Recreational Property Loan Information

Following is information you may find helpful regarding Alaska USA's Recreational Property Loan Program.

Property criteria

The loan must be secured by a First Deed of Trust on the subject property. In addition:
  • Personal use: The property to be used as collateral must be for the personal recreational use of the member (generally not to exceed 10 acres). Property that could be used for commercial purposes or that is acquired for speculation/development will not qualify.
  • Public access: This criteria applies to both legal and physical access to the property. Consequently, any recreational property to be financed under this guideline must be accessible either (1) by road from a major population center using a standard passenger vehicle, or (2) by water from a public launch site using small water craft on a navigable waterway. The public launch site must be accessible by road from a major population center, the distance to the property must be reasonable and the waterway safe and reliable. (Fly-in locations and properties located long distances from the launch site or across unprotected water will not qualify under these criteria).
  • Market appeal: This criteria addresses the general long-term marketability (value) of the property. The property must be desirable to that segment of the general public having an interest in ownership of recreational property. Accordingly, properties having diminished appeal will not qualify under this guideline. Diminished appeal generally means lack of desirable amenities (such as water frontage, proximity to desirable fishing sites, etc.), poor condition of property or area, difficulties with access, or similar negative factors.
  • State locations:  Property must be located in the states of Alaska or Washington.

Available loan amount

Financing up to 75% of the lesser of the purchase price or value. 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

  • Appraisal: 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 15 years (180 months). The current 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 will be subject to change based upon market conditions.

Costs

The following costs may be incurred in obtaining financing: (1) Loan Processing Fee - $99; (2) Title Insurance Policy - Cost varies depending on loan amount and an as-built survey may be required if improvements are included in the property value; (3) BOV or Appraisal Fee - $400 to $750, depending on area; (4) Escrow Closing Fee - 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

If an improvement exists on the property and the value of that improvement must be included when determining that the loan-to-value limitation is satisfied, then hazard insurance, and if necessary flood insurance, will be required.

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.

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 10/4/2013