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If you’re looking to buy a home in New Mexico but need help to do it, consider turning to the state’s housing finance agency, the New Mexico Mortgage Finance Authority (MFA), which offers several homeownership assistance programs. If you’re a first-time homebuyer, the MFA can especially make the difference between continuing to rent or becoming a person with property.
New Mexico first-time homebuyer programs
MFA FirstHome loan
To qualify as a first-time buyer, you don’t literally have to never have owned a home. Instead, you simply can’t have owned and occupied a primary residence within the last three years. If that describes you, you should look into the MFA’s FirstHome program, which you can use with an FHA, VA, USDA or HFA Preferred conventional loan.
- 620 minimum credit score (there are some exceptions for alternative credit qualifications if you don’t have a credit score)
- Must complete pre-purchase homeowner counseling
- Must have an annual household income that does not exceed MFA limits, which vary from $77,520 to $173,995 based on location and household size
- Purchase price cannot exceed MFA limits, which vary across the state from $507,849 to $637,644
- Must be a single-family residence
- Cannot be used for income generation (i.e., not an investment property)
To apply, contact an MFA-participating lender.
New Mexico down payment assistance
MFA FirstDown down payment assistance
In addition to a FirstHome loan, the MFA offers FirstDown, a down payment assistance program. Since coming up with the funds to cover upfront costs can be challenging for a first-time homebuyer, FirstDown offers up to 4 percent of the home purchase price to help. Given as a second mortgage, it comes with a low, fixed interest rate.
These funds aren’t available on their own, though; the FirstDown assistance must be combined with a FirstHome loan. The borrower requirements — credit score, income and purchase price limits and the need for homeowner counseling before buying — are the same as those of FirstHome.
To get started, reach out to an MFA-participating lender.
MFA FirstDown Plus down payment assistance loan
On top of the FirstHome and FirstDown first and second mortgage programs, the MFA offers FirstDown Plus, a third mortgage down payment assistance loan.
It gives borrowers $15,000 to spend on a down payment in the form of a 10-year, non-amortizing loan with a zero percent interest rate. No monthly payments are needed, and the loan will be forgiven at the end of the term — as long as the borrower doesn’t sell, refinance, move out or transfer the title before then.
You must use FirstDown Plus with FirstHome and FirstDown programs, and the combined amount between FirstDown and FirstDown Plus can’t exceed $35,000. The eligibility criteria are the same across all three programs.
For more information, get in touch with an MFA-participating lender.
MFA HomeNow down payment assistance
If you make 80 percent or less than the area median income (AMI) where you’re buying a home, the HomeNow program offers $7,000 to help with the down payment and closing costs. This is a second loan (and you’ll need to get the first one through the FirstHome program), but it’ll be forgiven after 10 years if you still own and occupy the property.
Along with the income requirements, this program is available to any first-time homebuyer who meets the following criteria:
- Credit score of 620 or higher
- Must purchase a single-family home within the program’s purchase price limits ($193,000 to $366,000, depending on location)
- Must make the home their primary residence within 60 days of closing
- Must complete pre-purchase homebuyer counseling
HomeNow has limited availability, however, so be sure to contact the MFA directly to verify its current status and find out how to apply.
DownPaymentAdvantage provides a $25,000 down payment assistance grant to borrowers who make less than 80 percent of their area median income. You don’t need to repay the funds, and you can combine the assistance with the FirstDown and HomeNow down payment assistance programs to receive up to a total of $35,000 in down payment assistance.
DownPaymentAdvantage has the same credit score and counseling requirements as the MFA’s other assistance programs. Its income and purchase price limits are the same as the HomeNow program.
To learn more, call an MFA homeownership representative at 505-843-6880.
Homewise Down Payment Assistance Program
Homewise, a community nonprofit organization, provides down payment assistance in New Mexico aimed at first-time homebuyers in the state’s third congressional district, which includes Santa Fe.
Under this program, hopeful homebuyers can receive up to $40,000 that goes toward the upfront costs of buying a home. The funds come in the form of a grant, so they don’t need to be repaid. To qualify, borrowers will need to meet income restrictions and credit requirements.
