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 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 A2: Increase and sustain homeownership  Details > TARGET #1: Increase AHFC's market share A3: Increase special-needs housing  Details > TARGET #1: Increase Senior Housing units
Mission Results	Core Services
B: Improve the Corporation's strength and ability to increase housing programs and service:  Details > TARGET #1: Increase energy efficiency savings through energy efficiency programs TARGET #2: Maintain the AHFC general obligation credit rating.	B1: Manage finances to maximize Alaska Housing Finance Corporation's (AHFC) profits  Details > TARGET #1: Maintain or increase Adjusted Change In Net Position

Performance Detail

Target #1: Increase the number of loans purchased Analysis of results and challenges: The total number of loans (single family and multi-family) purchased decreased by 2% from FY2019 to FY2020, due to the following factors: Buyers in almost all single-family markets across the state continued to see less inventory for sale, more competition for homes, and increasing prices. This, coupled with the COVID-19 pandemic in the third/fourth quarter of the fiscal year and the subsequent rate drop by the Federal Reserve, made rates extremely competitive, and AHFC less competitive for a short time during what is normally a very strong spring home-buying season. Likewise, multi-family production saw a large decrease mainly due to competitive rates and concerns about broader economic conditions. Although we saw a 2% decrease in the total number of loans in FY2020, the total dollar volume of loans purchased increased by 1%, which is attributed to higher average loan amounts in the single-family arena. Total dollar volume of loans purchased in FY2020 was $508.6 million compared to $503.1 million in FY2019. AHFC continues to offer loans and loan options to Alaskan borrowers that are not available from the Government Sponsored Enterprises (GSEs) 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.

Target #2: Maintain a High Voucher Utilization rate Analysis of results and challenges: This assessment uses U.S. Department of Housing and Urban Development (HUD) criteria in measuring program management. HUD's assessment requires 95% lease up rate. For the fiscal year 2020, lease up activity averaged 4,820 vouchers per month, which is over 110% of the 4,397 HUD allocated vouchers. This gives AHFC a 100% score in this criterion.

Target #3: Maintain high performer percentages in AHFC owned and managed Housing Methodology: Note: FY2008-2009, PHAS was in transition and HUD suspended performance targets. 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 specific HUD targets, provide an assessment of overall property management. For FY2020, AHFC's performance in these HUD identified areas was as follows: HUD Targets: Occupancy Rate: 97% Unit Turn Around Time: 20 days Maintenance Work Orders: 100% in less than 25 days Emergency Work Orders: 100% within 24 hours Annual Inspections: 100% Data Reporting to HUD: 85% of all vouchers AHFC Performance*: Occupancy Rate: 95% Unit Turn Around Time: 40 days Maintenance Work Orders: 100% in than 25 days Emergency Work Orders: 100% within 24 hours Annual Inspections: See comment below Data Reporting to HUD: 100% of all vouchers Due to COVID-19 and pursuant to HUD PIH Notices 2020-05 and 2020-13, public housing authorities received blanket waivers with respect to HUD requirements governing routine maintenance work orders and annual inspections. The AHFC Public Housing Division adopted these waivers on March 24, 2020. Emergency work orders were not waived and were still completed within 24 hours per HUD requirements. AHFC's turnaround time for public housing units this year was 40 days, which is above HUD's target of 20 days. The following factors affected the reported turnaround time and occupancy statistics: - More unit refusals by applicants; - Rent reform created more vacancies of units with long term residents which took much longer to turn; - COVID-19 affected numbers for FY20 including our intake staffs ability to be in the office to work files, applicants not wanting to move from wherever they were, paper work delays due to closed office and transferring of secure documents, etc. AHFC met HUD requirements for maintenance work orders, emergency work orders, and data reporting.

