Alaska House passes bill aimed at reducing down payment requirements for state-backed home mortgages

A house that's under construction.
Housing construction is underway for a neighborhood near Sand Lake on July 5, 2023. (Matt Faubion/Alaska Public Media)

The Alaska House of Representatives passed a bill Wednesday that would allow the state’s mortgage lender to reduce the down payments necessary to qualify for state-backed loans.

Current law prohibits the Alaska Housing Finance Corporation from making loans worth more than 95% of the value of a single-family home. The bill, proposed by Gov. Mike Dunleavy, would remove that restriction. The corporation told lawmakers the change would allow its board to reduce the required down payment from 5% to 3%. That would save the median Anchorage homebuyer about $10,000 on their down payment and increase their monthly mortgage payment by about $60, according to the corporation’s estimates.

Rep. Dan Saddler, R-Eagle River and the House majority leader, said the bill would help Alaskans struggling to afford a home. The average sale price of an Alaska home rose to roughly $422,000 in 2022, up by about 15% since 2020, according to the state labor department.

“Homeownership is the first big step towards financial security and long-term financial health for Americans and Alaskans,” Saddler said. “Inflation has made that first step a doozy.”

The Alaska Housing Finance Corporation offers loans through partner banks across the state. Reducing the required down payment would allow the state-backed housing lender to better compete with federal mortgage giants Freddie Mac and Fannie Mae, which offer several 3% down payment options

Rep. Genevieve Mina, D-Anchorage, said she hoped the bill would make homeownership more realistic for younger Alaskans.

“There are a lot of folks, especially in my generation, who don’t think that they’ll be able to buy a house because they can’t afford the mortgage, because they can’t afford the 20% down. That’s not the only path to homeownership, and empowering AHFC to have more assistance for all folks will be really helpful in helping to promote home buying and also to invigorate our housing market,” she said.

Though some of the Alaska Housing Finance Corporation’s programs are aimed specifically at first-time homebuyers and those with low incomes, the agency offers others aimed at the general population with broad eligibility criteria.

The bill is one of a few efforts from Dunleavy this session aimed at lowering the cost of housing. Another, included in the governor’s capital budget, would create a down payment assistance program aimed at recent college or technical school graduates. Homeowners would have to stay in their home for five years to receive the full $20,000 in assistance.

The bill passed the House by a vote of 39-1 with only Rep. David Eastman, R-Wasilla, voting no. It now heads to the Senate.

Correction: A previous version of this article incorrectly listed Rep. Genevieve Mina’s party affiliation. She is a Democrat.

Eric Stone covers state government, tracking the Alaska Legislature, state policy and its impact on all Alaskans. Reach him at

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