Opportunity Enterprise – Housing Development Program

The Opportunity Enterpise – Housing Development application consists of two parts:

Part 1 is an initial screening to determine eligibility for financing. Applicants must provide sufficient evidence that other means of financing their project are unavailable or insufficient.

Part 2 is the  project and financing application. The project information will be scored and prioritized based on the specific criteria in the OEHDRB – HD Evaluation and Prioritization Policy. The financing information will be reviewed for financial soundness and ability to repay the loan.

Developers whose projects are prioritized by the OEHDRB in the project application review will be eligible for consideration of a loan. The loan applications will be underwritten in order of prioritization.

Please note that being prioritized high enough to be recommended for funding does not guarantee your project will receive financing. NMFA will underwrite your application according to statute and policies to determine eligibility and ability to repay the loan.

We recommend you review the scoring matrix in the OEHDRB Housing Development Evaluation and Prioritization Policy  to determine if your project is a good fit for this program and if your application would be competitive.

When can I apply?

• Round 1 will open on September 4, 2024 and close on October 16, 2024.
• $30 million of the $125 million fund is available for Round 1.
• Additional application rounds will be offered after Round 1.

Is there a benefit to applying early?

The loan fund amounts are limited as listed below, therefore applying in an earlier round would avoid the allocated funds already being awarded.

• No more than 50% of the total fund to any one county;
• At least 30% of the fund must be dedicated to projets in rural communities.

There is no benefit to applying early within a round. All applications will be reviewed and prioritized after the round closes.

How do I apply?

• The application is available online at nmfinance.com.
• The application system requires that you set up an account, which will allow you to save your application in progress. This means you can work on your application, save your work, and return to the application to complete it and submit it.
• If you already have an account, please use your existing log-information.

 What is an Authorized Officer?

The application must be submitted by an Authorized Officer. An Authorized Officer is the person authorized by the applicant as having the requisite power and authority to sign the Officer’s Certificate and legally bind the applicant to its obligations under the Loan Agreement.

• Loan amounts may not exceed $15 million.
• The interest rate will be equal to 60% of the Wall Street Journal prime rate on the date the loan is approved, but will be no less than 3.5%. The interest rate is fixed for the term of the loan.
• Loan terms shall not exceed forty years with a preference for terms not exceeding 20 years.
• There is no penalty or charge for prepayment of the loan.
• Housing Development Loans for workforce development housing projects must contain deed restrictions, as determined by the NMFA, during the repayment term of the housing development loan, with a minimum duration of ten (10) years.
• Limitations on fees paid to developers include developer fees limited to 12% of the total project costs and 5% of the total acquisition costs; developer fees will be disbursed throughout the project life cycle after meeting key milestones; limits on developers being reimbursed from loan proceeds for prior land acquisitions.
• Additional loan terms and information are found in the rules and policies governing the program.

Loan amounts of up to $15 million are available.

The OE-Housing Development loans are intended as gap financing to help a project become possible. The OE-HD loan amounts depend on the size of the project and are not intended to fund the entire project.

The loan funds must be used for the construction of workforce housing or for the creation of infrastructure for affordable housing to increase the supply of attainable housing for New Mexicans.

All applicants will be required to submit a Market Study that has been completed within the last six months. The Market Study parameters were established by the MFA and can be found HERE.

• Project applications are reviewed for completeness by NMFA staff.
• Eligible projects with complete applications are scored and ranked according to the criteria in the Opportunity Enterprise Review Board Evaluation and Prioritization Policy.
• The ranked project applications are reviewed by the Opportunity Enterprise and Housing Development Review Board, which prioritizes the projects recommended for financing.
• Projects recommended for financing will be underwritten by NMFA according to NMFA’s policies to assess the applicant’s ability to repay the loan. Underwriting will be done in order of prioritization.
• Please note that the loan application review process will involve a thorough examination of documents and information provided. Applicants may be asked for additional information during the review and underwriting process.

Applications will be scored and ranked according to the Opportunity Enterprise Housing Development and Prioritization Policy.

• No more than $15,000,000 may be awarded to a single project.
• Total outstanding loans in any one county may not exceed 50% of the fund capital.
• At least 30% of the fund must be dedicated to projects in rural communities.
• Developers may only participate in one project application per application round.

Equity Requirement: Applicants are required to contribute a minimum of 10% of the loan amount in the form of owner contributions, cash or in-kind, or down payment.

Collateral; Loan-to-Value Requirement: Collateral includes all legally available collateral including real estate. The loan-to-value ratio will be up to 100%, subject to additional restrictions established in policy.

Guarantees: All loans will require a personal guarantee from one or more of the following persons:

− a partner, or member of the Applicant
− a joint venturer with the Applicant
− any stockholder of the Applicant
− the parent corporation or a partner, member, or stockholder of the parent corporation if the Applicant is a subsidiary

All applicants will be required to authorize NMFA to obtain credit reports on all owners and guarantors.

