Performance Details

Department of Revenue - Alaska Housing Finance Corporation

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Mission

The mission of the Alaska Housing Finance Corporation is to provide Alaskans access to safe, quality, affordable housing.

Core Services

• Provide programs and service that are responsive to the diverse housing needs statewide
• Increase and sustain homeownership
• Increase special-needs housing
• Manage finances to maximize Alaska Housing Finance Corporation's (AHFC) profits

Mission Results	Core Services
A: Improve the degree to which statewide housing needs are met:  Details > TARGET #1: Increase the number of loans purchased by 3% TARGET #2: Maintain a High Voucher Utilization rate TARGET #3: Maintain high performer percentages in AHFC owned and managed Housing	A1: Provide programs and service that are responsive to the diverse housing needs statewide  Details > TARGET #1: Increase Multi-Family units by 3% A2: Increase and sustain homeownership  Details > TARGET #1: Increase AHFC's market share by 3% A3: Increase special-needs housing  Details > TARGET #1: Increase Senior Housing units by 5%
Mission Results	Core Services
B: Improve the Corporation's strength and ability to increase housing programs and service:  Details > TARGET #1: Maintain energy savings through AHFC's energy efficiency programs. TARGET #2: Maintain AHFC’s general obligation credit rating (A- = 15 / AAA = 22)	B1: Manage finances to maximize Alaska Housing Finance Corporation's (AHFC) profits  Details > TARGET #1: Maintain or increase Adjusted Change In Net Position TARGET #2: Maintain or increase Net Position

Performance Detail

Target #1: Increase the number of loans purchased by 3% Loans Purchased Fiscal Year New Loans % Change FY 2018 1,893 36% FY 2017 1,392 -21% FY 2016 1,752 -1.1% FY 2015 1,772 -8.2% FY 2014 1,930 17.7% FY 2013 1,640 -11.1% FY 2012 1,845 .03% FY 2011 1,839 37.5% FY 2010 1,337 -13.3% FY 2009 1,542 -35.5% FY 2008 2,392 -15% FY 2007 2,813 22.9% FY 2006 2,288 -26.6% FY 2005 3,117 -35.2% FY 2004 4,812 -20.2% FY 2003 6,029 38.5% FY 2002 4,353 -12.5% FY 2001 4,974 18% Analysis of results and challenges: The number of loans purchased increased by 36%, with growth being fueled by the following factors: While the Alaska real estate market remained static in FY2018, anticipated federal interest rate hikes made AHFC’s bond rates much more competitive and attractive. In addition, AHFC approved 3 new lending partners and increased outreach efforts to insure lenders had the information necessary to confidently offer AHFC products to borrowers. FY2018’s 36% increase in the total number of loans equated to a 32% increase in the dollar volume of loans purchased, mainly coming from the Single Family production side. This increased dollar volume production of over $122 million is comprised of a 36% increase in the number of Single Family loans and a decline of 17% in Multi-Family loans. The dollar volume of loans purchased in FY2018 was $509.7 million, increasing the total portfolio by $218.8 million, a 7% increase. In FY2018, AHFC purchased 1893 loans with an average loan amount of $269,236 compared to 1392 loans with an average loan amount of $278,020.88 in FY2017. The biggest challenge for first-time homebuyers continues to be a lack of inventory in an affordable price range. Activity was up across all loan programs with an exceptionally high increase in the number of Veterans Mortgage Program loans which increased by 453%. AHFC continues to offer loans and loan options to Alaskan borrowers that are not available from the Government Sponsored Enterprises (GSE’s) or other investors. These include programs for homebuyers that are low income, first-time homebuyers, veteran homebuyers, homebuyers who desire energy efficient housing, homebuyers that desire homes with features unique to Alaska, and homebuyers that live in rural areas of the state. In total, AHFC provided loans to borrowers in 64 communities across the state. Loan production is subject to such vagaries as interest rate fluctuations, changing property values, property availability, pressure from changes in both the local and national economy, complications associated with federal and state regulations that may expand or limit accessibility to credit and/or property, and competition with the GSE’s and other investors in the private and public sectors. These factors all continue to pose challenges to the mortgage market.

