SENATE BILL NO. 233 "An Act relating to the teachers' and nurses' housing loan program in the Alaska Housing Finance Corporation; and providing for an effective date." Co-Chair Stedman reported that the bill is sponsored by the Governor and is before the committee for the first time. SB 233 repeals the sunset provision of the teachers' and nurses' housing loan program and expands the program to include all health care professionals. 10:18:50 AM BRYAN BUTCHER, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, explained how the program was initially established when SB 25 was passed five years ago. It was discovered that one of the problems with being able to recruit and retain teachers and registered nurses was finding housing. The idea behind this legislation was to allow 100 percent financing with no down payment so that entry level teachers and nurses could become homeowners. The largest obstacle to homeownership is the availability of cash for a down payment. Mr. Butcher explained that since 2003 there have been 373 teachers and nurses who have taken advantage of this program, with only one foreclosure. The program has been very successful. The bill eliminates the sunset date and expands the bill beyond registered nurses to other health care workers. It will have no additional cost to AHFC. 10:21:41 AM Co-Chair Stedman asked for more information on the expansion of health care professionals. Mr. Butcher reported that it was difficult to list all occupations without leaving out some, so language from another program was used: "Any person who is licensed or board certified by the state of Alaska in a health profession, holds a state certification in a health occupation, or is an administrator of a hospital or clinic, or employed as an aide, attendant, assistant, counselor, or technician in a health field." Anyone in the program would have to go through the mortgage criteria process. 10:23:19 AM DAN FAUSKE, CEO/EXECUTIVE DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, added that the bill is for people who don't have money; those who do have money don't go for AHFC loans. The program is geared for those coming out of college and just getting started on their careers. Alaska is ahead of the trend in attracting these professions to the state. The risks to AHFC are minimal, and the benefits are great. The legislation is accomplishing what it was intended to do. Mr. Fauske wished to see it continue. 10:25:40 AM Senator Olson noted the impressive record of only one foreclosure out of all the loans. He asked about including Public Safety personnel, in particular, Village Public Safety Officers. Mr. Butcher said they are already included in the rural program. He said the issue with adding more professions to the bill involves rating agencies on Wall Street believing that to be risky. They were opposed at first to the additional risk of adding health care professionals. Adding other occupations may be possible in the future. Mr. Fauske thought the other program addressed the public safety personnel well. Senator Huggins asked why Anchorage was not on the "Cumulative Purchases for Teacher/Nurse Option by Location" list. Mr. Butcher said it was, and the correct document was located. Senator Huggins thought there was a rapid turnover rate in teaching and wondered if a new teacher could assume the loan of a leaving teacher. Mr. Butcher said it could be sold to someone who also qualified for the loan. Senator Huggins looked at Wasilla where 19 people had taken advantage of the loan. He wondered how many had left since taking the loan. Mr. Butcher replied that it is difficult to track that information. Senator Huggins compared it to a "403 B of housing". 10:30:57 AM Co-Chair Stedman asked if the residence has to be a primary residence. Mr. Butcher said yes. It can not be used for an investment property. PAUL KAPANSKI, DIRECTOR, MORTGAGE OPERATIONS, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE, explained how it would work if someone moved from the state after four years and continued to make the mortgage payment. He explained that it would be difficult to track that information. A different insurance binder could be one way of knowing an individual has moved. He was not certain of the process beyond that. SB 158 was heard and HELD in Committee for further consideration.