Living & Owning in Angel Fire, Part 2, New Mexico State Assistance for Buyers

Today we are continuing our series of Blogs, “Living and Owning in Angel Fire.” In our last post we discussed the Federal Tax Credit program for first time homebuyers. This post will continue with our discussion regarding first time home buyers, and other programs available in New Mexico. In New Mexico, the New Mexico Mortgage Finance Authority is a great resource for low to median income families and individuals looking for assistance with buying their first home.

MFA offers a number of programs with below-market interest rates and/or closing cost assistance to first-time homebuyers. These programs are also available to individuals who have not owned a home or a manufactured house in the last three years.

The main programs offered by MFA are the Mortgage$aver Programs, Mortgage$aver Plus Programs, Payment$aver Programs, Mortgage Booster Program, and a new program called HERO for households with at least one member who is a safety worker, health care worker, educator or an active member of the armed forces.

The Mortgage$aver and Mortgage$aver Plus Programs offer below-market interest rates and/or closing cost assistance to first-time homebuyers. First-time homebuyers are individuals who have not owned a home (including a manufactured home on a permanent foundation) in the last three years. A borrower may qualify for funds based upon household income and family size as well as the sales price of the home.

Mortgage loans available under the Mortgage$aver program include FHA, VA, and a variety of conventional loans, including the MyCommunity and Community Solutions Programs. The low Mortgage$aver rates mean lower monthly mortgage payments. The Mortgage$aver Plus programs save the borrower money because they are not required to pay an origination or loan discount fee at loan closing, leaving more money in the borrowers pocket. The Mortgage$aver Plus program also provides the borrower with a grant (that does not have to be repaid) to help reduce the need for up-front cash at closing.

Mortgage$aver loans are 30-year fixed-rate loans available at rates below the 30-year fixed “market” rate. The Mortgage$aver Plus interest rate is slightly higher than the 30-year fixed “market” rate, but has no origination fee or discount fee and features a 3.0% (of the total loan amount) down payment assistance grant “built-in” to the loan. The grant can be used towards down payment, closing costs, and prepaid expenses.

In order to qualify a buyer must start the Mortgage Application process with a professional MFA-qualified mortgage lender who will review the borrowers monthly income, expenses, employment situation, and credit report so that they can determine if the borrower is eligible for the Mortgage$aver programs.

Payment$aver works with a below-market interest rate first mortgage loan as a second mortgage loan at zero-percent interest to cover up-front costs (the down payment and other costs related to the purchase excluding pre-paids). The zero-percent interest Payment$aver loan is a soft second loan that may not exceed the lesser of 8% of the sales price of the home or $8,000. The loan does not need to be paid back until the property is sold, refinanced, or transferred, and it is assum-able if the buyer meets program eligibility requirements. After 5 years, this loan may be forgiven at the rate of 20% per year. An MFA-qualified lender will need to determine qualifications including down payment/closing cost assistance needed by the borrower.

HERO is one of the most interesting programs. This is a great new program for attracting the professionals rural mountain communities need. HERO is designed to serve households in which at least one member is a safety worker, health care worker, educator or an active member of the armed forces. The Hero Program is a special first and second mortgage loan that can be used jointly to include down payment and closing cost assistance to persons in certain occupations. Even if you’re not a first time homebuyer, you may still qualify for the HERO First Mortgage Program and also if necessary a HERO Second Mortgage.

The HERO First Mortgage is a 30-year fixed rate mortgage available for both first time homebuyers and non-first time homebuyers at a below-market interest rate with a 1 point origination fee and 1 point discount fee (1+1). Also, there is no pre-payment penalty! Another big plus of HERO are the substantially higher income limits allowed and the higher purchase prices allowed. An MFA-qualified lender will need to determine qualifications of a buyer.

Two local qualified-MFA lenders would be Peoples Bank of Taos, 575-758-4500, and Wells Fargo of Taos, 575-751-4208. There might be others I could not find on the MFA website, so if you are a qualified lender in our area notify me and I will add you to the list.

There are also many other programs, so be sure your lender is fully up on all the various programs. I have found more often than not that lenders tend to be narrow minded, and need to broaden their knowledge and scope of the programs before they let a potential borrower get out the door. In closing, (no pun intended), if you’re a first time buyer, or have not owned a home in the last three years, or qualify for the HERO program, it might be easier than ever to own your own home in Angel Fire. For more comprehensive information about New Mexico’s MFA Program and qualification tables click here. The next Living and Owning in Angel Fire post will be about employment/business opportunities.
Kyle.