If an Alaskan goes to a lender (bank, credit union or mortgage banker) for an Alaska Housing Finance Corp. mortgage or an Alaska Industrial Development Authority loan, these are the rates they will pay on a $500,000 business mortgage loan:
- AHFC will charge 6.375 percent for a fully amortized 30 year loan.
- AIDEA will charge 3.93 percent for a fully amortized 25 year loan.
Why is there such a difference?
By way of full disclosure, I was at one time the volunteer underwriter for the AIDEA’s off-road, Rural Business program. Good program, virtually no losses. I also authored the Multifamily Mortgage Loan program which AHFC adopted some decades ago.
Both AHFC and AIDEA are instrumentalities of the state of Alaska. That is, they are state agencies with mission statements to help Alaskans with lending. AHFC does housing loans. AIDEA does business loans including energy related loans. AHFC has an independent net worth of $1.5 billion, capitalized by the State’s General Fund in past appropriations.