Plenty of sunshine year-round, unparalleled landscapes and a perfect mix of cultures – welcome to the Land of Enchantment. With a state nickname like that, it’s no surprise you’re looking for a new home in New Mexico.
But acquiring the keys to your home isn’t easy. You’ll need to save up for a down payment, navigate securing a home loan, and prepare for monthly mortgage payments and other housing expenses. While you may feel ready to own a home, your financial situation may not be up to speed. This is where first-time homebuyer programs are an immense help.
If you’re a first-time homebuyer in New Mexico, there are a slate of statewide and local homebuyer assistance programs available to help you make the purchase. There are major resources that can give you a hand with all the big-ticket items too, from setting you up with a low-interest, fixed-rate mortgage, to chipping in on your down payment and closing costs.
Read on to learn more about these programs, their eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in New Mexico?
For a quick clarification, a first-time homebuyer in New Mexico is defined as any family or individual who has never owned a home, or at least not in the past three years depending on the region. The statewide programs include anyone who hasn’t owned a home in the past three years, for example. It’s worth waiting it out if you’re nearing the three-year mark because these programs provide a significant financial boost.
As always, when you’re doing your research, read the fine print and any limitations we list below.
Statewide Homeownership Assistance Programs
Every state has its official housing authority that offers a series of homebuyer programs. In New Mexico, it’s the state’s Mortgage Finance Authority (MFA). Since 1975, the MFA has helped more than 65,000 low- and middle-income New Mexicans become homeowners. It also works with local lenders, local governments and tribal community groups to help homebuyers across New Mexico.
The MFA’s programs are tailored to help first-time homebuyers and repeat homebuyers across the state by providing competitive interest-rate mortgages, along with down payment and closing cost assistance.
Here’s a closer look at each of the MFA’s program’s details, how to apply as well as the fine print. Across the board, you’ll need to work with a participating lender in these programs. You can find the list of lenders working with the MFA here.
New Mexico MFA First Home Program
First Home is the MFA’s flagship program designed to help first-time homebuyers in New Mexico who have low to moderate incomes. Anyone who hasn’t owned a home in the past three years is eligible for this program.
First Home sets homebuyers up with 30-year fixed-rate mortgages at competitive market rates. It can be paired up with any of the programs below that help with your down payment and closing costs or as a standalone first mortgage.
Because the program is aimed at helping low- and middle-income households you must meet income limits set by your county. There are also purchase price limits you must stick to – they’re also set according to the county or region in New Mexico. Furthermore, the home must be used as your primary residence.
Homebuyers must have a credit score of at least 620 and you must contribute at least $500 of your own funds towards your purchase. Finally, you’ll also need to complete a homebuyers’ education course, which is a standard protocol for the majority of these statewide homeownership assistance programs. In this case, your pre-purchase counseling is done via the MFA’s online program, called eHome, and can be completed at your own pace. Check out the online course here.
New Mexico MFA First Down Program
Is coming up with the funds for your down payment the only thing getting in the way of your homeownership dreams? If that’s the case, the MFA’s First Down program may be the perfect solution.
First Down provides eligible homebuyers with a fixed-rate second mortgage that covers your down payment and closing costs. It must be used in conjunction with the First Home program so you’ll also get help with arranging a low-interest first mortgage.
The program is only available to first-time homebuyers and repeat homebuyers who haven’t owned a property in the past three years. If you’re eligible, you can receive up to $8,000 in down payment assistance via a loan with extended repayment terms and a low interest rate. Instead of having to save up for a lump sum down payment, you’ll repay this loan alongside your mortgage every month.
Your credit score still needs to be 620 and you must complete the homebuyers’ education course.
Once again, this program is aimed at helping families who are in low- to moderate income households, so income limits apply. Purchase price limits are also a requirement.
You can access all the requirements, including household income limits and purchase price limits on MFA’s page dedicated to the First Down program here.
New Mexico MFA Next Home Program
Completing the trio of homebuyer initiatives provided by the MFA is the Next Home program, which cobbles together the first two programs above.
With Next Home, you’ll secure a 30-year fixed-rate mortgage set at a lower interest rate – and you can take out a second loan worth up to three percent of your first mortgage loan amount. The second loan can be used for your down payment, closing costs or any other expenses tied to your move including fees for appraisals, inspections or a title search.
The only difference is that the second loan requires no monthly payment and can be forgiven if certain conditions are met. There is a single maximum household income limit set for the entire state, which is $91,000 and a single purchase price limit of $340,000.
It’s available to everyone, including repeat homebuyers.
The same eligibility criteria applies: you’ll need to contribute at least $500 of your own funds towards your home purchase, you must have a minimum credit score of 620, and you must complete an online homebuyers’ education course organized by the MFA.
Homebuyer Programs by Location in New Mexico
While the statewide programs listed above can give you a leg up on your journey to homeownership, there are other local homebuyer assistance programs across New Mexico worth doing your research on, too.
Read more for our list of local programs.
If you’re shopping for a home in Albuquerque, you’re in luck – not only does the city have the largest selection of homes in the state, but there are also a handful of resources to help first-time homebuyers and anyone looking for affordable housing.
For starters, the city of Albuquerque provides free homebuyer counseling if you’re in the stages of buying a home and mortgage counseling if you’re behind on your mortgage.
You can view the full range of services available on the city of Albuquerque website. It also points to city resources, such as the Family Housing Development Corporation, which provides financial assistance to low-income homebuyers. Additionally, there’s the Sawmill Community Land Trust, which is a non-profit group that owns and holds land “in trust” to benefit the community and provides affordable housing options for homebuyers.
