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 helped 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 person with property. 

New Mexico first-time homebuyer loan 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 New Mexico Mortgage Finance Authority’s FIRSTHome program, which can be used with an FHA, VA, USDA or HFA Preferred conventional loan.

Borrower requirements:

• 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 from $73,200 to $164,335 based on location and number of members in the household

Property requirements:

• Purchase price cannot exceed MFA limits, which vary across the state from $349,526 to $440,480
• Must be a single-family residence
• Cannot be used for income generation (i.e., not an income or investment property)

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 4  percent of the home purchase price to help. Extended in the form of a second mortgage, it 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 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 offers $7,000 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.] This program is available to anyone that meets requirements, regardless of first-time buyer status.

HOMENow has limited availability, however, so be sure to contact MFA directly to verify its current status.

MFA DownPaymentAdvantage

DownPaymentAdvantage provides a $25,000 down payment assistance grant to borrowers who make less than 80 percent of their area median income. The funds don’t need to be repaid, 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.