New Mexico offers a balance of thrills — five national forests and eight ski resorts will keep any adventure-seeker busy — plus plenty of tranquility, with natural hot springs and stargazing-worthy skies. The state’s wide-open spaces looked especially attractive to homebuyers recently, with the median sale price of a home rising by more than 15 percent in the last year to $260,000, according to real estate brokerage Redfin.
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 (known as MFA), which helped nearly 2,900 families become homeowners in 2020. If you’re a first-time homebuyer, the agency can especially make the difference between continuing to rent or becoming a homeowner.
New Mexico first-time homebuyer loan programs
MFA FIRSTHome loan
To qualify as a first-time buyer, this doesn’t actually have to be your “first” time owning 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 New Mexico Mortgage Finance Authority’s FIRSTHome program, which can be used 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)
- At least $500 of your own money must be used to pay for the property
- Must complete pre-purchase homeowner counseling
- Must have an annual household income that does not exceed MFA limits, which vary based on location and number of members in the household ($65,880 to $144,440)
- Purchase price cannot exceed MFA limits, which vary across the state from $294,601 to $413,129
- Must be a single-family residence
- Cannot be used for income generation (i.e., not an income or investment property)
MFA NEXTHome loan
As its name implies, MFA’s NEXTHome loan isn’t solely for first-time homebuyers, so if you’re moving into your “next” home, it can be an option for you.
However, the program can also be a good match for first-time buyers with low and moderate incomes. The borrower requirements are similar to the ones for the FIRSTHome program, but the income and purchase price limits are the same regardless of location or household size:
- Household income limit: $91,000 statewide
- Purchase price limit: $340,000
New Mexico down payment assistance
MFA FIRSTDown down payment assistance
In addition to a FIRSTHome loan, 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 $8,000 in the form of a second mortgage to help. The second mortgage comes with a low interest rate and a 30-year term, and you’ll repay it just as you repay your first mortgage.
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 prior to buying — are identical to those of FIRSTHome.
MFA NEXTHome down payment assistance
If the NEXTHome program proves to be a good fit for your first home, you can also obtain down payment assistance with it, up to 3 percent of the amount of your first mortgage. There are no monthly payments on the assistance loan, and if you meet certain conditions, you won’t have to pay it back at all. Starting in year 11 of the loan term, 20 percent of the assistance will be forgiven until it’s entirely forgiven after 15 years. If you sell your home or refinance the first mortgage prior to that time, the assistance loan must be repaid.
MFA HOMENow down payment assistance
If you make less than 80 percent of the area median income (AMI) where you’re buying a home, the HOMENow program can get you up to 8 percent of the purchase price or $8,000 (whichever is less) to help with the down payment and closing costs. This is a second loan, but it’ll be forgiven after 10 years if you still own and occupy the property. You have to contribute at least $500 of your own money to the purchase in order to qualify.
HOMENow has limited availability, however, so be sure to contact MFA directly to verify its current status.
Other New Mexico homebuyer assistance programs
In addition to homebuying help from MFA, you might be able to find additional first-time homebuyer assistance depending on where you’re looking to buy.
In Santa Fe, for example, 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.
Where you do your banking can have an impact on your ability to find help, too. For example, the Kirtland Federal Credit Union 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.
Other first-time homebuyer programs
You can use Bankrate’s guide to first-time homebuyer loans and programs to 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.
For other New Mexico homeownership programs, including by city, visit HUD.gov.
Ready to start your journey to become a homeowner? First, see if you qualify for one of MFA’s programs by verifying income and purchase price limits in the area you’re hoping to call home. Then, browse the 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.