There’s also the United South Broadway Corporation that provides services, including foreclosure prevention, housing counseling, legal representation if necessary, and court mediation. Check out the USBC’s website here.
If you’re house hunting in Gallup, it’s worth checking in with the Native Partnership for Housing. The NPH provides housing assistance help for Native and non-Native clients across all of New Mexico. Please note its headquarters are in Gallup.
The organization provides financial education and counseling for homebuyers along with flexible and affordable mortgages and down payment and closing cost assistance.
The NPH’s loan staff will work with you to pre-qualify you for a loan and advise you of potential loan limits, interest rates, loan payments, and down payment requirements.
You can read more about the Native Partnership for Housing’s loan programs, on its official website, including home repair loans and refinancing, and down payment assistance.
Homebuyers with their sights set on buying a home in Las Cruces should keep the city’s home rehabilitation programs in mind, especially if they’re buying a fixer-upper.
Las Cruces sponsors two programs to help low- and moderate-income households with sprucing up their homes. The first is a zero percent loan or grant to fund the needed home improvements that address health and safety issues on the property; the second provides funding to mobile homeowners who need financial assistance to have a ramp constructed to make the property wheelchair accessible.
The city’s funding amounts are dependent on financial need and are assessed on an individual basis. You can read more about the programs and download an application on the Las Cruces city website. Their site also lists other grant-funded programs aimed at helping low-and moderate-income residents.
Los Alamos County
Homebuyers ready to move their families to Los Alamos County have the help of the region’s Housing Partnership’s Homebuyer Assistance Program. The program is fairly comprehensive, helping you with every step of the way; this includes walking you through the mortgage application process and connecting you with local mortgage providers. These individuals can ensure you secure good terms for your loan, and even review your home inspection report to make sure your purchase is in adequate condition.
Financial assistance is also on hand: the county provides deferred payment loans at zero to two percent to help homebuyers with their down payment and closing costs – to a maximum of $25,000, or 10 percent of your home’s purchase price. No monthly payments are required – you will not be required to repay the loan until you move or pay off your first mortgage.
All homes, including detached homes, duplexes, triplexes, townhouses, condos and manufactured homes on a permanent foundation are applicable.
The program isn’t just for first-time home buyers, either.
To qualify, you must be a Los Alamos County resident or must purchase a property within the county’s limits. You must have a good credit score and fall under the maximum debt-to-income ratio. Additionally, you are required to complete a homebuyers’ education course including a two-hour training session in person in Los Alamos, and contribute a minimum of $1,500 to your down payment.
Check out the full details of the Homebuyer’s Assistance Program, including how to apply, on the Los Alamos Housing Partnership’s website.
If you’re house hunting in Rio Rancho, you will be glad to know the city offers the Home Down Payment and Closing Cost Assistance Program, geared specifically at helping first-time homebuyers.
The program provides a zero percent interest loan to low-income households to help with their home purchase. No more than 50 percent of the required down payment and closing costs are covered by the loan, up to a maximum of $5,000. If you use the home as your primary residence for five years, the loan is completely forgiven.
Check out the program’s full details on the city of Rio Rancho’s website.
Homebuyers ready to set down roots in Sante Fe have generous help on the way to assist with the down payment on their dream home.
Sante Fe County runs a Down Payment Assistance program in the form of a zero percent interest deferred payment loan worth up to $20,000. To be eligible, you must have a household income at or below 65 percent of your area’s median income. Up to $15,000 is available for households with an AMI of 65 to 80 percent: up to $10,000 is available for households with 80 to 100 percent of your region’s AMI. You will be required to repay the loan when you move or when you pay off your first mortgage.
To apply, complete an application form online providing your household income, the home’s purchase price along with your expected housing expenses. You must be a first-time homebuyer approved for a mortgage and you must have completed a homebuyers’ education course. The county’s Loan Review Committee will then assess your application.
The county also offers a Housing Choice Voucher Homeownership Program, which helps families shift their rental assistance towards a mortgage so they can become homeowners. Only families who are currently receiving the Housing Choice Voucher rental assistance are eligible. You can read the eligibility requirements here.
The Sante Fe Community Housing Trust also operates its own programs to help potential homebuyers secure the keys to their own home. It accepts loan requests of up to $20,000 to help with a down payment or closing cost expenses. The website notes that the priority is on helping veterans, special needs households, larger families, single moms, and lower income applicants earning less than 80 percent of the area median income.
To get started, you need to connect with a Housing Trust counselor who will take stock of your individual financial situation and what you’re looking for in a home. You must bring provide copies of your last three paycheck stubs, copies of your income tax returns for the past three years, a recent credit report and proof of your assets.
The counselor will provide you with expert advice about your credit and finances to help you put your best foot forward with lenders. Your contact can even work with your realtor or lender on next steps. They’ll also assess your loan eligibility.
Learn more about the Housing Program on the Housing Trust’s website.
Ready to Buy a Home in New Mexico?
Whether you’re house hunting in Albuquerque or you’re thinking of moving to Sante Fe, New Mexico is a stunning state to call home with its affordable costs of living. Plus, you can find peace of mind in the safest New Mexico cities.
You’ll also be treated to a wide variety of homes, as the real estate market is varied – you can zero in on homes tucked away in suburban communities or live just a stone’s throw away from incredible hiking trails or rock-climbing routes. There are even homes in the middle of the desert if you’re looking for a homesite with some solitude.
And wherever you decide to hunker down, there are multiple programs to help you secure your home purchase.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Other New Mexico Resources
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.