Pairing New Mexico down payment assistance with a VA loan
VA loans don't require a down payment, so why would a Veteran add New Mexico down payment assistance on top? One reason: closing costs and prepaids. On a $0-down VA loan, MFA assistance can get an eligible buyer close to zero cash to close.
Most national VA lenders ignore New Mexico's state assistance entirely. Their loan officers don't know how Housing New Mexico's (MFA) programs pair with a VA first mortgage. That is the New Mexico-specific gap we close.
What Housing New Mexico (MFA) assistance is
Housing New Mexico (the Mortgage Finance Authority, or MFA) pairs a fixed-rate first mortgage with down payment and closing-cost assistance. To use the assistance you take an MFA first mortgage such as FirstHome, then add a second-mortgage assistance product.
| Program | Assistance |
|---|---|
| FirstHome + FirstDown | MFA's first mortgage plus a FirstDown down payment assistance second |
| HomeNow | Up to $7,000 at 0% interest, forgivable after 10 years (for FirstHome buyers at or below 80% of area median income) |
| HomeForward | MFA's newer mortgage-plus-assistance program (confirm current terms with us) |
How it pairs with a VA loan
Your VA first mortgage covers the purchase with $0 down for full-entitlement Veterans. MFA assistance then covers closing costs and prepaids, which is where most of a VA buyer's remaining cash goes. Because the MFA second is a separate lien from a separate agency, it does not touch your VA entitlement.
One rule matters: only one down payment assistance program applies per transaction. We help you decide whether MFA assistance is the right fit for your purchase.
Things to watch
- Forgivable, not free forever. HomeNow's $7,000 is forgiven after 10 years in the home; if you sell or move earlier, the balance is due.
- Education is required. MFA requires a homebuyer education course before closing.
- Income and price limits. MFA sets income and purchase-price limits that vary; we confirm your figures up front.
- Credit. Plan on roughly a 620 credit score for MFA programs.
Example — Albuquerque VA buyer
A full-entitlement Veteran buys a home in Albuquerque (Bernalillo County) with a VA loan at $0 down. The VA funding fee is waived because the buyer has a service-connected disability rating. The buyer pairs MFA assistance to cover most closing costs, walking in with little cash to close.
- VA first mortgage: $0 down, funding fee waived (service-connected disability)
- MFA HomeNow: up to $7,000 toward closing costs and prepaids (0% interest, forgivable after 10 years)
- Bernalillo County property tax and New Mexico homeowners insurance are escrowed into the payment
We model the full payment before you write an offer.
Frequently asked questions
Can I use New Mexico DPA on a VA jumbo loan?
MFA programs are built for loans within standard limits and have their own loan-amount and price caps. Above the conforming limit you can still use a VA jumbo with full entitlement, but typically without the MFA second. We run the math both ways.
Does using New Mexico DPA hurt my VA entitlement?
No. The MFA second is a separate lien from a separate agency. Your VA first mortgage uses entitlement; the MFA second does not, so you preserve future-purchase entitlement.
Is MFA assistance a grant I don't pay back?
HomeNow is a 0% interest second that is forgiven after 10 years in the home, so it functions like a grant if you stay; sell or move sooner and the balance is repaid. We confirm the exact terms for your product.
What do I need to qualify for MFA?
Plan on meeting MFA's credit (around 620), income, and purchase-price limits and completing a homebuyer education course before closing.