Target #2: Maintain a High Voucher Utilization rate Voucher Utilization Fiscal Year Score Target Grade FY 2018 100% 100% High Performer FY 2017 100% 100% High Performer FY 2016 100% 100% High Performer FY 2015 99% 100% High Performer FY 2014 100% 100% High Performer FY 2013 96.5% 100% High Performer FY 2012 95% 100% High Performer FY 2011 97% 100% High Performer FY 2010 96% 100% High Performer FY 2009 96% 100% High Performer FY 2008 96% 100% High Performer FY 2007 100% 100% High Performer FY 2006 78% 100% Standard Performer FY 2005 100% 100% High Performer FY 2004 90% 100% High Performer FY 2003 95% 100% High Performer FY 2002 96% 100% High Performer FY 2001 96% 100% High Performer FY 2000 100% 100% High Performer Analysis of results and challenges: This assessment is based on criteria used by the U.S. Department of Housing and Urban Development (HUD) in measuring program management. HUD’s assessment requires 95% lease up rate or a 95% Housing Assistance Payment expenditure rate. For the fiscal year 2018, lease up activity averaged 4,322 vouchers per month, which is 98% of the 4,397 HUD allocated vouchers. This effectively gives AHFC a 100% score in this criteria.

Target #3: Maintain high performer percentages in AHFC owned and managed Housing Public Housing Assessment System (PHAS) Fiscal Year Score Target Grade FY 2018 97% 100% High Performer FY 2017 97% 100% High Performer FY 2016 98% 100% High Performer FY 2015 98% 100% High Performer FY 2014 98% 100% High Performer FY 2013 98% 100% High Performer FY 2012 93% 100% High Performer FY 2011 92% 100% High Performer FY 2010 92% 100% High Performer FY 2009 0% Suspended by HUD Transition Year FY 2008 0% Suspended by HUD Transition Year FY 2007 87% 87% High Performer FY 2006 77% 100% Standard Performer FY 2005 87% 100% Standard Performer FY 2004 100% 100% High Performer FY 2003 94% 100% High Performer FY 2002 92% 100% High Performer FY 2001 94% 100% High Performer Analysis of results and challenges: HUD uses certain performance measures to indicate the overall health of a public housing authority. These measurements, when compared to HUD’s target goals, provide an assessment of overall property management. For FY2018, AHFC’s performance in these areas was as follows: Measurement - HUD’s Target: Occupancy Rate: 97% (A) Unit Turn Around Time: 20 days (A) Maintenance Work Orders: 100% = Less than 25 (A) Emergency Work Orders: 100% = within 24 hours (A) Annual Inspections: 100% (A) Data Reporting to HUD: 85% Measurement – AHFC’s Performance: Occupancy Rate: 97% Unit Turn Around Time: 66 days (Higher than typical vacancies throughout the year extended average turnaround times). Maintenance Work Orders: 18 days Emergency Work Orders: 100% Annual Inspections: 100% Data Reporting to HUD: 100% In addition to operations and management, the Public Housing Division has met multiple performance standards; timely obligation; expenditure and closeout dates for its federal Capital Program grants; and obligation and expenditure benchmarks for capital projects.

