Housing New Mexico launches new interest-free loan program for housing developers, nonprofits

The quasi-governmental agency Housing New Mexico is embarking on a new loan program aimed at spurring the development of affordable housing.

The Zero Interest Homebuilder Program, or ZIHP, will offer interest-free financing through the New Mexico Housing Trust Fund to nonprofit and for-profit organizations, government agencies, builders and single-family developers, officials said in a news release this month.

The move to offer interest-free financing as a mechanism to spur development comes as home prices outpace wage growth, officials said, “resulting in a huge need for affordable housing.”

In December, the median sales price for a single-family detached home in the Albuquerque metro was $364,000, according to data from the Greater Albuquerque Association of Realtors. Meanwhile, ADP Pay Insights, a product of the global payroll company ADP, said the median wage in New Mexico last month stood at $40,300.

“With this new program, our intention is to promote the development and sale of entry-level homes priced appropriately for their respective market,” Housing New Mexico CEO and Executive Director Isidoro Hernandez said in a statement.

A spokesperson for Housing New Mexico, also known as the New Mexico Mortgage Finance Authority, said the organization is unsure how many entities will apply for the program’s interest-free loans. The spokesperson, Kristie Garcia, said the New Mexico Housing Trust Fund, created in 2005 through legislation, has awarded about $88.6 million to different groups, with about $33.7 million so far spent.

She said Housing New Mexico does offer other single-family development programs, including “HOME, Primero and the general single-family development and construction loans through the New Mexico Housing Trust Fund.”

Loans through ZIHP can be used to finance anything from the costs of on-site infrastructure to the development of single-family lots, officials said. Applications for financing need to be sent 60 days prior to Housing New Mexico Board of Directors meetings, typically held on the third Wednesday of each month.

“We are optimistic that eligible for-profit and nonprofit developers and builders will take advantage of this 0% interest rate construction loan, and ultimately, provide more homeownership opportunities for New Mexicans,” Hernandez said.