Expanding Affordable Homeownership Opportunities for Alaskans

Picture this: it’s May and a new homebuyer is walking through their newly constructed home. Their hand slides over the countertops, they stop to look out the window. Over the last year, they worked side-by-side with a community partner to make this new home possible for their family.

Statewide, Alaskan communities are faced with construction barriers leading to a shortage of new homes. The problem is even more apparent when it comes to affordable homes – requiring the family to pay no more than 30 percent of their gross income toward their housing.

Since 2002, Alaska Housing Finance Corporation has offered an innovative solution to help make affordable new homes possible: the Homeownership Development Program (HDP).

This initiative offers non-profits and land trusts a federally-funded grant to purchase land and assist with the costs of building affordable new homes. These homes are then re-sold at a rate lower than market value to a qualifying homebuyer.

How it works:

1. Grant to partner: AHFC provides a federally-funded grant to a community partner. The grant helps fund the costs of land acquisition and construction.
2. Construction: The community partner obtains land and/or completes construction of new homes. Homes must meet federal definitions of modest and be built to the state’s construction and energy efficiency standard. 
3. Homebuying: Upon completion of construction, the community partner sells the home to a qualified low-income homebuyer. The portion of the cost funded by AHFC is assumed by the homeowner as a zero-interest, partially forgivable HDP loan, with the homeowner funding the remaining cost through a traditional mortgage.​​​​​​​
4. Homeownership: $2,000 of the HDP loan is forgiven each year the homeowner lives in the home, up to $10,000.  The remainder of the HDP loan never accrues interest and does not need to be repaid until the re-sale of the property or when the home is no longer the owner’s primary residence.

Since the Homeownership Development Program helps offset expensive land and construction costs, the community partner can re-sell below market-value, offering qualifying homebuyers the ability to take out a smaller loan and have an affordable mortgage payment.  

New Horizons: Sitka, Kodiak, Seward

Since AHFC began offering the program, the Homeownership Development Program has offset the cost of hundreds of new homes in the Mat-Su Valley, Kenai and Soldotna. Each of these homes was the start of a new Alaska homeownership story for a homebuyer who gets to turn the key in the lock of their new home.

The 2025 funding cycle expands the program to three new communities, with funding planned for community partners in Sitka, Seward and Kodiak – as well as developments in Wasilla.

• Kodiak – Rural Alaska Community Action Program, Inc. (RurAL CAP) - 10 new single-family homes
• Seward - Rural Alaska Community Action Program, Inc. (RurAL CAP) - 10 new single-family homes
• Sitka - Sitka Community Land Trust - 1 new single-family home on Sitka Community Land Trust property
• Wasilla – Alaska Community Development Corporation - 10 new single-family homes

The AHFC Mission

The Homeownership Development Program is one of a series of Alaska Housing efforts to boost new home construction statewide. Learn about other opportunities such as the New Home Construction Rebate or partner grants like Greater Opportunities for Affordable Living.

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