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 AHFCs 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 increased by 8.1% from FY2020 to FY2021 despite significant challenges. Buyers in most single-family markets across the state continued to see less inventory for sale, more competition for homes, and increasing prices. This, coupled with the on-going COVID-19 pandemic, would normally create a decrease in activity, but the rate drop by the Federal Reserve, the ability for many to work remotely, and the desire to have more space, heated up the market and made homeownership a top priority for many. Likewise, multi-family production also increased due to tenant and rent concerns. The 8.1% increase in the total number of loans in FY2021 provided an increase of 15.2% in the total dollar volume of loans purchased, once again following the trend of higher loan amounts in both the single-family and multi-family arena. The total dollar volume of loans purchased in FY2021 was over $586.0 million compared to $508.6 million in FY2020. 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 options 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. HUDs assessment requires a 95% lease up rate. For the fiscal year 2021, lease up activity averaged 4,589 vouchers per month, which is over 104% of the 4,379 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 FY2021, AHFCs 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: 98% Unit Turn Around Time: 55 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. AHFCs turnaround time for public housing units this year was 55 days, which is above HUDs target of 20 days. The following factors affected the reported turnaround time and occupancy statistics: - Delays in receiving materials from manufacturers, including refrigerators, stoves, cabinets and flooring; - Maintenance staff absences related to COVID due to exposures or safety protocols. This in turn delayed maintenance from going into a unit to complete a turn; - Delayed processing of applicants from waiting list due COVID-19 related Intake staff absences; and, - Unit refusals by applicants. AHFC met HUD requirements for maintenance work orders, emergency work orders, and data reporting.

Target #1: Increase Multi-Family units 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 AHFCs 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. In FY2021, the market share of AHFC decreased by 10.1% to 16.6%. Over one third of the AHFC single-family and condominium market share came from first-time homebuyers in FY2021. AHFC offers two programs and one loan option designed specifically for first-time homebuyers and a down payment assistance program for any borrower. Estimated total home purchases in the State of Alaska increased by 20.3% from FY2020 to FY2021. In the same period, loan production by AHFC has decreased by 25.0%. Historically low interest rates continue to push 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 (2020) estimated that the senior population (65+) in Alaska could grow from 12,000 to 22,000 by 2045 (low/high forecast scenario). In terms of total population, this represents a total senior population increase of 5-6% over the next 25 years. Senior housing remains a high priority for the Corporation. While funding for senior housing has remained stable in recent years, the Alaska senior population continues to grow. This places a demand on communities throughout the State to fund the growing gap between housing need and availability, in a market where there is also a gap between the rents achievable and the cost of building new senior housing units. 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 $611.1 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 30.0% on energy costs per unit. The 46,634 units, or 18.5% of eligible housing units retrofitted since 2008, have collectively saved an estimated annual 4.0MM BTUs (British Thermal Units).

Target #2: Maintain the AHFC general obligation credit rating. Methodology: A- = 15 / AAA = 22 Analysis of results and challenges: As of March 10, 2021, S&P Global Ratings reaffirmed the AA+ issuer rating of the Corporation, based on the following: 1. Large and high-performing loan portfolio of approximately $3.2 billion in primarily single-family and multi-family mortgage loans, with extremely low delinquencies of approximately 2.9% of total loans, below the housing finance agency median; 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 28.5%, well in excess of the 15.0% benchmark for the AA rating category; and 5. Experienced, proactive, and involved senior management and board of directors.

Target #1: Maintain or increase Adjusted Change In Net Position 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 December 14, 2021