The HOME/Single Family Development
Program provides partial or “gap” financing to nonprofit
and for-profit developers, public and tribal entities, and Community
Housing Development Organizations (CHDOs) for the construction, acquisition
and rehabilitation of single family homes throughout New Mexico. Units
financed with HOME funds must be affordable to households earning no
more than 80% of the area median income adjusted for family size. HOME/SFD
provides junior mortgages with below-market interest rates, and other
advantageous loan terms tailored to the needs of the projects. HOME
funds may be used in combination with other down payment and closing
cost assistance programs. However, all HOME subsidies combined cannot
exceed $30,000 per unit.
Eligible Sponsors
Units of local government, public housing authorities, nonprofit and
for-profit developers, public and tribal entities, and
CHDOs are eligible to apply.
However, applicants must demonstrate the financial
strength, organizational capacity and commitment to complete the project.
Project Requirements
The property must be located in New Mexico but may NOT be located within
the city limits of Albuquerque or Las Cruces. The sales price of the
property to be acquired by a homebuyer may not exceed 95% of the area
median purchase price for that type of housing, as published by HUD.
Upon completion the home must meet the Model Energy code, accessibility
requirements under the Fair Housing Act, and local building codes. Applications
must demonstrate that HOME funds are needed and will enhance affordability.
Davis Bacon wage rates are required in some cases.
Use and Timing of Funds
The use and timing of HOME funds will be determined by MFA at the time
of application and may take two forms:
HOME funds may be provided at the time of the sale to the homebuyer,
and will be used to fill the financing gap between what the homebuyer
can afford and the sales price of the home; or
At the discretion of MFA, HOME funds may be provided
earlier and used as interim construction financing. These funds may
be
recovered or converted to junior homebuyer loans when an eligible buyer
purchases the house. For the funds to be used in the interim period
the developer must be a CHDO or provide a performance bond to guarantee
completion.
Eligible Homebuyers
To be eligible to purchase a home assisted with HOME funds, the prospective
purchasers must have an annual gross income below 80% of the area median
income and must occupy the property as their principle residence.
Loan Terms
The long-term affordability of the property is ensured through a junior
mortgage to the homebuyer. This loan may take the form of a deferred
payment, 0% interest loan, or as a below-market amortizing loan. HOME
funds must be repaid upon sale or transfer to an ineligible buyer, or
refinancing of the property.
