Employees of what was once known as the New Mexico Mortgage Finance Authority pose in front of their new logo and name, Housing New Mexico, after a news conference Wednesday in Albuquerque. The board that oversaw the authority on Wednesday withdrew a proposal that would have significantly raised the income limits to qualify for a range of housing subsidies. (Photo by Patrick Lohmann / Source NM)
The chairman of the New Mexico Housing Authority board decided to wait before considering a significant increase in the income ceilings for eligibility for several affordable housing programs.
The Housing New Mexico board did not describe the reason for the policy change at its meeting Wednesday, and no justification was provided in materials provided to the board ahead of the meeting.
The board did this because members heard in recent days that state lawmakers and others were concerned about the change, housing authority spokesperson Kristie Garcia said.
“We want to make sure we understand their concerns,” Garcia said. “We would like more time to provide legislators with more information about how funds are allocated across the housing continuum to create a better understanding of where and how funds are used.”
Housing New Mexico, which recently changed its name from New Mexico Mortgage Finance Authority, spends tens of millions of dollars a year on multiple programs to make housing affordable, including down payment assistance, first-time homebuyer programs, weatherization and more. But these programs are limited to those whose incomes fall below a certain percentage of the region’s average income.
The authority hoped to revise regulations to increase the limit from 150% of the region’s average income to 200%. For example, the average income of a four-person household in Albuquerque in 2023 was $79,900. Under current policy, that household could qualify if they earn $119,850 per year. The new proposed policy would mean they could earn $159,800 a year and still qualify.
Under the new proposed policy and the current 30-year average mortgage rate of 6.89%, that same household, if they had no debt and made a $20,000 down payment, could comfortably afford a $577,000 home, according to a affordability calculator from real estate website Zillow.
The average income in the area is higher or lower in different parts of the state. For example, in Los Alamos it is $151,300 for a household of four, so the new limit for them would be just over $300,000. In Mora County, a household of four could make up to about $141,000 and still qualify.
The proposed change came about a year after the authority increased it from 120% to 150%.
Although there was no public discussion Wednesday, authority officials said at a November meeting of the authority’s legislative oversight committee that the change was necessary due to factors including rising home prices.
“This change is based on a number of projections and analysis we have done regarding the rise in housing costs, interest rates remaining at higher levels and, more recently, the limited supply of homes on the market,” said Robyn Powell , director of the authority’s policy and planning. “Where possible, we want to provide additional resources and flexibility.”
Lawmakers on the committee ultimately approved Housing New Mexico’s proposed increase in the income limit, but it still needed to be approved Wednesday to take effect. Despite approving the change, lawmakers raised questions about data showing the increase was necessary.
Rep. Kathleen Cates (D-Rio Rancho) asked Powell for more data because it seemed to her that the increase would make the vast majority of New Mexicans eligible for subsidized housing.
“I want to subsidize housing, but this just seems like a big step in just one year,” she said. “If you had some data to back that up: ‘Hey, we’re in a crisis and we need to act quickly, and here’s the data,’ then I would feel more comfortable with this.”
Authority officials noted that the rule would not apply to federal housing subsidies, which have a lower cap, and they suggested they could change the rule in the future if it turns out to be benefiting the wrong people. But amid rising home prices and efforts to get working people living in their own communities, they felt the increase gave them more flexibility.
The proposed policy also affected others outside the legislative committee. Daniel Werwath, who heads Gov. Michelle Lujan Grisham’s newly created Office of Housing, said Wednesday he was pleased the administration withdrew the proposal.
“Overall, we believe that expanding limited public resources to higher income groups is not the best way to address the historic housing shortage,” Werwath told Source New Mexico in a statement. “Instead, we would like to see a concerted effort to close the supply gap, with a focus on creating new starter homes that New Mexicans can afford without subsidies.”
During the last legislative session, the authority received a one-time payment of $50 million for its Housing Trust Fund, which funds many of the programs that would be covered by the new increase. It also received approximately $38 million in recurring severance tax revenue for the same fund.
The authority is asking the Legislature for $500 million during the upcoming session that starts in January. Lujan Grisham’s recent budget proposal calls for at least $100 million to be spent on affordable housing and anti-homelessness initiatives amid a statewide housing crisis.
