Buying a home is a significant milestone for many people. It’s a financial investment and a place where many family memories will form. While prices have gone up, first-time homebuyers can use several programs to make the cost of homeownership more affordable. This guide will explore some of the top first-time homebuyer programs in New Mexico.
Quick Look: Best First-Time Homebuyer Programs in New Mexico
- Best for Loans: FIRSTHome
- Best for Down Payments: FIRSTDown
- Best for Loan and Down Payment: NEXTHome
- Best for Fixed Payment: HOMENow
- Best for Grants: MFA DownPaymentAdvantage
- Best for High Loan Amount: Homewise Down Payment Assistance Program
Best First-Time Homebuyer Programs in New Mexico
New Mexico residents can start their search for first-time homebuyer programs with this list.
Best for Loans: FIRSTHome
FIRSTHome is a financing solution from the New Mexico Mortgage Finance Authority (MFA). You can use this program along with another MFA program. It’s also compatible with FHA, VA, USDA, HFA Advantage and HFA Preferred Conventional mortgage loans. The program caters to first-time homebuyers. You must use the property as a primary residence within 60 days of closing.
- Credit score: 620
- Income limit: Low to moderate income.
- Loan limit: Limits vary by county and household size
Pros
- Can combine FIRSTHome with other NM MFA programs
- Can use FIRSTHome to finance the entire property
- Manufactured homes are accepted if they meet current Agency or Government Sponsored Enterprise guidelines
Cons
- Minimum credit score
- Only available for first-time homebuyers
- Must be your primary residence within 60 days of closing
Best for Down Payments: FIRSTDown
FIRSTDown is a useful program for down payment assistance. It’s an extra financing resource that can offer assistance but isn’t the main avenue for affording a home. You need something else with this plan. FIRSTDown covers up to 4% of the home’s value for the down payment. It’s possible to combine FIRSTDown with other down payment programs, but this option isn’t available for everyone. Explore this list of MFA-approved participating lenders to use FIRSTDown.
- Credit score: 620
- Income limit: Low to moderate income
- Loan limit: Up to 4% of the home’s total value
Pros
- Down payment assistance
- Get up to 4% of the value of your home which can help with the closing costs as well
- Additional down payment assistance from other programs
Cons
- Minimum credit score requirement
- Can only receive assistance from MFA-approved lenders within the network
- Must be your primary residence within 60 days of closing
Best for Loan and Down Payment: NEXTHome
NEXTHome is a combination of FIRSTHome and FIRSTDown. This program gives you the loan that you need while offering funds to minimize your down payment costs. The requirements are the same. It’s essentially a bundle of the programs covered earlier.
- Credit score: 620
- Income limit: Low to moderate income
- Loan limit: Limits vary by county and household size
Pros
- Get a mortgage and funds for your down payment
- Up to 4% of your home’s value as down payment assistance
- Get help with your closing costs
Cons
- Credit score requirement
- Use the property as your primary residence
- Lender must be MFA-approved
Best for Fixed Payment: HOMENow
HOMENow is a valuable program for first-time homebuyers who want help with covering their down payment and closing costs. You can receive $7,000 with this program, and you must use it in conjunction with MFA’s FIRSTHome program. Applicants must have an annual income below 80% of the area’s median income. You won’t have to make any monthly payments, and the loan can be forgiven within 10 years.
- Credit score: 620
- Income limit: Below 80% of the area’s median income
- Loan limit: $7,000
Pros
- Possibility to get the entire loan forgiven after 10 years
- Can be combined with other down payment assistance programs
- Receive $7,000 to help with your down payment and closing costs
Cons
- Property cannot generate income
- Minimum credit score required
- Must be used in conjunction with a FIRSTHome loan
Best for Grants: MFA DownPaymentAdvantage
Qualifying first-time homeowners can receive a fixed grant amount of $25,000 to cover the down payment and closing costs. This program must be used in conjunction with FIRSTHome. You must be at or below 80% of the area’s median income to qualify for the grant. You must use the entire $25,000 to purchase the home and may not receive grant funds back at closing.
- Credit score: 620
- Income limit: Below 80% of the area’s median income
- Loan limit: $25,000
Pros
- Don’t have to pay it back
- Can use the funds to make a higher down payment
- Get up to $35,000 in down payment and closing cost assistance if you combine this with other MFA programs
Cons
- Credit score requirement
- Must use an MFA-approved lender
- Property cannot be used for business purposes
Best for High Loan Amount: Homewise Down Payment Assistance Program
Homewise offers down payment assistance up to $40,000. The provider has flexible credit requirements and offers one-on-one financial coaching. The company also offers competitive fixed-rate mortgages. You can find options without mortgage insurance.
