Residential Lot Loan Information

Following is information you may find helpful regarding Alaska USA's Residential Lot Loan Program.

Property criteria

The loan must be secured by a first Deed of Trust on the subject property. In addition:

• Property criteria: Properties must be intended for and suitable for construction of the member's future personal residence or must be located contiguous to the member's primary residence.
• Lot size: Must be of a size standard to the area (generally not to exceed ten acres).
• Service area: Must be on a publicly or community maintained road within the service area of a community with an Alaska USA office. It must be zoned for (if zoned) and located in a developed, predominantly residential area.
• Subdivision limitations: Qualifying subdivisions must be fully developed with all subdivision improvements completed and homes constructed or under construction on at least 10% of the properties in the subdivision. Alternatively, a property may be located in an area with a group of properties of 10 acres or less that is not a formal subdivision provided that they meet all other requirements. Commercial uses of any type on properties in proximity will disqualify the subject property.
• Utilities: Must have reasonable access to public water, sewer and electric service. Exceptions to public water and sewer may be allowed if the property is of adequate size to sustain a well and septic system, the site passes a percolation test, and it is determined that suitable wells have been drilled on properties in reasonable proximity to the subject property.

Available loan amount

Financing up to 60% of the property's value. If the loan is a refinance and the lot has not been owned for at least five years, financing may not exceed 60% of the original purchase price of the property. Subordinated financing by the seller will be acceptable provided that (1) the proposed terms are provided for review, (2) the financing involves monthly payments for the full term (no balloon payments, large lump sum payments, or call provisions), and (3) no prepayment penalties exist. A minimum down payment of 25% of the purchase price is required on purchase transactions, even if subordinate seller financing is involved.

Property valuation

An appraisal report no more than 90 days old, and from an approved appraiser will be acceptable. Typically, appraisals must be ordered by the credit union. Exceptions may be approved by an underwriter.

In all cases, no evidence may indicate that environmental contamination exists on or near the property.

Loan terms

Financing is available for a maximum term of 12 years (144 months), although a 20 year (240 month) amortization with a 12 year balloon is also available. The interest rates applicable to this loan program appear on the Rates page. The interest rate on the fixed-rate program will not change during the life of the loan. Call the credit union for current variable rates. As with other loan products, the interest rate available on new loans is subject to change with market conditions.

Costs

The following costs may be incurred in obtaining financing: (1) Loan Processing Fee - $99 (2) Appraisal Fee - $300 to $500; (3) Title Insurance - Cost varies depending on loan amount. (4) Escrow Closing Fee (if required) - Cost varies depending on loan amount. After the loan has been fully paid, a fee will be charged by the title company to remove the Deed of Trust.

Insurance requirements

Lots located in flood hazard areas may not be financed unless it is confirmed that flood hazard insurance is available in that community.

Borrower qualifications

To qualify, borrowers should have good credit histories. If there were past credit problems, there should be no ongoing problems or negative items in the credit record during the past 2 years other than minor entries. Total monthly obligations, including the proposed loan payment(s), should not exceed a reasonable percentage of gross monthly income. Acceptable percentages range from 30% to 60% depending upon a borrower's level of income. Every borrower's situation is unique and is reviewed accordingly.

Because this program is intended to serve those members acquiring or otherwise obtaining financing on a lot intended for the future construction of their personal residence, individuals already owning one or more other unimproved residential lots will not qualify. These loans are only offered on a limited basis. Consequently, only members using the credit union as their primary financial institution or otherwise having a significant relationship with the credit union will be eligible for this loan program.

If you have any questions about this program or wish to submit an application telephonically, please call 786-2800 in Anchorage, or (888) 425-9813 outside of Anchorage. Completed applications may be submitted at any branch office, faxed to (907) 786-2177, or mailed to Alaska USA's Real Estate Telephone Loan Center at P.O. Box 196613, Anchorage, AK 99519-6613.

Last updated 1/26/2009