Primero Loan Program (Rental)

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. Its 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 maybe 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.

  1. 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 Primero Loan Program Pre-Development Application. Funding is availabel for Pre-Development loans.
  2. MFA also provides forgivable loans - grant funding - to qualified developers to finance pre-development and development costs associated with permanent supportive housing development. The maximum pre-development grant award is $75,000 and the maximum development grant award is $125,000. Funding for this initiative is provided by the State through the Behavioral Health Collaborative of New Mexico and Optum Health. "Supportive Housing" shall mean permanent rental housing coupled with the provision of supportive services in which 15% of the units are designated for special needs households. These are households in which an individual or household member has a substantial, long term disability. Tenants in Supportive Housing units must sign a standard residential lease with no imposed time limits to tenancy. Successful project applications will include a supportive service plan with a dedicated funding source and/or enter into a Memorandum of Understanding with a "Local Lead Agency." To utilize funds under this program Permanent Supportive Housing is further defined to exclude the following: transitional housing, group homes, residential treatment or any housing that has an imposed time limit to tenancy [example: housing that has an 18 month maximum stay to prepare an individual for independent living and/or another subsequent housing unit]. Please contact Housing Development Department staff for availability of grant funds prior to completing an application.
  3. Rental Development Application - Applicants seeking funding for the acquisition, construction, conversion, or rehabilitation of multifamily rental projects should complete the Rental Development Application.
  4. 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 prescribed 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.

Forms and Reference Materials

      1. Primero Pre-Development Application & Checklist

      2. Rental Development Checklist
          Rental Development Application
          Rental Development Schedules

      3. Land Banking Application & Checklist

Program Contact

Felipe Rael
Main: (505) 843-6880
Direct: (505) 767-2249
Toll free in New Mexico: (800) 444-6880