Target #1: Increase Multi-Family units by 3% Multi-Family Units Year New Units Total Units % Change 2018 533 17,329 3.17% 2017 217 16,796 1.31% 2016 167 16,579 1.02% 2015 199 16,412 1.22% 2014 305 16,213 1.91% 2013 403 15,908 2.59% 2012 537 15,505 3.58% 2011 262 14,968 1.78% 2010 94 14,706 0.64% 2009 658 14,612 4.72% 2008 547 13,954 4.08% 2007 437 13,407 3.37% 2006 839 12,970 6.92% 2005 1,067 12,131 9.64% 2004 1,491 11,064 15.58% 2003 938 9,573 10.99% 2002 748 8,625 9.36% 2001 2,897 7,887 58.06% 2000 1,438 4,990 40.00% Analysis of results and challenges: Multi-family housing activity is subject to interest rate fluctuations, local economic conditions and other unpredictable market influences. Affordable rental housing remains in demand and benefits markets by freeing proportional household income to be spent in the community. However, new construction faces marginal feasibility due to the spread of achievable rents and rents needed to supporting development costs. Unit production will remain a challenge due to high development costs, flat funding and reductions in match funding available for AHFC funded projects.

Target #1: Increase AHFC's market share by 3% Market Share Fiscal Year AHFC % Change FY 2018 25.5% 9.0% FY 2017 16.5% (1.8)% FY 2016 18.3% .9% FY 2015 17.4% (1.2)% FY 2014 18.6% 6.3% FY 2013 12.3% (4.0)% FY 2012 16.3% (2.5)% FY 2011 18.8% 6.5% FY 2010 12.3% (4.8)% FY 2009 17.1% (5.2)% FY 2008 22.3% 0.1% FY 2007 22.2% 4.6% FY 2006 17.6% (5.2)% FY 2005 22.8% (9.1)% FY 2004 31.9% 2.9% FY 2003 29.0% (4.3)% FY 2002 33.3% (20.4)% FY 2001 53.7% 5.2% FY 2000 48.2% 0.0% Analysis of results and challenges: “Market Share” is a measure of AHFC’s competitiveness when compared to other financial investors that offer comparable products. The market share is calculated based on the percentage of new production AHFC loans when compared to the total number of new production loans reported in AHFC’s annual survey of Alaskan lenders, produced in collaboration with the Alaska Department of Labor. The overall market size and AHFC’s Market share for the State Fiscal Year includes new loans for single family, condominium, duplex, and triplex purchases. Refinances are not included in the calculation. Total AHFC’s loan sum is divided by the total market. The percentage change is the difference from the prior year and the current year market share percentage. This provides a gain/loss measure from the previous year. In FY 2018, AHFC’s market share increased to 25.5%, a 9 percentage point increase from the previous fiscal year. Over 50% of AHFC’s single-family and condo market share came from first-time homebuyers in FY 2018. This aligns with a national trend that has seen first-time homebuyers outpace repeat borrowers. AHFC offers two programs and one loan option designed specifically for first-time homebuyers and a down payment assistance program for any borrower. According to the market data, there was an overall slowdown in home purchases as the total market volume of loans decreased by 3.86% in FY 2018. Consumer sentiment from economic uncertainties and low inventory may be contributing to the decrease in home purchases. AHFC offers extremely competitive interest rates, more flexibility with underwriting Alaskan properties, loan options that allow for financing of renovations, and interest rate reductions for certain energy improvements. Other investors are able to offer lower down payments and premium pricing to cover closing costs; however, there are often loan level price adjusters (credit score, loan-to-value, property type, etc.) associated with those loans. AHFC loans may become even more attractive to Alaskans as the federal rate increases, further increasing market share and promoting access to housing.