After project completion, borrowers shall submit financial statements and business
performance reports not less than semi-annually. Business performance reports shall include, but are not limited to:

1) total number of affordable housing units and workforce development housing units supported by the Housing Development Assistance;

2) Occupancy data and rent rolls, as applicable;

3) Job creation metrics; and

4) Certification of all representations, warranties, and covenants; and certification that there have been no ownership changes in the Applicant

Semi-annual reporting will be required after the loan is fully disbursed.

“Act” means the Opportunity Enterprise and Housing Development Act, Sections 6-34-1 through 6-34-15, NMSA 1978, as the same may be amended and supplemented.

“Affordable Housing” means residential housing primarily for persons or households of low or moderate income as defined in a local housing plan or by programs managed by the New Mexico Mortgage Finance Authority.

“Affordable Housing Infrastructure Project” means infrastructure projects needed to support affordable housing.

“Application” means a written document made publicly available by the authority and filed with the authority for the purpose of evaluating, in consultation with the department, the applicant’s qualifications and proposed projects for types of assistance which may be provided by the authority under the act.

“Attainable Housing” means affordable housing or workforce development housing.

“Below-Market Housing” means housing that is offered below the median sales price of homes in the area.

“Employment Centers” means areas of existing or planned economic activity and concentration of employment opportunities as determined by the regional council of governments in coordination with the counties they represent.

“Fund” means the Housing Development Revolving Fund.

“Housing Development Assistance” means loans made by NMFA to housing development projects.

“Housing Development Committee” means a standing committee appointed by the chairman of the board from the members of the board pursuant to the bylaws to review proposed housing development projects to be recommended for funding from the housing
development revolving fund.

“Housing Development Partner” or “Partner” means a domestic corporation, a general partnership, a limited liability company, a limited partnership, a public benefit corporation, a nonprofit entity or any other private business entity or combination thereof that the NMFA determines is or will be engaged in a project that creates or expands housing within the state and is eligible for housing development assistance pursuant to the Act.

“Housing Development Project” means an affordable housing infrastructure project or a workforce development housing project.

“Infrastructure” means improvements tied to or enabling the development of housing, including: (i) sanitary sewage systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge; (ii) drainage and flood control systems, including collection, transport, diversion, storage, detention, retention, dispersal, use and discharge; (iii) water systems for domestic purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal; (iv) areas for motor vehicle use for road access, ingress, egress and parking; (v) trails and areas for pedestrian, equestrian, bicycle or other nonmotor vehicle use for access, ingress, egress and parking; (vi) parks, recreational facilities and open space areas to be used by residents for entertainment, assembly and recreation; (vii) landscaping, including earthworks, structures, plants, trees and related water delivery systems; (viii) electrical transmission and distribution facilities, including renewable energy infrastructure; (ix) natural gas distribution facilities; (x) lighting systems; (xi) cable or other telecommunications lines and related equipment; and (xii) traffic control systems and devices, including signals, controls, markings and signs.

“Market Study” means a project description and analysis of geographic conditions, demographic trends, and competitive market conditions that will impact the success of the project, including absorption estimates for the subject property. Market Studies must be dated within the last six months and must meet the content parameters established by the MFA.

“MFA” means the New Mexico Mortgage Finance Authority.

“Middle-Income Workers” means families with incomes that fall between the lesser of a local jurisdiction’s upper limit for housing assistance by relevant housing type or by the MFA’s upper limit for housing development assistance and 300% of the US Housing and Urban Development Area Median Income for the county.

“NMFA” means the New Mexico Finance Authority.

“OE Board” means the Opportunity Enterprise and Housing Development Review Board created by the Act.

“Policy” means the Housing Development Evaluation and Prioritization Policy.

“Project” means an affordable housing infrastructure project or a workforce development housing project.

“Rural” means any area not considered Urban.

“Site Control” means at least one of the following: 1. a fully executed purchase contract or purchase option,
2. a written governmental commitment to transfer or convey the property to the applicant, or 3. a fully executed lease that terminates no sooner than five years after the loan matures and/or five years after the income-restriction compliance period
end date.

“Total Project Cost” means the total of all costs incurred or to be incurred by the Housing Development Partner in planning, designing acquiring, constructing, renovating, rehabilitating and financing a Housing Development Project, including
predevelopment costs and Market Studies. Total Project Costs will be adjusted to exclude any construction costs associated with affordable housing, market rate housing, and commercial space.

“Universal Design” means a design approach to creating spaces, features and products to maximize the number of people who can independently live in that space, regardless of age, stature, size or physical ability.

“Urban” means a continuously built-up area with a population of 60,000 or more. Urban areas may include one or more municipalities or census designated places.

“Workforce Development Housing” means below-market housing addressing demand for workforce housing for middle income workers in proximity to employment centers.

“Workforce Development Housing Project” means a residential real estate development project that involves the purchase, planning, designing, building, surveying, improving, operating, furnishing, equipping or maintaining of land, buildings or infrastructure that provides housing, including housing the provides the option of home ownership.

“Zoning Reforms” means policies, procedures and regulations implemented by political subdivisions intended to decrease the costs and timing of constructing affordable housing and workforce housing, including expedited permitting, high density zoning, and other criteria as determined by policies of the board. 

The Housing Development Revolving Fund is governed by the Opportunity Enterprise and Housing Development Review Board and is administered by NMFA.