Legislature(2003 - 2004)
02/24/2003 01:30 PM Senate HES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 25-AHFC LOANS TO EDUCATORS
CHAIR FRED DYSON said that SB 25 would be up for consideration.
SENATOR GARY WILKEN noted that a committee substitute labeled
23-LS0080\H, dated 2/21/03, was prepared. It designates single-
family housing only on line 9, and sets out who is covered on
lines 11 - 14. A provider of related services is covered but
not named in the bill, but it includes physical therapists,
occupational therapists, speech therapists, librarians or a
school nurse as long as they possess one of the state-required
certificates.
SENATOR WILKEN moved to adopt the committee substitute. There
were no objections and it was so ordered.
MR. BRIAN BUTCHER, legislative liaison, Alaska Housing Finance
Corporation (AHFC), said he was present to answer questions.
SENATOR LYDA GREEN said she had concerns about the lack of
requirements in the bill. It contains no requirement that need
be established, no limit on location, no requirement to continue
teaching, no limit to a one-time only loan, no first-time buyer
limitation, no age factor and no upper limit on price. She asked
if those things are in the terms and conditions mentioned on
page 2, paragraph (b), or whether they have to be spelled out in
the bill.
MR. PAUL KAPANSKY, director, Mortgage Operations, answered that
the department envisioned the program would overlay its existing
programs. For example, if the individual borrower qualified for
the first-time homebuyers program, he would also meet the
requirements of this program and be able to get a loan for 100%
loan to value. It would work the same for the veterans and rural
programs.
SENATOR GREEN asked if there is any requirement in the
legislation that it pertains to first-time buyers and whether
that language needs to be in statute.
MR. DANIEL FAUSKE, Executive Director, AHFC, explained that
typically, people will qualify for a number of different
programs and then they decide which one they want to use. This
bill removes the need for a down payment because a major
impediment for most people when purchasing a home is the down
payment requirement.
He said the issue of what to do if a borrower quit the teaching
profession was discussed internally and it was decided that
would be very hard to police. Their rural lending program
requires that a teacher be housed in each one of the units,
whether it's a duplex or a four-plex, and AHFC has the option of
increasing the interest back up to what it would have been if
that requirement isn't met.
SENATOR GREEN asked what the upper limit is on the amount of the
loan.
MR. FAUSKE replied that depends on what a person can afford to
borrow.
SENATOR BETTYE DAVIS asked if land had been identified in
various areas where these houses could be built.
MR. FAUSKE replied that they hadn't envisioned this bill as
covering going out and building homes.
SENATOR DAVIS asked if he was saying that land was too
expensive.
MR. FAUSKE elaborated that he was working with the Denali
Commission and the U.S. Department of Agriculture to find
available funding for land, but one has to consider the
infrastructure that is needed for development as well and that
is a factor in many rural areas.
SENATOR WILKEN asked if this is a one-time only bill. He gave
the example of a teacher moving to Fort Yukon to teach and
buying a home under this bill and then moving to teach in
Fairbanks. He wanted to know if he would have to use the assets
built up on the first loan to finance the new one.
MR. FAUSKE replied that he thought that teacher would be able to
use this program again.
SENATOR GREEN said she didn't think a person would have any
equity in two years with a "no-down."
MR. FAUSKE agreed.
MS. OSSIANDER said the AASB's top priorities are fair and
equitable funding and providing ways to help with teacher
recruitment and retention. At its meeting yesterday, the AASB
unanimously supported this bill.
MR. ROSE indicated his support also.
SENATOR WILKEN moved to pass CSSB 25(HES), version 23-LS0080\H,
from committee with individual recommendations. There were no
objections and it was so ordered.
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