Target #1: Increase Senior Housing units by 5% Senior Housing Units Fiscal Year New Senior Units Total Senior Units % Change FY 2018 59 1,435 4.29% FY 2017 92 1,376 7.17% FY 2016 47 1,284 3.80% FY 2015 95 1,237 8.32% FY 2014 64 1,142 5.93% FY 2013 94 1,078 9.55% FY 2012 20 984 2.07% FY 2011 58 964 6.40% FY 2010 30 906 3.42% FY 2009 45 876 5.42% FY 2008 53 831 6.81% FY 2007 48 778 6.58% FY 2006 42 730 6.10% FY 2005 25 688 3.77% FY 2004 64 663 10.68% FY 2003 144 599 31.65% FY 2002 88 455 23.98% FY 2001 24 367 7.00% Analysis of results and challenges: Over the last two years, (FY2018 – FY2019), AHFC’s Senior Citizen Development Fund (SCHDF) has averaged approximately $1.0M in funding. The Rasmuson Foundation has also contributed to SCHDF - $1.75 Million in FY2017. In the state’s most recent budget cycle (FY 2019), SCHDF was funded at $1M. SCHDF is a powerful tool, not only for senior housing developers, but also for AHFC’s Senior Access Program (SAP). SAP provides grant funds for the installation of grab bars, toilet lifts and similar accessible features for those 55 years of age and above. Through this program, seniors are able to age in place longer, thus delaying or eliminating the need to move to traditional senior housing. As funds have diminished, some areas within Alaska are not currently served by SAP leaving seniors in those regions with limited options to remain in their homes and communities. While SCHDF funding has remained stable in recent years, Alaska’ senior population continues to grow. According to the State of Alaska Department of Labor and Workforce Development (2018), the percentage of Alaska’s population over sixty-five is expected to increase from 11% to 16% by 2040. This continued growth rate places further demands each year on senior housing development and much needed accessibility modifications, both of which are a made possible through SCHDF. Alaska Department of Labor and Workforce Development (2018) estimates that Alaska’s senior population will double by 2045, increasing from 82,686 to 131,982. This increase echoes the national trend in senior population, which according to the U.S. Census Bureau is expected to double by 2060. The gap between the need and what is developed grows each year continues to grow across Alaska. Senior and special needs housing remains a high priority for the Corporation. (Note: Although AHFC provides mortgage financing for assisted living facilities, those developments report beds rather than units; consequently, AHFC mortgages to assisted living properties are excluded from the “unit” data noted above).

Target #1: Maintain energy savings through AHFC's energy efficiency programs. Maintain Energy Consumption Reduction Fiscal Year Annual Energy Reduction Units Retrofitted FY 2018 63,063 785 FY 2017 135,844 1,490 FY 2016 192,419 2,364 FY 2015 372,959 4,483 FY 2014 443,085 5,502 FY 2013 409,029 5,201 FY 2012 413,170 5,358 FY 2011 945,699 10,232 FY 2010 778,371 8,679 FY 2009 131,962 1,544 Analysis of results and challenges: Since FY2008, the State Legislature has appropriated a total of $611.10 million for residential energy efficiency through the Weatherization Assistance and Home Energy Rebate Programs. The funding has been used to retrofit or construct residential units to be more energy efficient. It is estimated that homes retrofitted under these programs save on average 30% on energy costs per unit. The Annual Energy Reduction in the Target Table #1 above reflects energy savings annually in MMBTUs. Collectively, the 45,638 units retrofitted, since 2008, save an estimated annual 3,885,601 MMBTUs. The decline in annual energy reduction and number of units retrofitted is contingent on funding. Legislated appropriation levels for the Weatherization Assistance and Home Energy Rebate programs have declined in recent years, which has resulted in a decrease in energy reduction. Based on current census data, there are approximately 250,235 occupied housing units statewide. As of the end of FY2018, 45,638 units have been retrofitted. The 45,638 units represent nearly 18.24% of the 250,235 total eligible units.

Target #2: Maintain AHFC’s general obligation credit rating (A- = 15 / AAA = 22) Standard & Poor's Bond Rating Fiscal Year YTD Total FY 2018 AA+ FY 2017 AA+ FY 2016 AA+ FY 2015 AA+ FY 2014 AA+ FY 2013 AA+ FY 2012 AA+ FY 2011 AA+ FY 2010 AA FY 2009 AA FY 2008 AA FY 2007 AA FY 2006 AA FY 2005 AA FY 2004 AA FY 2003 AA FY 2002 AA- FY 2001 AA- FY 2000 AA- Analysis of results and challenges: AHFC raised its general obligation credit rating with Standard & Poor’s (S&P) to AA+ as of January 5, 2011. As one of the largest debt issuers in the State of Alaska, AHFC must maintain its strong general obligation credit rating and favorable reputation with investors. AHFC continues to achieve these goals. In May of 2018, S&P Global Ratings reaffirmed the Corporation’s AA+ issuer rating citing the following: Very high levels of equity and very low delinquency levels compared to other rated Housing Finance Agencies; improvement in net income for the past five consecutive years through June 30, 2017; prudent debt management policies; an experienced, proactive, and innovative management team; and the dividend plan passed by the state legislature in 2003 that limits the transfers of net income from AHFC to the state.

