The Home Opportunity Program (HOP) promotes homeownership for low-income households in Alaska. Alaska Community Development Corporation operates the program on the Kenai Peninsula, the Mat-Su Borough, Glennallen, Valdez, Cordova, Juneau, Haines, Ketchikan, Petersburg, Wrangell, Sitka and Kodiak.
Individuals and families who have an annual income that is below established income guidelines (see below) and do not own another home can participate in this program. The HOP assisted home must be the only home the buyer’s own and it must be their primary residence.
Applicants who qualify can receive down payment assistance (if required by primary lender); up to $3,000 in closing cost assistance; and if necessary to achieve affordability, a buy-down of the first mortgage (see loan limits).
The HOP homebuyer assistance provides zero interest rate loans to low-income homebuyers with up to $10,000 forgivable over a five-year period. HOP funds are provided to assist homebuyers to purchase and occupy their own home. Applicants who qualify can receive down payment assistance; closing cost assistance; and if necessary, a buy-down of the first mortgage.
Participation with a lending institution that offers mortgage loans is required. The lending institution is solely responsible for approving or denying the primary mortgage loan. The applicant should contact a lending institution for qualifications for home purchase and to determine the amount of the primary loan that they quality for.
Current participating lenders with the HOP program are: Academy Mortgage, Cornerstone Home Lending, First National Bank of Alaska, Alaska USA Mortgage Company, Residential Mortgage (includes Summit Mortgage and Preferred Mortgage), Kodiak Island Housing Authority, Homestate Mortgage, Denali Federal Credit Union, First Bank, True North FCU, NeighborWorks Alaska and USDA Rural Development. Other interested lenders should contact ACDC for participation.
HOP funds may only be provided to an eligible low-income household. Low-income is defined as less than 80% of the median income as determined and regionally adjusted by HUD. The HOP loan assistance limit is $20,000 (except households below 60% of median income may qualify for a $30,000 limit), not to exceed $3,000 in closing costs,and the payment ratio on the first mortgage should not be less than 25% of the buyers gross income used to qualify for the first mortgage. Current income limits are:
80% of Median Income - Maximum Loan $20,000
60% of Median Income - Maximum Loan $30,000
Frequently Asked Questions
What type of assistance is available?
HOP funds may be used for one or more of the following activities for each homebuyer assisted:
Down payment assistance (if required by primary lender).
Buyer’s closing costs, not to exceed $3,000.
If necessary to achieve affordability, a buy-down of the first mortgage (see loan limits). For the purpose of this assistance activity, the payment ratio on the first mortgage should generally not be less than 25% of the buyer’s gross income used to qualify for the first mortgage.
What are the terms of the assistance?
The HOP homebuyer assistance provides zero interest rate loans to low-income homebuyers with the first $10,000 conditionally forgivable over a five-year period. HOP funds provided to a homebuyer are subject to recapture (repayment) in the event that the assisted homebuyer does not continue to own and occupy the property purchased with HOP assistance for the required “period of affordability.” Funds provided under the HOP program will be secured by a Note and Deed of Trust executed by the homebuyer. The portion of the loan that is not forgiven is a zero interest loan held by a note that is due upon eventual sale, or refinancing of the home.
Other eligibility conditions?
Homes purchased or constructed using HOP funds must meet required property standards and must be the assisted homebuyer’s principal residence. Homes built before 1978 must undergo a visual assessment and possible stabilization of lead-based paint. Homes must be of non-luxury nature. The homebuyer may not be in arrears on any child support obligation. The homebuyer must attend a homebuyer education class provided by a HUD-approved housing counseling agency.
Where is the primary mortgage financing obtained?
Homebuyers assisted with HOP funds are expected to obtain primary mortgage financing through AHFC or another secondary market lender, available through banks and lending institutions that offer mortgage loans.
Primary loan pre-qualification:
The lending institution is solely responsible for approving or denying the mortgage loan. The primary lender should qualify a homebuyer under the financing program that provides the lowest interest rate possible given the homebuyer’s eligibility, and should determine the primary loan amount for which the homebuyer qualifies, using standard underwriting principles.
HOP funding limitations:
HOP assistance may not be used to reduce the amount of the primary loan for which the homebuyer otherwise qualifies. HOP assistance for first mortgage buydown should be provided only if the primary financing and any other secondary financing available is not adequate to satisfy the financing requirements of the qualifying home to be purchased. A minimum of $1,250 (in total HOP assistance) must be provided to a qualifying homebuyer or HOP assisted unit.
HOP assistance funding is very limited and will be available on a first come, first served basis.
How does one apply for the Home Opportunity Program?
Applications are available at the Alaska Community Development Corporation office in Palmer or through participating lenders. Current participating lenders are: Academy Mortgage, Academy Mortgage Corporation, Cornerstone Home Lending First National Bank of Alaska, Alaska USA Mortgage Company, Residential Mortgage (includes Summit Mortgage and Preferred Mortgage), Kodiak Island Housing Authority, Homestate Mortgage, Denali Federal Credit Union, First Bank, True North FCU, NeighborWorks Alaska, Primary Residential Mortgage and USDA Rural Development. Other interested lenders should contact ACDC for participation.
If you have any other questions about the Home Opportunity Program, please contact: Lori Tice (NMLS# 1137092) 907.746.5680 x 2