- Credit score: 600s
- Income limit: Lower and moderate income
- Loan limit: $40,000
Pros
- No mortgage insurance
- Get up to $40,000
- Non-commissioned realtors
Cons
- Credit score requirement
- Additional requirements
- Can only put 2% down and Homewise finances 18%, even if you want to put more money down
Best National First-Time Homebuyer Programs
New Mexico residents have several first-time homebuyer programs available for people in their state. However, you should also consider these top national programs for additional assistance.
Best for Low Credit: FHA Loans
FHA loans are the best choice for people who have low credit scores. You can make a 3.5% down payment if you have a 580 credit score. Borrowers who put 10% down can get a property even if they have a 500 credit score.
- Credit score: 500
- Income limit: None
- Loan limit: HUD sets limits for each area
Pros
- No income limit
- Low credit score requirements
- Financing for up to a 30-year term
Cons
- Mortgage insurance premiums
- FHA loans have limits that depend on your location
- A property must fulfill the FHA’s property requirements
Best National FHA Lender: Rocket Mortgage® by Quicken Loans®
Rocket Mortgage offers many loans for borrowers who don’t have the best credit. Some of the lender’s loans only have 1% down payment requirements. The lender offers a quick application process and competitive rates.
- Credit score: 500
- Income limit: None
- Loan limit: Same limits as the HUD
Pros:
- Various financing options for people with low credit scores
- 1% down payment option
- Top FHA lender
Cons:
- No home equity lines of credit
- Credit check
- High origination fees
Best for Veterans: VA Loans
VA loans are for veterans who are currently serving or have previously served. Spouses of veterans are also eligible for these loans. They come with lower interest rates and no down payment requirements. Veterans can turn to these loans to make homeownership more accessible.
- Credit score: 620
- Income limit: None
- Loan limit: None
Pros
- No down payment is required
- Private mortgage insurance is not required even if you do not make a 20% down payment
- 30-year terms are available
Cons
- Monthly mortgage payments will be higher if you put less money down
- Property requirements
- Still need a good credit score
Best National VA Lender: Veterans United
Veterans United has been giving out VA loans for more than 20 years. The company has zero down payment options and lower average rates for first-time homebuyers. You can receive free credit counseling as well if you are looking for help with improving your credit score.
- Credit score: 620
- Income limit: None
- Loan limit: None
Pros:
- Zero money down
- You can apply for other loans like jumbo, USDA, FHA, and conventional mortgages
- Free credit counseling is available
Cons:
- No home equity loans or lines of credit
- Credit score requirement
- Non-VA loan rates are not published on the site
Best for Rural Homebuyers: USDA Loans
USDA loans have zero down payment options available and low rates. However, these loans are exclusively for properties in qualifying rural and suburban communities. These loans do not require private mortgage insurance. Loan guarantees do not have loan limits while direct loans and home equity loans have limits in place that depend on your location.
- Credit score: 620
- Income limit: Limits vary based on your location
- Loan limit: None
Pros
- No down payment
- Lower interest rates than average
- No private mortgage insurance is required
Cons
- Higher monthly mortgage payments if you put zero money down
- Credit score requirement
- Limited to properties in qualifying rural and suburban communities
Best National USDA Lender: CrossCountry Mortgage
Available in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA, WA
CrossCountry Mortgage has been offering USDA loans since 2003. The company provides FHA loans, VA loans, HELOCs, jumbo mortgages, conventional mortgages and others. The lender has an A+ rating on the Better Business Bureau.
- Credit score: 620
- Income limit: Limits vary based on your location
- Loan limit: None
Pros:
- Many types of loans
- No down payment required
- Down payment assistance programs
Cons:
- Rates not posted online
- No preapproval for online applicants
Qualification Requirements
Lenders need basic details like your ID, home address, email address and other essentials. Mortgage providers place a strong emphasis on your income and debt-to-income ratio. Companies offering first-time homebuyer programs also look at this information. While a lower income makes it harder to get a mortgage, the same income makes it easier to receive loans and grants from first-time homebuyer programs.
How to Apply for a Program
Each company offering first-time homebuyer programs is different. You can browse programs and visit their websites to see which steps are required. However, most of them have you complete an online form that asks a few questions about your income, credit and other details before an approval decision is made.
Get Extra Help with Buying Your First Home
New Mexico and the federal government offer several programs that make homeownership more accessible. Capitalizing on these programs can help you save money and speed up your path to owning a property. It’s possible to combine programs instead of only relying on one grant or loan for assistance. Comparing choices and submitting applications will help you raise more money.
Frequently Asked Questions
Can I use first-time homebuyer programs in New Mexico to purchase any type of home?
You can use a first-time homebuyer program to purchase a home that aligns with the program’s requirements. Some programs have limits on loan amounts.
Can I combine first-time homebuyer programs in New Mexico with other assistance programs?
Yes. You can combine first-time homebuyer programs in New Mexico with other assistance programs.
Are there any fees associated with first-time homebuyer programs in New Mexico?
There are no additional fees specifically for first-time homebuyer programs that you wouldn’t find with traditional lenders.
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