Committee hears proposal to raise AHFC rural loan cap to $400,000; members ask AHFC to attend follow-up

House Bill 226, presented to the House State Affairs Committee April 7 by staff to Representative Foster, would raise the AHFC rural loan cap from $250,000 (unchanged since 2002) to $400,000. Paul Labold, staff for Representative Foster, said the $250,000 cap has not been adjusted since 2002 and that $400,000 remains below inflation-adjusted cost estimates for modest rural development.

Kim Genicole, testifying from Nome, said she benefited from AHFC’s first-time homebuyer program and urged the committee to raise the cap or give AHFC board authority to adjust the cap to reflect rising construction costs; she said HUD-published development costs in her region are approaching $240,000 for modest homes and emphasized the bill "does not impact the state budget" because AHFC is self-supporting and pays dividends to the general fund.

Committee members pressed staff on why the draft sets $400,000 rather than a different number or indexing to inflation. Paul Labold said the $400,000 figure originated with a constituent suggestion (Melanie Behnke) and that sponsor staff had not chosen $450,000 (the inflation-adjusted figure) but were open to alternatives. Members also raised the fiscal-note mechanics: increasing the cap would lower AHFC revenue from higher-interest loans and could reduce dividends the corporation returns to the legislature. Staff noted the fiscal note projects a reduction in dividend revenue in later years and recommended inviting AHFC to explain the financial mechanics.

Chair Kerrick set an amendment deadline of 5 p.m. Wednesday, April 8, and said she intends to call AHFC to provide detailed fiscal analysis at a follow-up hearing planned for Thursday. Members signaled interest in either enabling the AHFC board to adjust the cap or in alternative amendment language that would prevent repeated, near-term legislative fixes.