New Mexico First-Time Home Buyer Programs of 2021

By NerdWallet 

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Many people need help when buying their first home. That's why the New Mexico Mortgage Finance Authority, or MFA, offers programs to give qualified first-time home buyers a chance to get affordable loans with low down payments at generous terms.

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There also are national loan programs that benefit home buyers who have small down payments or imperfect credit histories. Check out all options when buying a first home in the Land of Enchantment.

National first-time home buyer programs

These loan programs are widely available and are worth a look, especially if you don't have much money saved for a down payment or you have a few dings on your credit.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

MFA highlights and eligibility requirements

To qualify as a first-time home buyer in New Mexico, you can't have owned your own home in the past three years. If that describes you, you may qualify for one of these New Mexico MFA programs designed to ease your path into homeownership. NextHome down payment assistance is available to repeat buyers as well as first-timers.


  • Down payment and closing cost financial aid available, with income limits.

  • Can be used to finance single-family properties.

  • Alternative credit qualification may be available for borrowers without a credit score.


  • 620 minimum credit score.

  • Borrowers must meet income limits that vary by family size and county.

  • Homes have purchase price limits.

  • Borrowers must contribute at least $500 of their own money.

MFA first-time home buyer programs


Best for:

Low mortgage rates

What you need to know:

This program offers competitive interest rates on mortgages for first-time home buyers who have low to moderate incomes. You have to contribute at least $500 of your own money. You must complete pre-purchase home buyer counseling. The FirstHome program is compatible with FHA, VA, USDA and conventional mortgages; it can be combined with down payment assistance from MFA.


Best for:

Down payment assistance, closing cost assistance

What you need to know:

This program combines an MFA mortgage with down payment and closing cost assistance in a forgivable loan with no monthly payments. The money can finance the down payment and closing costs. The assistance is available to first-time and repeat home buyers. Borrowers must be able to contribute $500 of their own money to the purchase, and pre-purchase counseling is required.


Best for:

Down payment assistance, closing cost assistance

What you need to know:

In combination with a FirstHome primary loan, FirstDown is down payment and closing cost assistance of up to $8,000 as a second mortgage. In contrast with NextHome, FirstDown has monthly payments. There is no minimum loan amount.


Best for:

Down payment assistance, low-income borrowers

What you need to know:

HomeNow is down payment assistance for home buyers with low incomes. To qualify, you have to earn 80% or less than your area's median income. The assistance is a second mortgage up to $8,000. The HomeNow loan is forgivable if you live in the home for 10 years, and there are no monthly payments. It must be paired with a FirstHome primary mortgage.

Summary: 2021 New Mexico MFA first-time home buyer programs

  • FirstHome for low-fee mortgages with competitive interest rates.

  • NextHome for forgivable down payment assistance with no monthly payments.

  • FirstDown for down payment assistance that has to be repaid in monthly payments.

  • HomeNow for forgivable down payment assistance, with no monthly payments, for people with low incomes.

These are the general outlines of New Mexico MFA's loan programs for first-time home buyers. To get into the details, visit New Mexico MFA's mortgage programs page. Lending decisions are made by the programs' participating lenders. If you find loan and down payment assistance programs that fit, contact a lender directly.

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