2009 Refundable Tax Credit Loan for First-Time Homebuyers

How can it benefit me?

In many instances, the biggest barrier facing first-time homebuyers is saving the money for the down payment and closing costs. Because the new Federal First-Time Homebuyer Credit can only be claimed after the homebuyer purchases the home, the credit cannot be used to cover the down payment and closing costs associated with the purchase of a home.

Because of the frequent need for down payment and closing cost assistance to purchase a home, the New Mexico Mortgage Finance Authority (MFA) has created the “Tax Credit Loan Program.” The Tax Credit Loan Program provides a first-time homebuyer with a loan of 8 percent of the sales price or $6,500, whichever is less, to cover the down payment and closing costs associated with purchasing a home. After loan closing, the homebuyer may file for the federal first-time homebuyer tax credit and use the tax refund to pay off the Tax Credit Loan.

As long as the homebuyer pays off the Tax Credit Loan prior to June 30, 2010, the homebuyer will not have to pay any interest on the loan. If the borrower chooses not to pay off the Tax Credit Loan by June 30, 2010, the loan will convert to a 30-year, fixed rate second mortgage that requires a modest monthly payment.

The Tax Credit Loan Program is paired with a safe, 30-year fixed rate MFA first mortgage loan, which provides long-term, sustainable homeownership.

The Tax Credit Loan Program is available statewide to first-time homebuyers who have not owned a home for the past three years. The program is available through a statewide network of Participating Lenders including New Mexico Educators Federal Credit Union. The Participating Lender coordinates the loan process and answers any questions you may have regarding the program.

Are there restrictions to this program?

Yes.  Your annual household income, before taxes, may not exceed the limits listed below, based on family size and property location. In some cases, slightly higher annual household income limits might apply.

The MFA Tax Credit Loan Program can be used to help purchase a variety of homes, including single-family attached and detached homes, town homes, condominiums, homes in planned unit developments, and permanently attached manufactured homes. The sales price of the home may not exceed the Acquisition Cost Limits listed below, unless the home is in a Targeted Area. You can ask a Mortgage Services professional at New Mexico Educators Federal Credit Union for complete details. 

Email us  if you would like more information now.