Financing with a Contract
Financing with a State Land Sale Contract
DNR offers financing through land sales contracts. A contract is different from a mortgage in that the buyer fails to earn equity in the land during the life of the contract. If the buyer fails to make payments, or defaults on the contract in other ways, DNR retains all monies paid to that point and retains ownership of the land.
Land sale contracts can be issued for land purchases over $2,000. The interest rate is set by regulation at 3% plus the prime rate at the time the contract is written and is fixed for the life of the contract. The length of the contract depends on the amount being financed as follows:
- $2,000.00 or less must be paid in full at time of purchase;
- $2,000.01 to $9,999.99, contract length is 5 years;
- $10,000.00 to $14,999.99, contract length is 10 years;
- $15,000.00 to $19,999.99, contract length is 15 years; and
- $20,000.00 or more, contract length is 20 years.
You will be ineligible to enter into a purchase contract with DNR, under 11 AAC 67.008, if you are in default to DNR for nonpayment on a purchase contract or lease issued by DNR, have had a contract terminated in the past three years, or are in default for nonpayment of municipal taxes on property under purchase contract. If you are ineligible, you must pay in full at the time of the purchase to be able to purchase land from DNR.
Once you have signed a State of Alaska land sale contract, you have entered into a legal, binding contract. Your money will not be refunded if the contract is in default, has been relinquished, or is otherwise terminated.
Important: The State of Alaska does not allow early entry for development activity until the sale contract or patent is issued. Please contact the Land Sales and Contract Administration Section at (907) 269-8594 for additional information.
For details and legal authority, see Alaska Statute 38.05.065 and Alaska Administrative Code 11 AAC 67.875-.880.