New Mexico first-time homebuyer grants and down payment assistance (2026)

Two tracks: FirstHome for first-time buyers, HomeForward for everyone else

FirstHome is a 30-year fixed first mortgage for buyers who have not owned and lived in a home as their main residence in the past three years. The first-time rule is waived if the home is in a targeted census tract ⁠². FirstHome is funded with tax-exempt mortgage revenue bonds, so county income and price caps apply. It is the only first mortgage that can carry FirstDown, FirstDown Plus or HomeNow ⁠²⁠³.

HomeForward has no first-time buyer rule. Its income limits are higher, set at 150% of area median income or 200% in high-cost areas ⁠⁸. It pairs with one assistance loan, HomeForward DPA. That loan pays up to 3% of the purchase price as a 15- or 10-year amortizing second mortgage with monthly payments ⁠⁸. It can go only toward the down payment. On VA, USDA and HUD Section 184 loans, which need no down payment, it may cover closing costs instead ⁠⁸. On Oct. 20, 2026, the 15-year HomeForward second mortgage was posted at 7.875% ⁠¹⁰. Both tracks require a 620 credit score and occupancy within 60 days of closing ⁠²⁠⁷. You do not need to have lived in New Mexico for any set time, as long as the home you buy is in the state ⁠¹¹.

On Oct. 20, 2026, Housing New Mexico posted these rates: FirstHome government loans at 7.000% and FirstHome Fannie Mae at 7.125%. HomeForward government loans were at 7.875%, with conventional HomeForward between 7.625% and 7.875% ⁠¹⁰. If you buy in a targeted area, FirstHome gives you the lowest rate it offered in the previous 12 months ⁠¹¹. Lenders may charge you an origination fee of no more than 0.5% on FirstHome and HomeForward, and no discount points ⁠²⁠⁷.

FirstDown: a 4% second mortgage you repay monthly

FirstDown is a repayable loan, not a grant. It pays up to 4% of the purchase price, with a minimum of $1,000, toward the down payment and closing costs ⁠³⁠⁴. It is a fixed-rate second mortgage that amortizes over 30, 15 or 10 years with monthly principal and interest, and it has no prepayment penalty ⁠³. Its rate is tied to FirstHome by policy. The 30-year rate can be at most 2.00 points above the FirstHome Fannie Mae rate for buyers under 80% of area median income, the 15-year at most 1.50 points above, and the 10-year at most 1.00 point above ⁠³. On Oct. 20, 2026, FirstDown 15 was posted at 7.375% and FirstDown 30 at 8.875% ⁠¹⁰.

On a $250,000 home, the 4% maximum is $10,000: about $92 a month over 15 years or $80 over 30 years at those rates. FirstDown money is available on a continuous basis, and the lender’s fee on it is capped at $100 ⁠³.

Stacking FirstDown Plus and the $35,000 ceiling

FirstDown Plus is a third mortgage of exactly $10,000 at 0.00% interest. You repay it at $55.56 a month for 15 years, and any balance is due if you sell, refinance or transfer the home ⁠⁴. It can be used only toward the down payment, not closing costs. It must sit behind a FirstHome first mortgage and either FirstDown or HomeNow ⁠⁴. Its funds are limited and handed out first come, first served. Housing New Mexico still listed it at 0.000% on Oct. 20, 2026 ⁠⁴⁠¹⁰. Total Housing New Mexico assistance on one purchase, from all its programs, may not exceed $35,000 ⁠³⁠⁴.

HomeNow’s forgivable $7,000 and why the money is hard to get

HomeNow is the only forgivable statewide loan. It is a fixed $7,000 at 0% with no monthly payment. The 10-year note is forgiven in the 11th year if you keep living in the home and do not sell, refinance, transfer or rent it out. If you leave earlier, the full $7,000 is due ⁠⁵. HomeNow requires first-time buyer status and household income at or below 80% of area median income. It does not get the higher income limits that apply in targeted tracts. The home’s price must be within the lower of the HomeNow and FirstHome caps ⁠⁵.

Funding is the catch. On Oct. 1, 2025, Housing New Mexico told lenders that HomeNow funds were depleted. If the reservation system shows no HomeNow money, the lender can switch you to FirstDown and keep FirstDown Plus ⁠⁶. The July 20, 2026 policy keeps the program in place on limited, first-come funds, with part of the money set aside for rural communities and economically distressed tracts ⁠⁵.

2026 county income and price limits (effective July 27, 2026)

The limits changed on July 27, 2026. FirstHome and FirstDown use two household-size bands. HomeForward uses 1-4 and 5+. HomeNow uses an 80% of area median income table for 1 to 8 people ⁠²⁠⁵⁠⁹.

Scroll the table sideways to see every column.

In a targeted census tract, FirstHome and FirstDown allow $120,480 / $140,560 in the Albuquerque MSA and $106,800 / $124,600 elsewhere, with a $692,211 price cap statewide ⁠². For other counties, use Housing New Mexico’s limits page. Your loan officer can check whether an address is in a targeted tract ⁠⁹.

