Depending on who you ask, Alaska may be the most beautiful state in these United States boasting beautiful mountains, vast stretches of untouched wilderness and northern lights in the sky. You can’t go wrong settling down in the Last Frontier, so whether you want to be tucked up in the mountains, or down in the valleys closer to the salmon runs, Alaska is a great choice for those craving a connection with the great outdoors.
If only buying a home was as peaceful as actually living in Alaska. To make your home buying process easier and more affordable, consider choosing an FHA loan to finance the home of your dreams in Alaska.
Why consider an FHA Loan in Alaska
Despite the population density in Alaska being the lowest in the country, over $19 million FHA loans were granted as of 2019. Alaskans trust the FHA loan program when purchasing their family homes, and rightfully so when you consider the benefits of an FHA loan.
Benefits of FHA Loans in AK
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Alaska
While there is a maximum loan limit on Alaska FHA loans, the limit varies depending on where you live and is adjusted every year. The maximum loan limit ensures most people can qualify for the loan.
In most of Alaska, the baseline limit of $472,030 applies, but in a place like Anchorage and Ketchikan, the limit is higher to account for the higher cost of real estate in the cities. Check out the link below for a full list of Alaska FHA loan limits.
Are You Eligible for an FHA Loan in AK?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in AK?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.