Target #1: Increase Multi-Family units Total Multi-Family Units by Fiscal Year Fiscal Year New Units Total Units FY 2020 358 18,020 FY 2019 333 17,662 FY 2018 533 17,329 FY 2017 217 16,796 FY 2016 167 16,579 FY 2015 199 16,412 FY 2014 305 16,213 FY 2013 403 15,908 FY 2012 537 15,505 FY 2011 262 14,968 FY 2010 94 14,706 FY 2009 658 14,612 FY 2008 547 13,954 FY 2007 437 13,407 FY 2006 839 12,970 FY 2005 1,067 12,131 FY 2004 1,491 11,064 FY 2003 938 9,573 FY 2002 748 8,625 FY 2001 2,897 7,887 FY 2000 1,438 4,990 Analysis of results and challenges: Affordable rental housing remains in demand and can benefit markets by facilitating community growth and freeing households to spend more of their disposable income within the community. The production of multi-family housing activity is subject to interest rates, local economic conditions, and other volatile market factors. New construction, in several communities across the state, continues to face marginal feasibility due to the persistent gap between achievable rents and those required to support the high development costs. These factors, when coupled with the reductions in matching funding sources utilized by AHFC funded projects, continue to limit new housing production.

Target #1: Increase AHFC's market share Analysis of results and challenges: Market Share is a measure of the competitiveness of AHFC when compared to other financial investors that offer comparable products. The market share calculation is based on the percentage of new production AHFC loans compared to the total number of new production loans reported in the AHFC annual survey of Alaskan lenders, produced in collaboration with the Alaska Department of Labor. Overall market size and the AHFC 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. Percentage change is the difference from prior-year and current-year market share percentage. This provides a gain/loss measure from the previous year. In FY 2020, the market share of AHFC decreased by 3% to 26.7%. Over 52% of the AHFC single-family and condominium market share came from first-time homebuyers in FY2020. 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. There was an overall 3.5 % increase in home purchases in FY 2020 over 2019. In the same period, loan production by AHFC has decreased by 7.0%. Historically low interest rates are pushing borrowers to private sector loans. AHFC's new purchase and refinance products are less competitive in the current lending environment.

Target #1: Increase Senior Housing units Analysis of results and challenges: The Alaska Department of Labor and Workforce Development (2019) estimated that the senior population (65+) in Alaska could increase from 23% (low forecast scenario) to up to 58% by 2045 (high forecast scenario). This increase mirrors the national trend in senior population, expected to double by 2060 (U.S. Census Bureau). The gap between need and availability continues to grow each year across Alaska. Senior housing remains a high priority for the Corporation. As with multifamily housing production, senior housing unit development is stymied by the gap between the rents achievable and the cost of building new units. While senior housing funding has remained stable in recent years, the Alaska senior population continues to grow. This continued growth rate places further demands each year on funding from communities throughout the State. (Note: Although AHFC provides mortgage financing for assisted living facilities, those developments report beds rather than units; consequently, the data above excludes AHFC mortgages to assisted living properties.)

Target #1: Increase energy efficiency savings through energy efficiency programs 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 program targets energy efficiency improvements through retrofitting and new construction of homes. Homes retrofitted under these programs save on an estimated average 30% on energy costs per unit. Collectively, the 46,372 units, or 18.53% of eligible housing units, retrofitted since 2008, save an estimated annual 4,010,228 MMBTUs (one million British Thermal Units).

Target #2: Maintain the AHFC general obligation credit rating. Methodology: A- = 15 / AAA = 22 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. As of March 27, 2020, S&P Global Ratings reaffirmed the AA+ issuer rating of the Corporation. The rating considered the following indicators: 1. A large and high-performing loan portfolio of approximately $3.3 billion in primarily single-family and multifamily mortgage loans, with extremely low delinquencies of approximately 1.2% of total loans; 2. Strong profitability as evidenced by at least five-consecutive period of increasing S&P Global Ratings-calculated net income; 3. Very strong equity position as evidenced by at least five-consecutive periods of S&P Global Ratings-calculated net position growth; 4. Very solid and high capital adequacy ratios including a five-year average S&P Global Ratings-calculated net equity to total assets of 28.7%, well in excess of the 15.0% benchmark for the rating category; and 5. Experienced, proactive, and involved senior management and board of directors.

Target #1: Maintain or increase Adjusted Change In Net Position Adjusted Change in Net Position Fiscal Year Annual (in thousands) Change (in thousands) FY 2020 $56,766.0 ($4,034.0) FY 2019 $60,800.0 $8,807.0 FY 2018 $51,993.0 $12,731.9 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 operating income of the corporation 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 adjusted net income of the corporation. The latest amendment to the transfer plan was through Senate Bill 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.

Current as of October 22, 2020