"Does Alaska's Permanent Fund Dividend Count Toward the Mortgage You Qualify For?"

On October 1, a deposit from the State of Alaska landed in bank accounts across the state on the same morning. The Alaska Beacon reported that this year's Permanent Fund Dividend is $1,200 a person: a $1,000 dividend plus a $200 energy relief payment. If you are buying a home in Alaska this fall or winter, that deposit is probably on the same bank statement your lender is about to read.

Yes, your Alaska Permanent Fund Dividend can count toward the mortgage you qualify for. No agency guide names it, so the underwriter applies the general rules for other income: a documented history of receiving it, usually shown on your tax returns, and no sign that it is about to stop. The Legislature resets the amount every year, so expect it to be averaged.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, including Alaska, NMLS #483943, through C2 Financial Corporation. The dividend is one of the few kinds of income that only an Alaska resident can have, so I'll walk you through what it does on a mortgage application.

Does the Permanent Fund Dividend count as income for a mortgage?

It can. None of the big loan programs gives the dividend a line of its own, so the underwriter treats it like any other income that doesn't come from a paycheck or a business. Freddie Mac's Seller/Servicer Guide covers that case with the phrase "income types not specifically addressed in this section," and Fannie Mae's Selling Guide and FHA's income section work the same way.

All three guides ask for the same things. You'll need a documented history of receiving the dividend, an amount that has been fairly consistent, and a good reason to expect it to keep coming. FHA puts a number on that last part, saying income must be "reasonably likely to continue through at least the first three years of the Mortgage." FHA's closest heading for the dividend is government assistance programs, which also asks the lender to verify the payment with the agency that sends it.

For you, that comes down to paperwork. The underwriter reads your file, decides whether the dividend looks like it will keep coming, and works from what you have documented. The tax returns and statements I list below are what the underwriter uses to decide.

The monthly figure an underwriter works from

The dividend arrives once a year, and a debt-to-income ratio is a monthly calculation. So the underwriter converts it to a monthly figure, and because the amount changes every year, the underwriter usually looks at more than one year before choosing that figure.

The IRS page that clarifies the dividend's tax treatment notes that the entire $1,702 payment for 2024 was taxable. The PFD Division's tax page puts the 2025 dividend at $1,000, and the 2026 payment is the $1,200 above. That is three different figures in three years, set by the Legislature through the state budget each time.

Freddie Mac's factor list asks about "the consistency of the amount of income," and a figure that swings by hundreds of dollars invites the underwriter to look at more than one year. Freddie Mac handles dividend and interest income from investments by averaging the most recent two years over 24 months. You can expect a similar approach here, and a careful underwriter is likely to notice when the newest year is lower than the ones before it.

The size of the result matters too. A $1,000 dividend divided by twelve comes to about $83 a month. That will not double what you qualify for. It can help when your ratio is close to where you want it, and on a file for a couple who both have dividend history, it counts twice.

If you would like to see how your debt-to-income ratio is figured, that page walks through what goes on each side.

Staying eligible, and why it matters to the three-year test

All three guides come back to one question: will the dividend keep coming? That depends on you staying eligible under Alaska's own rules, and those rules are simple for a client who lives in Alaska and plans to keep living there.

Alaska Statute 43.23.005 asks you to be an Alaska resident on the day you apply and for the whole calendar year before it. The PFD Division's absence guidelines let you be out of the state up to 180 days in a calendar year for any reason, as long as you keep your Alaska residency and intend to return to stay. Longer absences are allowed only for the reasons the law lists, such as full-time school.

You also apply again every year, and the PFD Division closes each year's application window on March 31. A dividend you received last year does not file next year's application for you.

If you are buying a home in Alaska to live in, and you have applied every year, the underwriter has good reason to expect the dividend to keep coming. If you are planning a long assignment outside the state, or your most recent application is still under review, please tell me early so we can decide together whether the dividend belongs on your application.

The documents that show your dividend history

The dividend is federally taxable and reported on its own line, so your tax returns already carry most of the proof. The IRS directs filers to report the dividend on line 8g of Schedule 1, and a child's dividend is the child's income, which may need its own return.

When you're ready, please provide your complete federal income tax returns, all pages and schedules, please, including Schedule 1. We will need the past two years, so the underwriter can see the dividend reported each year.

Please also provide the 1099-MISC the PFD Division issued for each of those dividends. The Division's tax page says you can view and print it from your myPFD account. If your most recent dividend landed after your last filed return, the bank statement showing the October deposit fills that gap. For any statement, please provide all pages, even if the last page is intentionally left blank.

Two more points about the paperwork. Because the dividend is taxable, there is no "gross-up" for it. That adjustment, which FHA and Freddie Mac allow for income that is exempt from federal tax, does not apply here. And if you file a joint return, Schedule 1 shows your dividends as one combined figure. The 1099s show each person's dividend separately, and the underwriter counts only the dividends paid to the clients signing the loan.

If you are moving to Alaska, the dividend comes later

The eligibility rule works on full calendar years, which matters if you are relocating. If you move to Alaska and start a new job in March 2027, your first full calendar year as a resident is 2028, so the first dividend you can apply for is the one you file for in early 2029.

That means a newcomer's mortgage application in Alaska has no dividend history to show. Your qualifying income comes from your new job, and the Alaska pre-approval page covers the two questions worth settling before you make an offer. The dividend becomes part of the picture a few years in, when you are refinancing or buying your next home.

