Tax Cut Extension
HOMEBUYERS SAVE THOUSANDS OF DOLLARS WITH AHFC LOANS
ANCHORAGE, WEDNESDAY, FEBRUARY 22 - Before Christmas 2011, Congress passed the “Temporary Payroll Tax Cut Extension Bill”, stretching the tax cut by two months until the end of February 2012.
To finance the bill, supported by the Alaska delegation, Congress increased the guaranty fee that Fannie Mae and Freddie Mac are charging nationwide lenders to guarantee home loans. The decision is good news for Alaskan homebuyers thinking of using an AHFC loan for financing, since AHFC is exempt from the increase. Going with a loan from AHFC may save homebuyers thousands of dollars.
The payroll tax legislation directed at the housing market will result in an annual charge of at least 10 basis points that is equal to one tenth of one percent of the mortgage loan. This change is effective for all loans delivered to Fannie and Freddie at the beginning of the second quarter of 2012. This means that the cost of a $200,000 mortgage will go up about $11 per month. Over the life of a typical 30-year loan, these costs are estimated to be about $4,000. These changes will also increase the cost of FHA and VA loans, though the government has not yet released information about when these changes will go into effect.
“Keeping the housing market steady continues to be a top priority of AHFC and it is one of the reasons Alaska’s real estate industry remains strong while the rest of the nation is still deep in a recession,” Dan Fauske, AHFC CEO and executive director said. “AHFC is a trusted partner in real estate transactions; we offer education through our free eight-hour HomeChoice classes and we work directly with Alaska lenders to offer consumers products that are competitive. That’s good for Alaskans and Alaska.”
AHFC is a self-supporting public corporation with offices in 16 communities statewide. It provides statewide financing for multi-family complexes and single-family homes, with special loan options for low- to moderate-income borrowers, veterans, teachers, health care professionals, and those living in rural areas of the state.
AHFC also provides energy and weatherization programs, low-income rental assistance in 17 communities, and programs for the homeless and those seeking to become self-sufficient. AHFC has contributed more than $1.9 billion to Alaska’s state budget revenues through cash transfers, capital projects and debt-service payments.