advisable to begin the application process early to ensure timely approval.