Juneau -- A measure sponsored by Representative Carl Morgan (R-Aniak) makes two changes to the Rural Mortgage loan program that will greatly benefit rural Alaskans.

House Bill 93 would permit refinancing of Alaska Housing Finance Corporation rural home loans in the same manner any conventional mortgage allows. It also extends the definition of the term "housing" so that owner-occupied 4-plexes could be financed.

"Just over 1100 of AHFC's rural loans have interest rates over 8%; that's about $115 million dollars," said Morgan. "The current rate for a rural 30-year loan is 6.125%. If homeowners were able to refinance at these lower rates, it could put hundreds of dollars in buying power back into homeowners' pockets and the state economy every month.

"It is important to note that this bill does not permit any loans not allowed under conventional lending practices or industry standards," Morgan said. "It is not a "give-away" program. It does, however, attempt to allow the rural loan program to make the same kinds of loans allowed for any conventional urban loan program."

AHFC reports that over 1100 urban loans were refinanced in 1998, allowing homeowners to take advantage of current low interest rates with minimal transaction costs. HB 93 would allow the same type of opportunity for rural homeowners.

"This is an issue of fairness for rural borrowers. But it is also good business for AHFC," said Morgan. " Rural default rates are generally the same or lower than urban rates. These are good loans which will provide a financing opportunity that will be a great benefit to the rural housing market."