The mission of the Alaska Housing Finance Corporation is to provide Alaskans access to safe, quality, affordable housing.
- 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|
|Mission Results||Core Services|
|A: Result - Improve the degree to which statewide housing needs are met:|
Target #2: Maintain a High Voucher Utilization rate
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)
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.
|A1: Core Service - Provide programs and service that are responsive to the diverse housing needs statewide|
Target #1: Increase Multi-Family units by 3%
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.
|A2: Core Service - Increase and sustain homeownership|
Target #1: Increase AHFC's market share by 3%
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.
|A3: Core Service - Increase special-needs housing|
Target #1: Increase Senior Housing units by 5%
Senior Housing Units
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).
|B: Result - Improve the Corporation's strength and ability to increase housing programs and service:|
Target #1: Maintain energy savings through AHFC's energy efficiency programs.
Maintain Energy Consumption Reduction
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
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.
|B1: Core Service - Manage finances to maximize Alaska Housing Finance Corporation's (AHFC) profits|
Target #1: Maintain or increase Adjusted Change In Net Position
Adjusted Change in Net Position
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
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