MFA’s HOME/Rental
programs are designed to provide gap financing for a variety of
affordable and special needs housing projects throughout the state
of New Mexico. As gap financing, HOME funds are typically the last
dollars committed to a project and are used in combination with
other housing resources such as MFA’s Tax Credit and 542(c)
loan programs. The HOME/Rental programs described herein provide
assistance in the form of junior mortgages with below-market interest
rates, extended maturity dates, and other advantageous loan terms
tailored to the particular needs of individual projects. Loan amounts
and specific terms are determined on the basis of the projects’
cash flow and affordability, among other considerations. Use restrictions
are established and monitored by MFA for all HOME/Rental projects,
and various other federal requirements must be met in order to use
HOME funding. These include, among others, completion of HUD’s
environmental review process and use of Davis Bacon wage rates in
some cases.
HOME/Tax Credits
MFA’s HOME funds can be awarded as gap financing for projects
that qualify for the Housing Tax Credit program.
The maximum amount is $20,000 per unit for projects
with 25 or fewer units, $10,000 per unit for larger projects, with
a maximum of $500,000 per project. These projects must meet all
of the requirements set forth in the Tax Credit Qualified Allocation
Plan, and score high enough relative to other projects to receive
a Tax Credit allocation. HOME awards are made on the basis of highest
level of affordability and tax credit scoring until all HOME dollars
allocated for this purpose are awarded. Underwriting criteria used
to determine principal and payment amounts are determined according
to Tax Credit program standards. These allocations are available
to nonprofit, for-profit, tribal and public agency developers who
apply during the Tax Credit application period (typically on or
about February 1st of each year).
HOME/Rental Incentives
HOME/Rental Incentive funds may be awarded to projects using 4%
Tax Credits that have received an allocation of private
activity bond volume cap from the State Board of Finance, or to
projects with first mortgage financing derived from either 501(c)(3)
bonds or other sources approved by MFA. Funding for these projects
is available on a first-come, first-served basis throughout the
year until allocations are exhausted, in amounts not to exceed the
lesser of $40,000 per unit, $800,000 per project, or 80% of the
total development cost. Projects are subject to cost limitations
and underwriting procedures similar to those applied to Tax Credit
projects.
Note: MFA’s HOME funds cannot be awarded
to projects in Albuquerque or Las Cruces. Native American trust
land projects are eligible.
