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: Increase energy efficiency savings through energy efficiency programs by 10% 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 TARGET #2: Maintain or increase Net Position

Performance Detail

Target #1: Increase the number of loans purchased by 3% Cumulative Loans Purchased Fiscal Year New Loans FY 2019 1,885 FY 2018 1,893 FY 2017 1,392 FY 2016 1,752 FY 2015 1,772 FY 2014 1,930 FY 2013 1,640 FY 2012 1,845 FY 2011 1,839 FY 2010 1,337 FY 2009 1,542 FY 2008 2,392 FY 2007 2,813 FY 2006 2,288 FY 2005 3,117 FY 2004 4,812 FY 2003 6,029 FY 2002 4,353 FY 2001 4,974 Analysis of results and challenges: The number of loans purchased decreased by .4% from FY2018 to FY2019, mainly due to the following factors: While the Alaska real estate market remained relatively static in FY2019, we continue to see less inventory for sale and more competition for moderately priced homes. This trend was consistent across the state with fewer homes sold. Then FY2019 .4% decrease in the total number of loans equated to a 1% decrease in the dollar volume of loans purchased, which can be attributed to a decrease in the number of multi-family loans. While the single family production side increased volume by .25%, multi-family production dropped by 1%. The dollar volume of loans purchased in FY2019 was $503.1 million, and in spite of this decreased production, the total mortgage portfolio increased by $203 million, a 6% increase. This number is due to fewer loan payoffs. In FY2019, AHFC purchased 1,885 loans with an average loan amount of $266,901 compared to 1,893 loans with an average loan amount of $269,236 in FY2018. The biggest challenge for first-time homebuyers continues to be a lack of inventory in an affordable price range. Activity was up across our Tax-Exempt, Veterans Mortgage and Rural loan programs, which provide terms and options that make homeownership possible for first-time homebuyers, veterans, and borrowers in rural markets. 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. In total, AHFC provided loans to borrowers in 58 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 GSEs 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 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. HUDs 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 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 HUD targets, provide an assessment of overall property management. For FY2019, AHFC performance in these 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: 39 days Maintenance Work Orders: 100% in than 25 days Emergency Work Orders: 100% within 24 hours Annual Inspections: 100% of units annually inspected Data Reporting to HUD: 98% of all vouchers 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 Fund Program.

Target #1: Increase Multi-Family units by 3% Total Multi-Family Units by Calendar Year Year New Units Total Units 2019 333 17,662 2018 533 17,329 2017 217 16,796 2016 167 16,579 2015 199 16,412 2014 305 16,213 2013 403 15,908 2012 537 15,505 2011 262 14,968 2010 94 14,706 2009 658 14,612 2008 547 13,954 2007 437 13,407 2006 839 12,970 2005 1,067 12,131 2004 1,491 11,064 2003 938 9,573 2002 748 8,625 2001 2,897 7,887 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. Although the demand for affordable housing has been consistently robust, the production of multi-family housing activity is subject to interest rates, local economic conditions and other volatile market factors. New construction continues to face marginal feasibility due to the persistent gap between achievable rents and those required to support the high development costs in several communities across the state. These considerations, coupled with the reductions in match funding sources utilized by AHFC funded projects, are expected to continue limiting the throughput of new housing production.

Target #1: Increase AHFC's market share by 3% 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 is calculated based on the percentage of new production AHFC loans when 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. The 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. 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 2019, the market share of AHFC increased to 29.7%, a 4.2 percentage point increase from the previous fiscal year. Over 59% of the AHFC single-family and condo market share came from first-time homebuyers in FY2019. 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 a significant slowdown in home purchases, as the total market volume of loans decreased by 13.36% in FY 2019. In the same period, loan production by AHFC has only decreased by 0.64%. Consumer sentiment from economic uncertainties and low inventory were most likely the main contributors to the decrease in home purchases. Many borrowers are choosing to hold on to their low interest rate mortgage, renovate, and age in place. 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 offers extremely competitive interest rates, more flexibility with underwriting Alaskan properties, loan options that allow for financing of renovations, and interest rate reductions for low-income borrowers and certain energy improvements. These attractive terms and features should continue to help maintain the AHFC market share, while providing access to housing for Alaskans across the State.

Target #1: Increase Senior Housing units by 5% Analysis of results and challenges: The Alaska Department of Labor and Workforce Development (2018) estimated that the senior population in Alaska will double by 2045, increasing from 82,686 to 131,982. This increase echoes the national trend in senior population that according is expected to double by 2060 (U.S. Census Bureau). The gap between the need and what is developed continues to grow each year across Alaska. Senior housing remains a high priority for the Corporation. As with multifamily housing production, the development of new senior housing units has been stymied by the gap between the rents achievable and the cost of building new units. Although the Senior Citizens Housing Development Fund (SCHDF) is a powerful tool to develop new units, fewer sources of match funding exist than in years past for sponsors to leverage that program. While SCHDF funding has remained stable in recent years, the Alaska senior population continues to grow. This continued growth rate places further demands each year on scarce SCHDF funding from communities throughout the State. (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 data noted above).

Target #1: Increase energy efficiency savings through energy efficiency programs by 10% 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. Collectively, the 46,058 units – or 18.41% of eligible housing units – have been retrofitted since 2008, saving an estimated annual 3,991,137 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 & Poors (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 August 2019, S&P Global Ratings reaffirmed the AA+ issuer rating of the Corporation, based on the following: very strong financial position as evidenced by the net position of the corporation; five-year averages indicating sufficient resources available to sustain operations through volatile or uncertain circumstances; material improvement in operating profit for the past six-consecutive years through June 30, 2018; very low delinquencies compared with other rated housing finance agencies; 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 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 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 2019 $1,538.7 $32,727.0 2.13% 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 $33 million.

Current as of August 3, 2020