Lengthy to-do list before NMFA begins approving $125 million in new housing loans • Source New Mexico

The head of the state’s finance authority tasked with doling out a windfall of housing loans said the authority is on track to OK loans in the fall — so long as what she called the “timeline gods” are merciful.

In the legislative session that wrapped up in February, lawmakers approved $125 million for the New Mexico Finance Authority to spend on workforce housing development and affordable housing infrastructure. Workforce housing is generally aimed at those who exceed income thresholds that would qualify them for subsidies.

It’s a big windfall for the relatively new Opportunity Enterprise Revolving Fund created in 2023 for commercial development and then amended legislatively to include housing. Under the new law this year, the fund will be used to address the statewide housing crisis. The state lacks at least 32,000 affordable housing units, according to a recent study. 

Citing the pressing need, Gov. Michelle Lujan Grisham, when she signed the legislation in late February, challenged the authority to approve loans by the fall. 

Marquita Russel, CEO of the authority, told Source New Mexico on Friday that the authority has much to do before it can get that money out the door, and staff will be “threading the needle” to get it done by then.

House Bill 195, which goes into effect May 15, requires the authority to add new board members with expertise in housing and also create new rules governing the loan program. State rulemaking requires 45-day public comment periods, and the new board won’t be able to approve the initiation of draft rules until they convene after the law goes into effect.

The rules will be subject to multiple hearings, and the board will have to incorporate public comments once they are submitted, Russel said. 

“It’s a lengthy process,” she said. “It requires a lot of transparency and public hearing, and then notices, so it can’t happen quickly.”

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But when the application process opens, she hopes by late summer, private developers will have access to low interest loans to help build roads, sewers and other infrastructure to affordable housing projects or to build new housing for people, like many police officers and teachers, who can’t afford to live in the communities where they work. 

The fund as it exists now provides commercial loans at 60% of the Wall Street Journal prime interest rate on the day it is issued. That rate Friday was 8.5%.

Russel said she’s not sure whether the funds will go primarily for affordable housing infrastructure or workforce housing, or whether it will go to nonprofits or private developers. But she added that she believes there is a high demand for workforce housing and few places for developers to go for financing. 

Lawmakers this session also approved $50 million for the Mortgage Finance Authority’s Housing Trust Fund, which is geared for affordable housing programs and development. 

Taken together, the $175 million — plus $20 million to address homelessness and other individual housing projects — is the biggest housing investment in the Legislature’s history, aimed to boost new development of low- and middle-income housing. 

Another bill passed this session, Senate Bill 216, adds nonprofit housing developers to a list of possible recipients of low interest loans for the NMFA’s Public Project Revolving Fund. That fund was established in 1992 for local government projects, but amended to let nonprofit housing agencies apply. 

However, Russel said no nonprofits who apply will be authorized to receive that money until the next legislative session, when lawmakers sign an annual bill approving recipients. 

But Russel said she hopes that fund, when it’s finally available, will end up becoming the go-to source of capital for housing nonprofits, leaving the $125 million fund for for-profit developers, “because there isn’t another place for those,” she said.

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