Housing New Mexico counts only the income of borrowers, not of other adults in the home ⁠¹¹.

No Mortgage Credit Certificate, and the FirstHome recapture tax

As of Oct. 20, 2026, Housing New Mexico’s list of current programs did not include a Mortgage Credit Certificate. Its programs are FirstHome, FirstDown, FirstDown Plus, HomeNow, HomeForward with HomeForward DPA, NewHome Rate Advantage (a permanent rate reduction on newly built homes financed through HomeForward) and manufactured home financing ⁠¹.

FirstHome’s bond funding does carry a federal recapture tax. It applies only if three things are all true: you sell within nine years, you make a net profit, and your household income has grown more than 5% a year, measured from the FirstHome income limit when you bought ⁠¹². The tax can never be more than 6.25% of the original loan or half of your net gain, whichever is less. You report it on IRS Form 8828. Refinancing without selling does not trigger it ⁠¹².

Santa Fe County, Valencia County and Albuquerque

• Santa Fe County Downpayment Assistance Program. This is a deferred loan at 0% with no monthly payments. It pays up to $20,000 at or below 65% of area median income, up to $15,000 at 65% to 80%, and up to $10,000 at 80% to 100% ⁠¹³. You must be a first-time buyer with a homebuyer education certificate, a household budget and a mortgage already approved, pending the county money. The county’s Loan Review Committee makes the final decision. The county lien sits behind your first mortgage ⁠¹³. The page does not say what triggers repayment; ask staff.
• Valencia County Down Payment Assistance Program. Homewise runs this for Valencia County. It offers up to $30,000. On a newly built home, the builder must contribute at least $10,000 more, as extra assistance, a price cut, a closing cost credit or a rate buydown. It covers Los Lunas, Belen, Peralta, Bosque Farms and Tome. It is open to first-time buyers and current owners buying a new main home at up to 150% of area median income ⁠¹⁴. Funds are limited, and sales must close by June 30, 2027. The page does not say whether the money is a grant or a loan ⁠¹⁴.
• City of Albuquerque. The city does not take down payment applications directly. Its affordable homeownership page sends buyers to Homewise (505-243-6566), Greater Albuquerque Habitat for Humanity (505-265-0057) and Sawmill Community Land Trust (505-764-0359) ⁠¹⁵.

We could not confirm a City of Las Cruces down payment program on Oct. 20, 2026. The city’s website blocked automated access, so this guide does not list one.

Credit, debt ratios and the counseling certificate

Credit. Housing New Mexico requires a 620 score on every program. FirstHome and HomeForward accept alternative credit in some cases if you have no score ⁠²⁠⁷.

Debt-to-income. None of Housing New Mexico’s July 2026 program policies publishes a debt-to-income cap. Each first mortgage is underwritten under the FHA, VA, USDA, HUD Section 184, Fannie Mae or Freddie Mac rules for its loan type, so your loan officer sets the ratio you must meet ⁠²⁠⁷.

Education. FirstHome requires pre-purchase counseling for the borrower and every co-borrower. You can take eHomeAmerica online or attend in person through a HUD-approved counseling agency ⁠². For HomeNow, certificates from mortgage insurance companies are not accepted ⁠⁵. HomeForward requires counseling only for first-time buyers ⁠⁷. A certificate stays valid for one year ⁠¹¹.

Getting a Housing New Mexico loan through a participating lender

1. Pick your track

   If you have not owned a home in three years, start with FirstHome and FirstDown. If you have, or your income is over the FirstHome limit, use HomeForward with HomeForward DPA ⁠²⁠⁷.

2. Check your county limits

   Compare your household income and target price with the July 27, 2026 tables. Near a cap, ask about targeted tracts ⁠⁹.

3. Finish counseling early

   Take eHomeAmerica or a HUD-approved class before you make an offer. The certificate lasts a year ⁠²⁠¹¹.

4. Choose a participating lender

   Only approved participating lenders can originate these loans and reserve Housing New Mexico money. Find one on the agency’s lender list ⁠¹⁠³.

5. Gather documents

   Bring pay stubs, tax returns with W-2s, bank and retirement statements and a purchase agreement. Santa Fe County’s application asks for exactly these, plus a sworn occupancy statement and your first mortgage approval ⁠¹³.

6. Lock and reserve

   The lender locks your rate and reserves the assistance online. Ask the lender to check that day whether HomeNow or FirstDown Plus money is available ⁠⁴⁠⁵⁠⁶.

7. Pass compliance review and close

   Housing New Mexico reviews every file before closing, which usually takes about three business days ⁠¹¹. Keep your second-lien notes and, on FirstHome, the recapture disclosure ⁠¹².

For local money, apply to Santa Fe County after your mortgage is approved, or call a Homewise Home Purchase Advisor in Valencia County ⁠¹³⁠¹⁴. Other states are compared on the first-time homebuyer grants page.