04/22/1996 02:32 PM Senate CRA

             CSHB 192(FIN) am AHFC HOUSING LOANS                             
                                                                               
 SENATOR TORGERSON brought CSHB 192(FIN) am before the committee as            
 the next order of business.                                                   
                                                                               
 BRYCE EDGMON, staff to Representative Richard Foster who is prime             
 sponsor of HB 192, said the legislation essentially brings statutes           
 for rural areas into compliance with urban areas.  He noted the               
 bill is supported by the regional housing authorities, as well as             
 the Alaska Housing Finance Corporation.                                       
                                                                               
 The primary change made by the legislation will enable regional               
 housing authorities to process loans and refinance applications               
 within their jurisdictions instead of having to go through a loan             
 examiner in Anchorage.  The legislation also reduces the age of               
 qualification for senior citizens from 60 to 55 for senior housing            
 programs.  Language was also added to ensure that regional housing            
 authorities are restricted to making loans only in their areas of             
 jurisdictions and that any AHFC loan programs must adhere to non-             
 discrimination statutes.                                                      
                                                                               
 Mr. Edgmon also presented a section-by-section analysis of the bill           
 and responded to committee members' questions.                                
                                                                               
 Number 270                                                                    
                                                                               
 SENATOR TORGERSON asked if a provision in the legislation puts the            
 AHFC in the water and sewer business.  KAY MURPHY, Mortgage                   
 Operations Director, Alaska Housing Finance Corporation, testifying           
 via teleconference from Anchorage, answered that it does not.  She            
 explained the funds that Alaska Housing would be using to                     
 supplement Federal HUD funds would be used to pay for off-site                
 water and sewer improvements, but AHFC would not take ownership of            
 those utilities.                                                              
                                                                               
 Number 285                                                                    
                                                                               
 SENATOR KELLY commented that if a regional housing is doing one of            
 these water and sewer projects, they can hook up to these                     
 individuals' homes and call that part of the project, but in                  
 developed areas, generally most homes have to assume that cost                
 themselves.  He observed AHFC is doing something for free that in             
 most urban developments the homeowner pays for.                               
                                                                               
 Number 315                                                                    
                                                                               
 BRUCE KOVARIK, Executive Director, Bering Straits Regional Housing            
 Authority and also representing the Association of Alaska Housing             
 Authorities, testifying via teleconference from Nome, voiced their            
 support for HB 192.  The legislation will allow regional housing              
 authorities to originate and service AHFC loans in rural areas; it            
 adds the outside water and sewer capability; it will allow more               
 activity for the supplemental housing grants; and it will provide             
 clarification and improvement of AHFC loan programs which affect              
 rural communities.                                                            
                                                                               
 Addressing Senator Kelly's concern with water and sewer projects,             
 Mr. Kovarik said more and more regional housing authorities find              
 themselves acting as private developers and being treated exactly             
 as private developers by both the Public Health Service and the               
 state of Alaska.  The bill doesn't add any more money to the                  
 program, but it gives them the flexibility for making those                   
 connections and making those off-site ties that are not currently             
 available with supplemental housing grants.  Additionally, the                
 authorities are limited by HUD with a total development cost for              
 their projects.                                                               
                                                                               
 Number 342                                                                    
                                                                               
 SENATOR KELLY asked what AHFC's delinquency rate has been in the              
 rural unincorporated areas.  KAY MURPHY responded their regular               
 rural loan program has averaged under 4 percent.  The rural program           
 has had delinquencies in the past, but the portfolio looks good now           
 as do the urban loans.  She said AHFC doesn't see them being any              
 higher risk than they do with the urban loans if they are properly            
 underwritten.  SENATOR KELLY said he just wanted to get that point            
 on the record because we continue to hear how the unorganized areas           
 of the state can't afford to pay property taxes, to fund education,           
 etc., and yet AHFC says they are having no problem paying their               
 mortgages.                                                                    
                                                                               
 Number 377                                                                    
                                                                               
 SENATOR TORGERSON noted Section 17 changes the age of seniors from            
 60 years of age to 55 years of age to qualify for these programs,             
 and he asked why the age limit was being lowered.  KAY MURPHY                 
 clarified that AHFC was not the party to institute that change, but           
 they do not anticipate that the decrease in the age limit will add            
 a lot of activity to their loan program or for the requests for               
 grant funds.  She also clarified to Senator Torgerson that the                
 declaration of age applies to AHFC's senior housing loan program              
 and its grant programs and doesn't distinguish between urban or               
 rural.                                                                        
                                                                               
 Number 418                                                                    
                                                                               
 JOHN BITNEY, representing Alaska Housing Finance Corporation,                 
 stated their support for HB 192.                                              
                                                                               
 Number 422                                                                    
                                                                               
 SENATOR TORGERSON stated it was his intent to hold HB 192 in                  
 committee until its next meeting so that the committee could take             
 a closer look at sections of the bill.