For eligibility criteria and application information, contact Homewise.
Santa Fe Community Housing Trust Mortgage Reduction Assistance Program
In Santa Fe, the Santa Fe Community Housing Trust has a down payment assistance loan program that offers up to $20,000 to certain buyers. The organization is focused on supporting veterans, special needs households, larger families, displaced homemaker-headed households and anyone earning less than 80 percent of the AMI.
Visit the organization’s website to learn more and fill out an application.
Kirtland Federal Credit Union Jump Start Down Payment Assistance Program
This financial organization offers qualifying members up to $6,000 of grant money — cash that does not have to be paid back — for down payment costs through its Jump Start program.
To qualify, you’ll need to:
- Be a member of the credit union
- Be a first-time homebuyer or not have owned a home in the previous three years
- Earn no more than $65,500 (for a one- or two-person household) or $74,750 (for a household of three or more) annually
- Contribute at least $500 of your own money
- Have a 30-year fixed mortgage
- Live in the house for at least four years
- Finish a homebuyer education course
Head to the Kirtland Federal Credit Union website to learn more about the program.
Other New Mexico homebuyer assistance programs
Rio Rancho Home Down Payment and Closing Cost Assistance Program
If you’re a first-time homebuyer in Rio Rancho, you may qualify for a zero-interest loan of up to $5,000. You can use the funds for a down payment and closing costs. You won’t have to repay the loan if you live in the house for at least five years.
To qualify, you must:
- Not have owned a home in the last three years
- Have a fully amortized, fixed-rate mortgage of up to 30 years
- Earn 80 percent or less of the median family income for Sandoval County
- Purchase a single-family home within Rio Rancho city limits that doesn’t cost more than 95 percent of the current FHA loan limit
- Complete a homebuyer education course
- Be a U.S. citizen (or have a co-applicant who is)
Interested in applying? Contact a local lender to get started.
Los Alamos County Homebuyer Assistance Program (HAP)
HAP provides no-interest loans to first-time and previous homeowners planning to purchase a house in Los Alamos County. If approved, you can put the money toward a down payment or certain closing costs, including title insurance and a property survey.
Loan amounts range from $8,000 to $25,000. You won’t need to make any monthly payments on the loan as long as you live in the home. However, you’ll need to repay the funds if you sell or move out.
Before you apply, make sure that you meet the following requirements:
- Have a credit score higher than 620
- Have a maximum debt-to-income (DTI) ratio below 45 percent
- Have a household income that’s no more than 80 percent of the Los Alamos County AMI
- Be able to contribute at least $1,500 to the down payment
- Buy a home with a purchase price of less than $440,480
- Complete a homebuyer training program
Download a HAP application to get started.
Other New Mexico first-time homebuyer programs
You can also explore other ways to make your purchase more manageable, including FHA, VA and USDA loans, which have either a low or no down payment and less strict credit requirements overall.
- FHA loans: With an FHA loan, your down payment could be just 3.5 percent — as long as you have a credit score of 580 or higher. Otherwise, you can still qualify with a score as low as 500, but you’ll need to put at least 10 percent down.
- VA loans: Designed for active-duty military personnel, veterans and surviving spouses, VA loans don’t require a down payment. There’s no official credit score minimum either, but most lenders expect a score of 620 or higher.
- USDA loans: If you’re a low- or moderate-income buyer planning to buy a home in a USDA-approved rural area, you might be eligible for one of these loans. Like VA loans, USDA loans are no-down payment mortgages.
Ready to start your journey to become a first-time homeowner? First, visit the MFA website and see if you qualify for one of its programs by verifying income and purchase price limits in the area you’re hoping to call home. Then, browse the agency’s list of banks, credit unions and mortgage lenders that are approved to offer these loans. Be sure to also have a firm grasp of where mortgage rates are today so you’ll know which lenders are offering you good deals.
To become an educated buyer, it’s also important to understand the process of buying a house in New Mexico. Research the local housing market where you’re planning to buy — whether that’s Albuquerque, Santa Fe or elsewhere in the Land of Enchantment.