New Mexico Mortgage Finance Authority
The Tax Credit Loan Program was developed by the New Mexico Mortgage Finance Authority to provide down payment and closing cost assistance to first-time homebuyers. The program was created in part due to the high out-of-pocket costs associated with making a down payment and paying the closing costs, and the fact that the $8,000 tax credit provided by the federal government can only be claimed after the home has been purchased.
The program works by issuing first-time homebuyers with either a loan of 8 percent of the sales price or $6,500, whichever of the two is less, to be used to cover the down payment and closing costs associated with a new home purchase.
After the mortgage loan closes, the buyer may then file for the $8,000 federal tax credit. When the tax refund is issued the buyer can then use that money to repay the loan from the Tax Credit Loan Program.
If the borrower decides to repay the Tax Credit Loan prior to June 30, 2010, the borrower is not liable for interest associated with the loan. If the borrower does not repay the loan by June 30, 2010, the loan is converted to a 30-year fixed second mortgage loan, requiring the borrower to make monthly payments.
Stipulations of the Tax Credit Loan Program are that the New Mexico homebuyer be a first-time homebuyer who has not owned a home in the past three years, and that borrowers use a specific lender. Click here to see a list of participating lenders, from whom consumers can pose questions to, concerning the program.
The Tax Credit Loan Program does have restrictions based on annual household income, which fluctuates depending on family size and property location.
According to the New Mexico Mortgage Finance Authority, “the Tax Credit Loan Program can be used to help purchase a variety of homes, including single-family attached and detached home, town homes, condominiums, home in planned unit developments, and permanently attached manufactured homes. The sales price of the home may not exceed the acquisition cost limits, unless the home is in a targeted area.”
Price Limits
Sante Fe – $343,799 (purchase price limit)
Los Alamos – $286,875 (purchase price limit)
All other areas and counties of New Mexico – $237,031 (purchase price limit)
Income Limits (by family size)
Albuquerque MSA (Bernalillo / Sandoval / Torrance / Valencia)
Family size: (1 – 2) – $55,900, (3 – 6) – $64,285
Santa Fe MSA (Santa Fe County)
Family size: (1 – 2) – $57,000, (3 – 6) – $65,550
All other areas and counties of New Mexico
Family size: (1 – 2) – $46,600, (3 – 6) – $53,590
New Mexico is not the only state to have introduced such a program to help stimulate home sales. Missouri was the first with their Tax Credit Advance Loan Program. States to follow suit include Delaware with their American Dream Downpayment Initiative, Pennsylvania with their Home Purchase Loan Program, and Tennessee with their Homeownership Loan Program. Additional states to have introduced similar programs include Kentucky, Idaho, New Jersey, and Ohio.
See more:
New Mexico Mortgage Finance Authority’s Tax Credit Loan Program
NAHB Four More States Announce Programs to Monetize Tax Credit
States Turn Federal Tax Credits Into Cash for Would-be Homebuyers
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I’m president and owner of Utah’s largest real estate company. It’s very important to me to learn about incentives made available by other states. Sincere thanks for this information.
This is an outstanding application of the tax credit to help get the housing market turned around in New Mexico. I plan on using this post (and others like it) to generate some much-needed thought and action in my own area.
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The tax credit is refundable and homebuyers never have to pay it back. If the First-time homebuyers have already purchased a home or plan to do so this year, they can file an amended 2009 tax return to claim the credit.
Cheers,Harry,Panama property
I think this tax credit is a big joke. It’s only going to hurt the economy even more in the long run. As our national digs it’s self deeper into debt the effects are going to be felt across the globe.
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It sure looks like states are getting creative trying to jumpstart the real estate market again. Any help is better than no help!
TaxForums last blog post.."Caring for Our Parents": My New Book on Long-Term Care
Massachusetts has also instituted a program where the borrower can use the tax credit funds toward the down payment on the purchase of a home or condominium. This makes a lot of sense as the down payment is usually the stumbling block for most 1st time buyers.