Common mistakes with the dividend on an application

Each of these is easy to avoid once you know it, and each one saves you a second request for paperwork.

Counting the whole family's dividends. A household with two adults and two children received four dividends. Only the adults on the loan have dividend income that counts toward qualifying, and the IRS treats each child's dividend as that child's own income.

Using this year's amount as the monthly figure. If you divide this year's $1,200 by twelve, you get $100 a month, which is probably not the figure the underwriter will use. The underwriter will likely average the last two years, and that average can come out higher or lower than this year's payment, depending on the years. In the example below, the 2024 and 2025 dividends average $112.58 a month per person, which is higher than this year's $100.

Leaving out the 1099-MISC. The tax return shows a total on Schedule 1. The 1099 shows whose dividend it was and when it was paid, and having it in the file saves a second request.

Listing it when the file is already strong. Income is elective on your application. If your ratio is comfortable without the dividend, leaving it off means one less thing to document. If the dividend helps, we include it and document it fully.

Forgetting the deposit is also an asset. A family's October deposit can be large. Fannie Mae's rule for large deposits asks the lender to document the source of any single deposit over half of your monthly qualifying income, if you need those funds to close. The myPFD record and the 1099 explain it in one step. The bank statement guide covers how that paper trail works.

An example with the numbers worked out

The dividend amounts here are the real ones above. Everything else is made up to show the mechanism.

A married couple in Fairbanks are buying their first home together. Both have lived in Alaska for years and received the 2024 and 2025 dividends. Their wages come to $9,000 a month combined, and their proposed housing payment plus other monthly debts adds up to $3,600.

2024 dividend, one person          $1,702.00
2025 dividend, one person          $1,000.00
                                   ---------
Two-year total                     $2,702.00
Divided by 24 months                 $112.58
Both of them on the loan             $225.17 a month

Wages                              $9,000.00
Plus dividends                       $225.17
                                   ---------
Qualifying income                  $9,225.17

Debt ratio without dividends          40.0%
Debt ratio with dividends             39.0%

The dividends move this couple's ratio by about one point. At the same 40% ratio, $225 a month of extra income supports about $90 more in monthly payment. They could use that for a slightly higher price, or just keep a little more room in the ratio.

The couple's 2026 dividends, $1,200 each, landed after their last filed return. The October deposit on their bank statement shows them, and an underwriter can see that the newest year is higher than 2025 and lower than 2024. Neither figure changes the two-year average the underwriter worked from.

If they were buying a home where the property tax depends on the borough or city, the monthly tax would go into their housing payment, and it would land in the same debt ratio as the dividend income.

Your next step on an Alaska home

If you are getting ready to buy, the rate tool is here when you want to see your own numbers, with closing costs built for Alaska rather than a national average. Using it does not involve a credit pull or an account, and nobody will call you. You can choose a rate option there, and your selection can change later.

For the wider picture of buying in the state, the Alaska mortgage page covers how closing works here. If you would rather talk it through first, calls are welcome. I'm happy to look at your dividend history and your other income with you and tell you whether the dividend is worth putting on your application.

If you also receive other income, such as dividend and interest income from your own investments, that has its own rules. This explains why lenders ask for two years of income history on nearly every kind of income.

Estimates and educational information are not a loan approval or commitment to lend. Final approval depends on the property, the appraisal and underwriting of the complete file.

Common questions

Can I use my Alaska PFD as income to qualify for a mortgage?

Yes, in most cases. No Fannie Mae, Freddie Mac or FHA guide names the Permanent Fund Dividend, so the underwriter applies the general rules for other income. Those ask for a documented history of receipt and no sign the income will stop. Your complete federal tax returns for the past two years, showing the dividend on Schedule 1, line 8g, plus the 1099-MISC for each year, usually carry that history.

How do lenders calculate the Permanent Fund Dividend as monthly income?

The dividend is paid once a year, and the Legislature sets a new amount each year, so an underwriter usually looks at more than one year before settling on a monthly figure. Averaging the last two years over 24 months is the approach Freddie Mac uses for investment dividends, and it fits the PFD well. The 2024 and 2025 dividends were hundreds of dollars apart, which is why one year alone rarely settles it.

Do my children's PFDs count toward my mortgage income?

No. The IRS treats each child's dividend as that child's own income, and only income paid to the clients signing the loan counts toward qualifying. The adults on the loan can each count their own dividend history. A family's combined October deposit can still matter as money in the bank, which the lender may ask you to explain if you need it for closing.

Is the Alaska Permanent Fund Dividend grossed up for a mortgage?

No. A gross-up is an adjustment the lender may apply to income that is exempt from federal income tax, and the PFD is taxable. The IRS says the full payment, including any energy relief portion, is taxable to adults and children and is reported on Schedule 1 of Form 1040. The amount the underwriter uses is the dividend itself, converted to a monthly figure.

I just moved to Alaska. Can my PFD help me qualify?

Not yet. Under Alaska Statute 43.23.005 you have to be a resident for the whole calendar year before you apply, so your first dividend comes after your first full calendar year in the state. A newcomer qualifies on wages and other income, and the dividend becomes part of the picture once you have received it for a couple of years.

What could stop an underwriter from counting my PFD?

Anything in the file that suggests the dividend will not continue. That includes a long absence from Alaska beyond the 180 days the PFD Division allows for any reason, a plan to move out of state, or a dividend application that was denied or is still under review. A client buying a home in Alaska to live in, with a steady record of applying each year, gives the underwriter a consistent picture.