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.