Purpose
MFA’s Primero Loan Program is a flexible,low cost loan program
created in 1993 to finance the development of affordable rental
or special needs residential facilities in New Mexico that would
be considered “high risk” by traditional lenders. It’s
goal is to leverage other public and private funds, and to expand
the housing development capacity of New Mexico's nonprofit, tribal
and public agency housing providers. Through a substantial
expansion of the program in 2002 the program was broadened to finance all types of
projects that cannot be accommodated by existing sources, particularly
the secondary market, and to develop new delivery systems through
nonprofit and other institutions where needed to enhance affordable
housing production.
Eligible Borrowers
Public and tribal agencies, for profit and nonprofit sponsors are
all eligible. Applicants must provide evidence of businesslike organizational
operations, as well as experience in housing development or use
of an experienced
development team.
Eligible Projects and Programs
Funding may be approved for specific housing developments, or for
programs to be operated by agencies to meet local housing needs.
Rental, owner occupied and special needs projects of any size may
be financed under this program, during any stage of the development
process. New construction, conversion, and acquisition/rehabilitation
projects may be financed.
Other Requirements
All projects and programs must be responsive to clearly identified
housing needs. Income and/or rent limits will apply to all projects
and programs, but these will differ with the type of activity proposed.
Applicants must deliver commitments from other sources of funds,
or evidence that such funding is unavailable.
Application Process There are four different application packages for Primero Loan Program financing. Applicants should select the application most appropriate for the activity they are proposing.
Pre-Development Application – Applicants seeking Primero Loan Program funding for pre-development expenses such as environmental assessments, appraisals, title searches/insurance, architectural and engineering fees, or market studies should complete the Pimero Loan Program Pre-Development Application.
MFA currently has grant funding available to qualified developers to finance pre-development costs associated with supportive housing development. The maximum grant award is $50,000. Grant funding for this initiative was provided by the State through the Behavioral Health Collaborative of New Mexico in the amount of $146,000.The initial allocation of grant money is limited to supportive housing projects that target severely mentally ill and transitioning youth who are aging out of the foster care system or existing juvenile justice system. Rent charged cannot exceed 30% of tenant income. Please contact Housing Development Department staff for availability of grant funds prior to completing an application.
Homeownership Development Application – Applicants seeking funding for the acquisition, construction, or rehabilitation of single-family homes to be owned by income qualified household should complete the Homeownership Development Application.
Rental Development Application - Applicants seeking funding for the acquisition, construction, conversion, or rehabilitation of multifamily rental projects should complete the Rental Development Application.
Land Banking Credit Application – Applicants seeking a line of credit for the acquisition of property for the development of affordable housing projects should complete the Land Banking Credit Application. This opportunity is only available to qualifying Non-profit, Public, and Tribal housing development entities. Applicants must demonstrate: a proven ability to process a piece of land through the development process; ability to move quickly on development; a history of completed housing developments; and provide a business plan that supports housing development activities to be eligible for this opportunity.
Applicants should provide all items listed on the appropriate application checklist. If all items cannot be provided at the time of application, applicants must indicate why, and when the requested information will be available.
Loan Terms
Development loans will be underwritten and structured according to sound
lending practices. However, interest rates are determined at MFA's discretion,
typically below market. Primero Loans are repaid through subsequent
financing sources, or in some cases through cash flow. Terms cannot
exceed 5 years but loans do not have to be amortized during their term.
Loans are secured whenever possible but they may be subordinated to
other debt. The maximum loan amount is $1 million, and availability
of funds varies from time to time.
Priority Initiatives MFA has established four funding Priority Initiatives designed to increase affordable housing development in underserved markets. Priority Initiatives currently includes Tribal Housing, Colonias Housing, Rehabilitation, and Manufactured Housing. Activities focused on tribal housing, colonias housing, rehabilitation of home already, or to be, occupied income eligible households, and manufactured housing will receive funding priority. Applicants wishing to receive funding priority under one of these initiatives must complete the appropriate application as specified in the Application Process section above, and indicate on the application which initiative they are seeking funding priority under.
How To Apply
Application forms can be obtained from MFA and submitted at any
time. Complete applications will normally be processed and approved
within 60 days. All loans are reviewed by staff, and loans above
a proscribed amount will be approved by the Board of Directors.
Discussions with staff are recommended prior to preparation of applications,
to identify appropriate application materials and make initial eligibility
determinations.
