Alaska First-Time Home-Buying Assistance Programs & Grants
(Last Updated – 06/2025)
With its breathtaking natural beauty, clean air, and miles and miles of wilderness, Alaska, known as the Last Frontier, is a nature lover’s paradise. And it’s a good place to be looking for a home: As of April 2025, home prices in Alaska were up 3.7% from the year prior. But Alaska’s median home selling price of $385,700 still significantly beats the national median home sale price of $438,357, according to Redfin data.
As a first-time homebuyer in Alaska, you may qualify for a low-interest mortgage or help with the down payment. Here’s what you need to know.
Who Is Considered a First-Time Homebuyer in Alaska?
For a number of the state’s home mortgage loan programs, you’re considered a first-time buyer in Alaska if you haven’t owned a home in the last three years. You may also qualify if you meet U.S. Department of Housing and Urban Development (HUD) requirements, such as being a single parent or a displaced homemaker who has only owned a home with a spouse. Looking for the most budget-friendly spot to settle in this vast state? Check out a list of the best affordable places in Alaska.
2 Alaska Programs for First-Time Homebuyers
Offerings by the Alaska Housing Finance Corporation can give first-time homebuyers access to lower-interest-rate mortgages, or assistance with down payments and closing costs. Start here if you’re looking for different types of mortgage loans with the best interest rates in Alaska.
1. First Home Limited Loans
This program offers lower-interest-rate mortgages to first-time homebuyers. To qualify, you must meet income and purchase price limits and have not owned a home in the past three years, unless the property you plan to buy is within a targeted area or you are a qualified veteran.
• Targeted areas are HUD designated census tracts and have higher income and acquisition cost limits.
• Eligible properties include single-family homes, condominiums, duplexes, and certain manufactured homes.
• A duplex must be five or more years old and occupied for at least the last five years as a multi-family residence.
• Borrowers must read the tax-exempt booklet.
2. First Home Loans
First Home offers mortgages with reduced interest rates to eligible borrowers, but unlike the First Home Limited program, it does not have income or purchase price limits. To qualify, you must not have not owned a primary residence in the past three years.
• Eligible properties include owner-occupied single-family residences, condominiums, duplexes, and certain manufactured homes.
• At least one unit in a duplex must be the borrower’s principal residence.
Both of these AHFC programs offer multiple loan options providing lower interest rates. These include the:
• Affordable Housing Enhanced Loan
• Energy Efficiency Interest Rate Reduction
• Interest Rate Reduction for Low-Income Borrowers
• Energy Efficiency Interest Rate Reduction
• State Veterans’ Preference
You must meet certain income limits and participate in a homebuyer education course. To apply, contact AHFC-approved lender.
How to Apply to Alaska Programs for First-Time Homebuyers
If you’re a first-time home buyer in Alaska and you qualify for one of these programs, reach out to a lender who participates in that program to start your application.
Recommended: First-Time Homebuyer Guide
Federal Programs for First-Time Homebuyers
A number of federal government programs exist for people with low credit scores or limited down payment funds. Although they are sometimes for repeat homeowners, these national programs can be very helpful for people who are buying a first home or who haven’t owned a home in several years.
The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.
Federal Housing Administration (FHA) Loans
The FHA, a part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders participating in the FHA loan program. Loans offer competitive interest rates and require down payments of 3.5% of the purchase price. Borrowers typically need FICO® credit scores of 580 and up. A buyer with a score as low as 500 must put down 10% or more.
FHA loan limits in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties, with higher limits in high-cost areas.
In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 50% in some cases, vs. a typical 45% maximum for a conventional loan.
Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.
FHA loans always require mortgage insurance premiums (MIP): This includes a fee of 1.75% of the base loan amount, which can be rolled into the loan, upfront. Borrowers also carry annual premiums for the life of the loan. As of 2025, monthly MIP for new homebuyers is 0.15% to 0.75%. A down payment of at least 10% allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be about $137.
To learn more about these loans, including FHA loans for refinancing and rehabbing properties, read up on FHA requirements, loan limits, and rates.
