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2022 New Mexico First-Time Homebuyer Programs

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New Mexico homebuyers have access to multiple programs aimed to help make the dream of homeownership a reality. Available help includes low-interest mortgages and down-payment and closing-cost assistance. To qualify, buyers need to meet income and credit guidelines and additional requirements for each program.

This guide provides an overview of first-time homebuyer programs in New Mexico.

New Mexico statewide and local first-time homebuyer programs

The New Mexico Mortgage Finance Authority (MFA) offers homebuyer programs in every county in the state. In addition to the programs listed below, local governments and community organizations may provide first-time homebuyer programs on the city and local levels.

Program nameAssistance amountAssistance typeWhere it’s available
FirstHomePurchase price up to $433,920, depending on countyLow-interest mortgageStatewide
FirstDownUp to $8,000 for down payment and closing costsFixed-rate second mortgageStatewide
NextHomePurchase price up to $346,600; 3% of loan amount for down payment and closing costsLow-interest first mortgage with forgivable second mortgage up to 3% of the first loan amountStatewide
HomeNow8% of loan amount, up to $8,000, for down payment and closing costsForgivable second mortgageStatewide

What to know about different types of down payment assistance

Closing cost and down payment assistance programs can work in various ways. Make sure you understand how each program works before applying.

  • Second mortgage: MFA’s down payment assistance programs are second mortgages. This means borrowers agree to a second loan in addition to their first home mortgage. The terms vary, depending on the program, though. For example, FirstDown is a traditional amortizing loan with payments, while HomeNow is a zero-interest forgivable loan with no payments.
  • Grants: Some community organizations may offer down payment assistance in the form of grants. Borrowers do not need to repay grant money; however, these programs are typically limited to the availability of funds.

How New Mexico first-time homebuyer programs work

Borrowers will take the following steps to apply to one of MFA’s first-time homebuyer programs.

  1. Review program options.Familiarize yourself with available programs and their guidelines, including income limits, credit requirements and program fees. In addition to statewide homebuyer programs, be sure to explore regional and local first-time homebuyer programs in New Mexico.
  2. Attend homebuyer education.All MFA program applicants must attend pre-purchase homebuyer counseling online or through an HUD-approved counseling agency.
  3. Gather your paperwork.Get ready to work with a program lender by preparing your personal and financial information ahead of time. Your lender will tell you the exact documents they need, but you can get a head start by gathering your recent paystubs, tax returns, bank statements and information on your assets and debts.
  4. Choose a participating lender.To apply to an MFA program, you’ll work directly with an approved lender in your area. It’s a good idea to compare a few lenders by asking about their fees, mortgage process and program requirements. Once you select a lender, they will guide you through the application and prequalification process so you can begin home shopping.
  5. Be aware of program policies. Make sure you understand any guidelines you’ll need to meet after closing, such as remaining in the home for a set time.

New Mexico first-time homebuyer program requirements

Each homebuyer program has specific income and credit score guidelines borrowers must meet. While these qualifications are based on minimum mortgage requirements, lenders may establish additional eligibility criteria.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
FirstHome620 (alternative credit qualification allowed in some cases)As per lender’s requirements$65,520 to $146,970, depending on county and family sizeN/A (Nine years to avoid potential recapture tax)
FirstDown620 (alternative credit qualification allowed in some cases)As per lender’s requirements$65,520 to $146,970, depending on county and family sizeN/A
NextHome620As per lender’s requirements$95,00015 years
HomeNow620As per lender’s requirements$30,600 to $105,500, depending on county and family size10 years


First-time homebuyer initiatives typically have income limits to target buyers who need help the most. The U.S. Department of Housing and Urban Development (HUD) sets these limits and bases them on the median income of the area in which you’re buying. You can look up the income limits for your county to get an idea of what programs you qualify for.

National first-time homebuyer programs

In addition to first-time homebuyer programs, borrowers can secure financing through national loan programs. While not limited to first-time homebuyers, many national loans have favorable terms such as low minimum down payments and flexible credit requirements — some of MFA’s homebuyer programs pair assistance with one of these loans.

Conventional loans. Typically, conventional loans (non-government) have stricter eligibility requirements than government loans. But a few conventional loan programs have flexible guidelines. Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible® programs are available to low- and moderate-income borrowers and have a minimum down payment of 3%. HomeOne, a Freddie Mac program, also has a 3% minimum downpayment and is open to all first-time buyers and those who haven’t owned a home in three years. The program does not have income limits.

FHA loans. Mortgages guaranteed by the Federal Housing Administration (FHA) are popular with first-time homebuyers. FHA loans have a low minimum down payment of 3.5%, and borrowers can qualify with a credit score as low as 580. Homebuyers with credit scores between 500 and 579 can be eligible with 10% down.

VA loans. Active-duty service members, military personnel and eligible spouses can finance a home with a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans have no down payment requirement.

USDA loans. Low- and moderate-income borrowers living in designated rural areas may qualify for loans backed by the U.S. Department of Agriculture. USDA loans require no down payment.

Section 184 Indian Home Loan Program. With this HUD program, eligible borrowers can get a low-rate mortgage with down payment minimums of 1.25% or 2.25% (depending on the loan amount) and flexible credit requirements. Section 184 loans are available to American Indian and Alaska Native families, Alaska villages, tribes or tribally designated housing entities.

FAQs about New Mexico’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in New Mexico?

Homebuyer assistance programs typically define a first-time homebuyer as anyone who has not owned their primary residence in the past three years. So you can qualify for first-time homebuyer programs even if this is not your first home purchase.

Can I qualify for down payment assistance in New Mexico?

To qualify for one of MFA’s down payment assistance programs, borrowers must be eligible for a first mortgage through the agency, which means meeting the income and credit requirements of the loan program to which they’re applying. Regional and local down payment assistance programs may have other qualifications.

How much of a down payment do I need to buy a house in New Mexico?

Depending on the loan program, buyers can purchase a home with down payments ranging from 3% to 5%. And some mortgages, such as VA and USDA loans, don’t require down payments. Additionally, eligible borrowers can combine down payment and closing cost assistance with a loan program to get 100% financing.

Keep in mind MFA requires borrowers to contribute at least $500 of their own funds.

Home price trends in New Mexico’s major areas

In New Mexico, home prices soared by double digits in 2021. Median home prices increased by 18.7% to $269,035 in Bernalillo County, where Albuquerque is located. The typical 30-year fixed-rate mortgage payment in the county is about $192 higher than a year ago, to $1,031.

In Santa Fe County, median home prices increased similarly by 18.2% to $392,987. And the typical monthly mortgage payment there rose by $275, to $1,506.

Home prices in Doña Ana County, home to the city of Las Cruces, jumped by 20% to a median price of $200,551. The typical mortgage payment there is up $150 year-over-year, to $769.


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