Loan program could help residents who want to build on subdivision lots

It’ll be early fall before the borough offers for sale 20 lots at the new Alder Top Village (Keishangita.’aan) residential subdivision upland from Shoemaker Bay, but residents interested in buying and building a home on the property can start lining up financing.

In addition to conventional lenders such as banks, credit unions and the Alaska Housing Finance Corp., Haa Yakaawu Financial Corp., which works with the Tlingit Haida Regional Housing Authority, offers a couple of different home loan programs, including one with below-market interest rates for qualifying borrowers.

Haa Yakaawu has made about 120 loans around Southeast and is looking to grow, said Shaun Guthrie, manager of the Juneau-based operation.

“We serve the hard to serve,” he said. “We’re not here to make a buck. We’re here to put money back in the community.”

For people looking to buy one of the subdivision lots to build a new home, Haa Yakaawu can provide financing that allows 18 months for construction from loan approval to project completion, Guthrie said. They require detailed building plans, a budget and an appraisal, the same as a similar home loan.

The lender added new construction financing to its portfolio last year.

Both of its loan programs have income limits. Households earning no more than the area’s median income — $114,000 for Wrangell — can borrow money at a fixed rate, Guthrie said, which was at 6% a week ago, about a full percentage point below the market rate charged to borrowers who exceed the income limit.

The reduced-rate offering under a U.S. Department of Agriculture program is limited to Alaska Natives and American Indians, he said.

For households earning less than 80% of the area’s median income — a $79,600 limit in Wrangell, Guthrie said — Haa Yakaawu can offer loans as low as 4%. “That’s where we get creative with the interest rates.”

That program is open only to Alaska Natives and American Indians.

Other advantages of the lower-rate program include no down payment required, no mortgage insurance required to cover the debt (property insurance is required), and Haa Yakaawu can be flexible in structuring a deferred loan on top of a conventional long-term loan, allowing borrowers to stretch out their payments.

The lender limits its loans to owner-occupied residences; no rental properties allowed. It does not finance undeveloped land, but the land costs can be included in the financing for new construction, he said.

The 20 subdivision lots likely will go on sale in September or October, Kate Thomas, the borough’s economic development director, said May 24.

Roadwork at the site has been completed but the borough wants to wait until water, sewer and electrical services are installed before allowing prospective buyers to walk the lots in advance of the sale, she said.

The brough plans to sell 10 lots to the highest bidders in an online auction, while selling the other 10 lots by lottery.

The 10 front lots that will go on sale by auction will start at between $53,000 and $70,000 each. The 10 back-row lottery parcels will be sold at a fixed price of between $45,000 and $60,000 each.

 

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