The Alaska Housing Finance Corp. is backing a new type of loan aimed at spurring developers to build multi-unit housing near Eielson Air Force Base.
Federal, state and North Pole area leaders are pleased about the new Military Facility Zone Loan, and they hope it encourages builders to mobilize.
The 99705 zip code has a dearth of housing, and prices are rising as the nearby air base grows and demand for housing increases.
In July, the Fairbanks North Star Borough mayor held a news conference to call attention to the housing shortage and asked builders and real estate professionals to weigh in.
“What drove the loan is the need for housing due to the huge influx of people working for the F-35s and the new tanker brigade,” said Jan Miyagishima, director of mortgage operations for the Alaska Housing Finance Corp.
The AHFC announced the new program on Friday. Miyagishima said the Military Facility Zone Loan accomplishes three things. The AHFC has agreed to purchase these loans from other lenders, filling a void. The housing finance corporation is offering a competitive interest rate — on Friday, it was 4.250% for a 30-year loan — and a lower down payment of 20% is available as opposed to 25%.
The loan is aimed at builders seeking to construct duplexes, triplexes and quad-plexes, she said.
“It allows a borrower or an investor to obtain the maximum of 10 loans under this program,” she said.
A bill that made it into law in 2012 made the new loan program possible. House Bill 316, modeled after legislation from other states, enables the Alaska Department of Military and Veterans Affairs to create military facility zones in areas with “inadequate infrastructure to support the continued or expanded operations” at a nearby military facility.
“As with most of its residential lending, AHFC will rely on its private sector banks, credit unions and mortgage companies to offer the Military Facility Zone Loan to interested Alaskans,” the corporation’s news release reads.
The new loan program sunsets June 30, 2024.
The loan program drew a chorus of praise from local, state and federal leaders in prepared statements.
“I’m glad AHFC has stepped up to help to make more housing available for people moving to the North Pole area because of the Eielson AFB expansion. I encourage anyone interested to investigate this opportunity with their local banker,” Rep. Mike Prax, R-North Pole, said.
North Pole is the first and so far only designated Military Facility Zone in Alaska “with the stated purpose of supporting the defense of our nation, servicemembers, and their families,” Borough Mayor Bryce Ward’s statement reads.
“This loan program provides investors and developers access to the much-needed capital to continue building affordable and sustainable housing to meet our community needs,” he said.
U.S. Sen. Dan Sullivan, R-Alaska, is a colonel in the U.S. Marine Corps Reserve.
“The North Pole and Fairbanks communities have always steadfastly supported the active duty military assigned to the Interior,” reads his statement. “I commend local community efforts to continue this Alaskan tradition by addressing the military’s critical need for housing as we welcome the thousands of airmen and their families who will accompany the arrival of additional F-35 and KC-135 aircraft at Eielson Air Force Base.”