SOURCE: Alaska Housing Finance Corporation

September 11, 2006 16:13 ET

Veterans Mortgage Program Popular

ANCHORAGE, AK -- (MARKET WIRE) -- September 11, 2006 -- In the first 70 days of the current fiscal year, more Alaska veterans were able to take advantage of the lower mortgage interest rates offered under the state's Veterans Mortgage Program than those who did over the 365 days of the previous year, according to Alaska Housing Finance Corporation CEO/Executive Director Dan Fauske.

Under the mortgage program, qualified veterans can obtain an interest rate that is about one-half of a percent lower than the rate of a conventional mortgage.

Between July 1 and Sept. 8 of this year, AHFC financed $12.6 million in mortgages for 46 veterans. This compares to $11.5 million in mortgages for 44 vets during the period between July 1, 2005, and June 30, 2006. "So far this year, the monthly average for veterans' mortgages exceeds $6 million, compared to less than $1 million a month last year," Fauske noted.

The dramatic increase in the number of veterans' loans results from congressional action earlier this year that eliminated a provision in federal law restricting eligibility in the program to only veterans who entered active duty service prior to January 1, 1977, and who applied for a loan within 30 years of discharge. Congress agreed to remove the pre-1977 service requirement and allow a 25-year period of eligibility after discharge from the military.

"We are very grateful for the support and leadership of our Alaska Congressional Delegation to persuade their colleagues to change the law," said Fauske, who's been advocating the change in eligibility requirements for more than a decade "It's great that the federal government provided this benefit to Vietnam-era veterans, but the benefit shouldn't be denied to those who served since," he said. "It's a matter of fairness."

Besides Alaska, four other states offer this program for their veterans -- California, Texas, Oregon and Wisconsin. Alaska's Veterans' Mortgage Program was originally made available to Alaska veterans in 1983 and is funded by tax-exempt mortgage revenue bonds, approved by Alaska voters.

Since the program's inception, AHFC has provided more than $1.5 billion in loans to just under 10,000 veterans. Federal law does not permit the program to be used to refinance an existing mortgage loan.

AHFC is a self-supporting public corporation with offices in 16 communities statewide. It provides statewide financing for multi-family complexes, congregate facilities, and single-family homes, with special loans for first-time home buyers, low- and moderate-income borrowers, veterans, teachers, nurses, public safety officers, and those living in rural areas of the state. AHFC also provides energy and weatherization programs, low-income rental assistance in 17 communities, and special programs for the homeless. Since 1986, AHFC has contributed nearly $1.5 billion to Alaska's State budget revenues through cash transfers, capital projects and debt service payments.

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