Local News

USDA-RD extends waiver for Alaska cisterns

Responding to an appeal from Sen. Lisa Murkowski, the U.S. Department of Agriculture – Rural Development has agreed to continue exempting Alaska from a regulation that prohibits USDA housing loans for homes with water-catchment systems.

That rule has been on the books for a while, but it’s always been waived for Alaska. Last year, though, the federal agency ended the waivers, a move that would have had serious impacts in Alaska, where many homes are not connected to a city’s water service.

Roof catchment systems that funnel water into cisterns are common in Southeast Alaska, especially, where residents take advantage of the abundant rainfall.

Ketchikan real estate agent Mary Wanzer said most first time homebuyers take advantage of the USDA-RD loan program, because it doesn’t require a down payment.

“If the waiver allows someone to finance a home that’s on a roof catchment system, then it’s huge for Ketchikan and it allows more people to get into affordable housing,” she said.

However, she expressed concern that the waiver might cover cisterns, but not roof catchment systems. Wanzer said she has known homebuyers in the past couple of years who had to disconnect the roof system in order to qualify for a USDA loan.

Murkowski spokesman Matthew Felling said the waiver does apply to roof catchment systems, but USDA officials might initially require proof that a home’s water system can operate with delivered water only.

Wanzer said that roughly half of Ketchikan’s existing homes use cisterns.

“Anything past the airport north would be on a roof-catchment system; and anything south of basically Tatsuda’s would be on a roof-catchment system unless it was in the Mountain Point area, because Mountain Point has (its) own water and sewer,” she said. “So a large percentage.”

In a letter to USDA Rural Development Director Jim Nordlund, Sen. Murkowski noted that refusing loans for homes with cisterns would hurt low to moderate income borrowers who hope to buy a home.

In his response, Nordland writes that his agency’s regulation is similar to a standard adopted by the U.S. Department of Housing and Urban Development. However, HUD has waived that standard at least through March 27for parts of Alaska. So, as long as the HUD waiver remains in place, Nordland writes that the USDA exemption also will stand.

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