MFA Allocates $88 Million in Low Income Housing Tax Credits To Fuel Affordable Housing Developments in New Mexico
The New Mexico Mortgage Finance Authority has awarded a total of $88,346,760 in 4% Low-Income Housing Tax Credits (LIHTC) in 2023 to support affordable housing projects. These tax credits will contribute to the development and preservation of four affordable housing projects totaling 693 units.
The purpose of these federal tax credits is to encourage affordable housing developments. Investors purchase the 4% tax credits which provide approximately 30% to 40% of the total equity for the project. Once an award is granted and construction is completed, the tax credits can be claimed over a 10-year period.
The Federal Tax Code allows privately owned public purpose projects to take advantage of tax-exempt financing through Private Activity Bonds. To be eligible for 4% Low-Income Housing Tax Credits, developers must obtain an allocation of Private Activity Bond Volume Capacity from the New Mexico Department of Finance and Administration State Board of Finance and apply for the 4% tax credits through MFA. Additionally, a project must meet five requirements: 1) located in New Mexico; 2) consist of permanent residential structures used year-round; 3) subject to a Low-Income Use Restriction agreement; 4) available to the public, and 5) comply with all relevant local, state and federal accessibility laws and regulations. To ensure compliance with all requirements, MFA monitors each awarded property annually.
The Low-Income Use Restriction ensures that the rental properties cannot charge rents above a certain amount based on the annual income of the household until the affordability period ends, which is typically 30 years. In addition to the $88 million awarded for 4 % LIHTC projects, MFA previously granted $53 million to five 9% LIHTC competitive projects in May. Isidoro Hernandez, MFA’s Executive Director and CEO indicated that, “The $141 million in total tax credits award this year will enable the development or preservation of close to 1,000 workforce units which thousands of families will call their home. They are key in addressing the housing need, advancing stability and security and will have a significant economic impact.”
Here is a summary of the four affordable housing projects and their funding:
JLG NM SAF 2023 - $33,652,000 – 228 Low Income Units
JLG NM SAF 2023, LLLP focuses on the preservation and rehabilitation of two communities, Sangre De Cristo (a 164-unit community originally built in 1970) and Santa Fe Apartments (a 64-unit community built in 1968). The properties are located within 3 miles of each other in Santa Fe, New Mexico, and benefit from HUD Project-Based Section 8 vouchers. The property will serve families, with apartments ranging from one to four bedrooms, along with new playgrounds, accessible units, and routes to amenities. Additional updates include evaporative coolers, new flooring, energy efficiency upgrades, and landscape improvements focused on water conservation.
JLG NM ABQ 2023 - $24,780,630 – 241 Low Income Units
JLG NM ABG 2023, LLLP focuses on the preservation and rehabilitation of two adjacent family apartment communities, Mountain View (a 106-unit community originally built in 1967) and Mountain View III (a 136-unit community built in 1968). Both properties are in Albuquerque, New Mexico, and benefit from HUD Project-Based Section 8 vouchers. The property primarily targets families, offering mostly two or more-bedroom units suitable for households with children. The rehabilitation will focus on modernization with an emphasis on preserving the property’s affordability for at least 30 years. Upgrades include stucco repairs, energy-efficient improvements, new playgrounds, and addressing accessibility issues.
Peachtree Canyon - $18,095,710– 144 Low Income Units
Peachtree Canyon is a newly constructed housing development in Las Cruces, New Mexico, consisting of 144 units. The location is ideal for families, as it is within walking distance of elementary and middle schools. The project also provides affordable options for income-qualified teachers. Indoor amenities include a management office, lounge, exercise room, office equipment, and secure package drop-off services. Outdoor amenities feature a pool, pickle ball courts, playground areas for various age groups, landscaped courtyards with picnic areas and seating options for small or large gatherings, and walking paths.
Pedrena Apartments - $ 11,818,420 – 80 Low Income Units
Located in Las Cruces, New Mexico, Pedrena Apartments will offer 80 newly constructed units for seniors aged 55 and above with an annual income below $40,000. The property includes a 3-story building with elevators and three single-level duplexes facing El Paseo Road. Amenities will include a common area meeting space with a kitchen, an elevator, a fitness room, a business center, meeting rooms, a dog park, raised community gardens, a fenced perimeter, washers and dryers in each unit, and private patios.
With these substantial investments, MFA aims to address the affordable housing needs of low- and moderate-income households in New Mexico and create sustainable communities for years to come.
For more information on the LIHTC program, please visit: https://housingnm.org/developers/rental/new-mexico-housing-trust-fund