The New Mexico Mortgage Finance Authority, branded as Housing New Mexico or MFA, has helped more than sixty-five thousand low- and middle-income residents buy homes since its founding in 1975. The agency bundles a below-market first mortgage with down payment and closing cost assistance, which together can take thousands of dollars off the amount a first-time buyer needs to close on a house.

The FirstHome First Mortgage

FirstHome is MFA's flagship mortgage for first-time buyers. The program defines a first-time buyer as anyone who has not owned and occupied a primary residence in the previous three years, so many repeat buyers who rented for a stretch can still qualify. Applicants must intend to live in the property as their primary residence within sixty days of closing.

FirstHome loans are fixed-rate thirty-year mortgages originated by participating lenders and purchased by MFA. Because MFA funds the program through tax-exempt mortgage revenue bonds, it can offer rates below the conventional market. That gap of even a quarter point can save a borrower thousands over the life of the loan.

Borrowers must meet income and purchase price limits that vary by county. Credit standards require a minimum score of 620 and completion of a homebuyer education course, either through MFA's online eHome America partner or an approved counseling agency.

FirstDown Down Payment Assistance

FirstDown layers on top of a FirstHome first mortgage to cover the down payment and some closing costs. It is structured as a silent second mortgage. Borrowers receive the funds at closing but pay no monthly installments and no interest for the life of the loan.

The loan is fully forgiven if the homeowner keeps the property as a primary residence for ten years without refinancing or selling. That makes FirstDown a grant in practice for families who plan to stay in their home long term. If the homeowner sells or refinances within the first decade, the outstanding balance becomes due.

FirstDown can typically provide several thousand dollars of assistance, and it must be paired with a FirstHome first mortgage. Because there is no minimum loan amount, it can be sized to cover only what a specific buyer needs.

HomeNow for Lower-Income Buyers

HomeNow targets a narrower slice of the market, serving first-time buyers at lower income levels. Like FirstDown, it is a second mortgage used with FirstHome, but HomeNow provides a larger dollar amount of assistance and is designed for borrowers who would otherwise struggle to bring any cash to closing.

HomeNow borrowers can combine it with FirstDown in some situations, making a full closing cost and down payment package possible. Income limits for HomeNow are stricter than for standard FirstHome, and the program priorities reflect MFA's mission to reach households most likely to be priced out of the market.

How the Pieces Fit Together

Most first-time buyers who use MFA financing walk through the door at a participating lender and apply for a FirstHome mortgage with FirstDown or HomeNow attached. The lender handles the paperwork and coordinates with MFA on the back end. A buyer should plan to contribute at least five hundred dollars of their own funds, though the specific amount can vary with program rules and loan type.

All loans funded by MFA are underwritten to standard Federal Housing Administration, Veterans Affairs, USDA, or conventional guidelines. A VA-eligible veteran can combine a VA first mortgage with MFA down payment assistance, layering the zero-down VA benefit with additional help for closing costs.

Pre-Purchase Counseling Requirement

Every MFA borrower must complete a homebuyer education class before closing. The required counseling covers budgeting, credit, shopping for a mortgage, navigating the inspection and appraisal process, and maintaining a home after purchase. MFA accepts the eHome America online course and certified one-on-one or group sessions from HUD-approved agencies.

Housing counseling agencies across the state, including the United South Broadway Corporation in Albuquerque, Homewise in Santa Fe, and others, offer the coursework as well as one-on-one credit review to help buyers get mortgage-ready before they apply.

Who MFA Serves

MFA programs reach a broad swath of New Mexico. County-level income and purchase price limits are tied to median household income and area home values, so buyers in higher-cost markets such as Santa Fe often have higher limits than buyers in smaller towns. Teachers, first responders, health care workers, and other essential workers often fit well inside the program limits and make up a significant share of borrowers.

Beyond the Mortgage Programs

In addition to FirstHome, FirstDown, and HomeNow, MFA runs several rehabilitation and accessibility programs that can follow a home purchase. These include weatherization services, a roof repair program, and an accessibility modification program for homeowners with disabilities. Some buyers who use MFA financing to buy an older home later tap these programs to fix health and safety issues once they move in.

Getting Started

Prospective buyers should begin by visiting the Housing New Mexico website to review current income and purchase price limits, then contact a participating MFA lender. A lender can pull credit, review income, and issue a pre-approval letter that specifies the maximum loan amount along with an estimate of how much down payment and closing cost assistance might be available.

With a pre-approval in hand, buyers can shop confidently for homes within their budget, knowing that MFA's combined programs can meaningfully reduce the cash needed at closing and, for long-term homeowners, turn a down payment loan into a forgiven grant.

New Mexico MFA Programs Open Doors for First-Time Homebuyers