Freddie Mac Home Possible Mortgages
Low- and very low-income borrowers may make just a 3% down payment on a HomePossible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.
The Home Possible mortgage is for buyers who have a credit score of at least 660. Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.
Fannie Mae HomeReady Mortgages
Fannie Mae, or formally, the Federal National Mortgage Association, is a publicly traded government-sponsored enterprise that dates back to the Great Depression.
Fannie Mae HomeReady® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.
For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .
Fannie Mae Standard 97 LTV Loan
The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.
Unlike an FHA loan, the 97 LTV loan has no upfront mortgage insurance fee and does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, and planned unit developments.
Department of Veterans Affairs (VA) Loans
Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. These loans designed for those who serve our country can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.
Another advantage of VA loans is that they do not require PMI for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.
Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.
Native American Veteran Direct Loans (NADLs)
Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.
US Department of Agriculture (USDA) Loans
No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.
The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA website .
HUD Good Neighbor Next Door Program
This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.
For more information, visit the HUD program page.
First-Time Homebuyer Stats for 2025
• Median home sale price in Alaska: $385,600
• 3% down payment: $11,568
• 20% down payment: $77,120
• Percentage of buyers nationwide who are first-time buyers: 24%
• Median age of first-time homebuyers: 38
• Median down payment for first-time homebuyer: 9%
• Average credit score in Alaska (vs. average U.S. score of 714): 709
Recommended: Mortgage Prequalification vs. Preapproval
Financing Tips for First-Time Homebuyers
In addition to federal and state government-sponsored lending programs for the first time homebuyer in Alaska, you might want to bone up on mortgage basics like how to choose mortgage term loans and how to lower your mortgage payment. These tips may help.
• Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. A first-time homebuyer, for the purposes of IRA withdrawals, is someone who has not owned a principal residence in the last two years. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.
• Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.
• 401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, within a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.
• State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.
• The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.
• Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home-buying education courses./p>
• Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.
Recommended: Use this home affordability calculator to see how much home you can afford to buy.
The Takeaway
There is plenty of opportunity for qualified first-time homebuyers in Alaska. The state offers programs that can help with the mortgage and down payment. Plus there are federal and conventional loans available that can assist you in your quest to purchase a home.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.FAQ
Should I take first-time homebuyer classes?
First-time homebuyer classes are required for some government-sponsored loan programs. And for everyone else, this experience is a great way to get acquainted with the home-buying process before you dive into your search in earnest.
Do first-time homebuyers with bad credit qualify for homeownership assistance?
Yes, often they do. Many government and nonprofit homeowner assistance programs are available to people who don’t have the highest credit scores. And often, interest rates and other loan pricing are competitive with those of loans available to borrowers with higher credit scores. That said, almost any lending program has credit qualifications. That’s why it’s important to take all possible steps to improve your credit standing before you go house hunting.
Is there a first-time homebuyer tax credit in Alaska?
No there isn’t, although the state does offer assistance for first-time homebuyers through several AHFC programs. Both offer lower interest rates and potential help with down payments. A federal first-time homebuyer tax credit, like one for $15,000 proposed by former President Joe Biden in the 118th Congress of 2023-2024, has not been enacted.
Is there a first-time veteran homebuyer assistance program in Alaska?
First-time veteran homebuyers can get help through the AHFC’s Veterans Mortgage Program, including a 1% interest rate deduction on the first $50,000 of the loan. Also, the U.S. Department of Veterans Affairs (VA) offers no-down-payment VA loans with no monthly MIP, and interest rates that are often lower than those on conventional loans.
What credit score do I need for first-time homebuyer assistance in Alaska?
Credit score requirements vary, depending on the homebuyer assistance program. For example, if you have a credit score of 580 or higher, you may qualify for a lower interest rate on an FHA loan.
What is the average age of first-time homebuyers in Alaska?
The average age of a first-time homebuyer has increased to 38, according to data from the National Association of Realtors®.
Photo credit: iStock/toddmedia
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