Juneau -- The House Community and Regional Affairs Committee Tuesday passed out House Bill 93, sponsored by Representative Carl Morgan (R-Aniak).

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. According to Rep. Morgan, both changes will greatly benefit rural Alaskans.

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

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.

Community and Regional Affairs Co-Chair Representative Andrew Halcro (R-Anchorage) said he was so impressed by HB 93 that, after Tuesday's committee meeting, he signed-on as a cosponsor. "Passage of this legislation will provide an equal opportunity to rural residents who want to refinance their homes through AHFC," Halcro said. "We think they deserve this opportunity."

"With rural default rates running about the same or lower than urban rates, this is what they call a 'win-win' situation," said Morgan. "While it is an issue of fairness for rural borrowers, it is also good business for AHFC."

HB 93 now moves to the House Finance Committee for its consideration.