A new mortgage relief program has the potential to help a substantial number of homeowners in Alaska, although the amount of relief per household might not be that substantial.
The Alaska Housing Finance Corporation is getting ready to distribute $50 million in federal funding from the American Rescue Plan Act to qualified Alaskan homeowners. It can be spent on mortgage payments, property taxes, insurance premiums, homeowner association dues, even utilities. Payments will be made to mortgage holders, taxing authorities or utility companies, rather than to homeowners.
The income limits to qualify are generous — going up to 150 percent of area median income. In most places in the state, that’s over $100,000 a year for a household — potentially more for families in urban areas. You need to have a demonstrated risk of housing instability, but it’s not just for people who have missed mortgage payments.
“The one thing we wanted to do is not penalize the people that did the right thing and gave up Disneyworld, gave up Hawaii, so that they could make their mortgage payment. So just because you are current does not mean you don’t qualify. We’re trying to keep people making their payments, not get them to start going delinquent right now so that they could qualify," said Jan Miyagishima, director of mortgage services for AHFC, speaking at a Kenai-Soldotna Chamber of Commerce meeting Wednesday.
There are other restrictions. You need to live in your home as your primary residence, but "home" can mean a house, condo, mobile home or even a multi-family property with up to four units, as long as you live in one of them. You also need to have suffered some sort of financial hardship because of the pandemic. Miyagishima said the program is meant to help as many people as possible but only those who need it.
“When you put this much money on the streets, people think of a lot of ways to get it,” Miyagishima said.
The downside of the generous income eligibility criteria is the more homeowners who qualify, the less money to go around.
“We are right now in the eligibility period. … So we don’t know how many people are going to apply. When we see how many numbers, we’ll know about how much we have to help each person,” Miyagishima said.
AHFC reports there are about 320,000 housing units in the state. About 163,000 are owner-occupied. The majority of those own their homes outright. Only about 99,000 have a mortgage. Miyagishima said she would not be surprised to see many of those mortgage holders seeking help from the new program.
“So as of the first two days … 3,000 people are already in there,” she said.
AHFC has also been administering a rental assistance program through federal COVID-releif funds. Alaska got $300 million for rental relief in the American Rescue Plan Act and has distributed more than $242 million so far. The homeowners relief program took longer to roll out.
“COVID has gone on so long now and it took so long to get this money out. And part of that was this is a Treasury program. They’ve tried to think of everything and so they told us, ' You need to have your application in by the end of August' but they didn’t have the portal up, nobody could apply. So it’s just been a while,” Miyagishima said.
The eligibility period opened Monday. Homeowners can enter their information now on the AHCF website to see if they qualify for assistance. The application window is open March 14 to April 4. Anyone who goes through the preapproval process will have their information rollover into an application. The website is alaskahousingrelief.org.