Target #1: Maintain or increase Adjusted Change In Net Position Adjusted Change in Net Position Fiscal Year Annual (in thousands) Change (in thousands) FY 2018 51993.0 12731.9 FY 2017 $39,261.0 ($1,336.8) FY 2016 $40,597.8 $6,031.3 FY 2015 $34,566.5 $9,154.5 FY 2014 $25,412.0 $15,458.4 FY 2013 $9,953.0 ($4.207.1) FY 2012 $14,160.0 ($22,260.8) FY 2011 $36,420.8 $5,600.0 FY 2010 $30,820.8 ($25,911.5) FY 2009 $56,732.3 ($34,844.2) FY 2008 $91,576.5 $3,775.1 FY 2007 $87,801.5 ($7,978.3) FY 2006 $95,779.8 $10,920.1 FY 2005 $84,859.7 $7,146.2 FY 2004 $77,713.0 $10,636.0 FY 2003 $67,077.0 ($8,583.0) FY 2002 $75,660.0 ($20,693.0) FY 2001 $96,353.0 $14,551.0 FY 2000 $81,802.0 $1,952.0 Analysis of results and challenges: “Adjusted Change in Net Position” includes the corporation's operating income adjusted for state transfers, state capital bond debt service, and capital project adjustments. Figures for FY2003 and prior represent "operating income." During FY2003, the corporation worked with the administration and the legislature to pass HB256, which continued the transfer plan and limited total transfers to the state to a percent of the corporation's "adjusted net income." The latest amendment to the transfer plan was through SB 270 which reads as follows: SECTION 1. AS 18.56.089(d)(1) is amended to read: (1) "adjusted change in net assets" means the change in net assets from the base fiscal year, adjusted for capital expenditures incurred during the base fiscal year and temporary market value adjustments to assets and liabilities made during the base fiscal year: SECTION 2. This Act takes effect June 20, 2010.

Target #2: Maintain or increase Net Position Net Position Fiscal Year Annual (in millions) Change (in thousands % change FY 2018 $1,538.7 $25,100.0 1.66% FY 2017 $1,513.6 $14,100.0 0.94% FY 2016 $1,499.5 $14,000.0 0.94% FY 2015 $1,485.5 ($24,427.0) (1.64%) FY 2014 $1,509.9 ($15,620.0) (1.02%) FY 2013 $1,525.5 ($28,615.0) (1.84%) FY 2012 $1,554.1 ($39,676.0) (2.49%) FY 2011 $1,593.8 ($30,172.0) (1.86%) FY 2010 $1,623.9 ($48,120.0) (2.88%) FY 2009 $1,672.1 $5,940.0 0.36% FY 2008 $1,666.1 ($18,301.0) (1.09%) FY 2007 $1,684.4 ($5,560.0) (0.33%) FY 2006 $1,690.0 $6,959.0 0.41% FY 2005 $1,683.0 ($23,386.0) (1.39%) FY 2004 $1,706.4 ($31,107.0) (1.79%) FY 2003 $1,737.5 ($28,244.0) (1.63%) FY 2002 $1,765.8 ($7,867.0) (0.45%) FY 2001 $1,773.6 $21,322.0 1.20% FY 2000 $1,752.3 ($35,680.0) (2.04%) Analysis of results and challenges: AHFC is using prior fiscal year "net position" as its benchmark. Net position has increased from the prior year by $25 million.

Current as of November 9, 2018