97% Loan-to-Value (LTV) Option

For many prospective homebuyers, saving up for a down payment is one of the biggest obstacles to overcome on the road to homeownership. AHFC's 97% loan-to-value (LTV) option helps to bring homeownership goals within reach.

How the 97% LTV Option Works

• The 97% LTV option makes homeownership more accessible by reducing the amount necessary for a down payment for those choosing an AHFC mortgage.
• The tradeoff for a smaller down payment is a bump to the monthly payment a borrower will make so prospective homebuyers should work with their lender to determine which option is the best choice for their situation. 
• The 97% LTV option can be layered with most single-family mortgage programs offered by AHFC, not just first-time homebuyer programs.
• Prospective homebuyers choosing AHFC for their mortgage will have a choice between the 97% and 95% LTV options. 

How to Apply

Contact an approved AHFC lender when you’re ready to evaluate your loan options.

Loan-to-Value Sample Scenario

Loan-to-value is a common term used by finance professionals to describe the ratio between a loan and the value of the asset, in this case a home.

In 2024, the average Anchorage home sales price with an AHFC First Home Limited or First Home loan was $404,359, requiring a minimum down payment of approximately $20,000. This upfront cost can be an obstacle for buyers who are able to afford monthly mortgage payments but struggle with the large upfront payment.

With the LTV ratio of 97% option, Alaskan homebuyers now can put 3% down while lending for the balance.

Depending on the interest rate of their loan, with a 3% down payment, buyers purchasing a home at a sales price of $400,000 could defer $8,000 upfront. This deferred cost is instead rolled into their loan, impacting the mortgage they’ll have to pay with a monthly increase of just more than $100. 

To accommodate the added risk AHFC takes on through financing at the higher LTV, there is a cost to the borrower. 25 basis points, or ¼ of 1%, is added to the annual percentage rate on these loans. View the graphic below to see an illustration of how this works. 

A Loan-to-Value Ratio indicates how a loan compares to the value of a home. In this example, the 97% LTV option would save a buyer about $8,000 up-front and the monthly mortgage would increase by $113 compared to the 95% option. An additional cost of 25 basis points or ¼ of 1% is added to the interest rate to address added risk to AHFC.

Example below is based on a $400,000 home sales price.

 

In 2024, Governor Dunleavy introduced, and the Alaska Legislature passed a bill that aims to make homeownership more accessible by reducing the amount necessary for a down payment for those choosing an AHFC mortgage. Governor Dunleavy signed House Bill 273 into law in July, 2024 and authorized AHFC to adjust the ceiling on its loan-to-value ratios for mortgages.