A Guide To First-Time Home Buyer Loans In New Mexico

Have you been looking for that perfect abode in The Land of Enchantment? Maybe it’s your first home purchase and a state with a vibrant art scene and breathtaking landscape is at the top of your list. Well, if you are a first-time home buyer in New Mexico, you've come to the right place.

The state has a lot to offer to its residents – from cattle ranching to aerospace excellence and everything in between. And it also has a lot to offer first-time homebuyers.

Keep in mind that each program may have additional requirements, including income limits and minimum credit score requirements. For some programs, those who have not owned and occupied a home in the last 3 years may also be eligible.

First-Time Home Buyer Programs In New Mexico

The goal of the New Mexico Mortgage Finance Authority (MFA) is to provide financing to low- and moderate-income borrowers to make buying a home in New Mexico more affordable. The MFA achieves this goal by offering  first-time home buyer programs as well as programs for people looking for their next home.

Getting a mortgage loan can be a barrier for some home shoppers in New Mexico and the MFA works to tear down those barriers with a number of programs anyone looking to live in New Mexico should consider.

FirstHome Program

First-time home buyers may qualify for the MFA FirstHome loan program. This program is intended to help low- and moderate-income New Mexicans purchase a house. The program requires only a $500 down payment on the loan. Borrowers must live in the home and use it as their primary residence within 60 days of closing.

Down Payment Assistance In New Mexico

Beyond loan programs, a number of down payment assistance programs in New Mexico can help with closing costs and other expenses associated with purchasing a home.

FirstDown Program

The MFA FirstDown program provides up to $8,000 in down payment and closing cost assistance through a fixed-rate, second mortgage loan. It must be used with the FirstHome program and offers helps make monthly payments more manageable by extending the repayment term and providing more affordable interest rates.

HomeNow Program

Another second mortgage loan program is the MFA HomeNow program, for borrowers whose income falls at or below 80% of the area’s median. With HomeNow, buyers can receive up to $8,000 in down payment or closing cost assistance. The program must be used in conjunction with FirstHome and borrowers must have at least $500 for a down payment.

First-Time Home Buyer Programs By City In NM

It’s important to research city-specific home-buyer programs when moving to New Mexico as well. Afterall, Santa Fe may offer completely different programs compared to Albuquerque, for example.

Albuquerque

A number of home buying programs and grants are available in the city of Albuquerque. These are made possible with funds disbursed by the City of Albuquerque Community Development Division given to them by the Department of Housing and Urban Development (HUD). Check out the  CABQ Housing Services website for a complete list of programs and information on who is eligible and how they work.

Las Cruces

If you’re thinking of buying a home in Las Cruces, New Mexico, the City of Las Cruces Housing and Community Resources page can be a wealth of information. Here, you will find information on housing programs and neighborhood services that help home buyers and renters looking for affordable housing and homeowners trying to update their homes to meet current code requirements.

Santa Fe

Three local nonprofit housing agencies (Habitat for Humanity, Homewise and the Housing Trust) work together with the city of Santa Fe to help families buy a home.  Check out the Santa Fe Home Purchase page to see what’s available and if any of the programs might help you find your next house in Santa Fe.

Other First-Time Home Buyer Options

Beyond loan and down payment assistance programs specific to Santa Fe, other forms of loans available throughout the country might be good to consider as well. Here’s a quick look at common loan types and their requirements to make sure you are in the know.

• Conventional loans: The most commonly used loans, conventional loans typically require a credit score of 620 and down payment of 3% for first-time home buyers.
• FHA loans: Backed by the Federal Housing Administration, FHA loans require a down payment of 3.5% and a credit score of at least 500, depending on the lender. For example, many lenders – including our sister company, Rocket Mortgage^® – require a minimum credit score of 580.
• VA loans: VA loans are only available to active military, veterans and eligible surviving spouses. They have lower credit score and, typically, no down payment requirement.
• USDA loans: Only available in certain parts of the country, USDA loans are geared toward low-income borrowers in designated rural areas. They are backed by the U.S. Department of Agriculture (USDA) and usually require a 640 credit score. There is usually no down payment requirement for USDA loans. Rocket Mortgage does not offer USDA loans.

The Bottom Line

New Mexico offers a rich tapestry, both in the culture and in the landscape. It’s no wonder so many people consider making it their first or next home. If you’re a first-time home buyer and think New Mexico may be too expensive of a place to live, think again. The programs outlined here might just make your dream of calling New Mexico home a reality. Ready to get moving? Check out New Mexico real estate listings today. And when you’re serious about buying, you can start the mortgage approval process with Rocket Mortgage.