"What actually stacks on top of the tax credit equity, and does any of it get us out of property tax?"
Four soft sources, and only three of them run through Housing New Mexico/MFA
| Source | Administered by | Funding origin | Statutory/regulatory basis |
|---|---|---|---|
| New Mexico Housing Trust Fund (NMHTF) | Housing New Mexico/MFA | State-appropriated | New Mexico Housing Trust Fund Act, NMSA 1978 §§ 58-18C-1 to 58-18C-9 (enacted 2005) |
| National Housing Trust Fund (NHTF) | Housing New Mexico/MFA | Federal (HUD) | 24 C.F.R. Part 93 |
| HOME Investment Partnerships Program | Housing New Mexico/MFA | Federal (HUD) | 24 C.F.R. Part 92 |
| Community Development Block Grant (CDBG) | NM Dept. of Finance & Administration, Local Government Division / Community Development Bureau — NOT MFA | Federal (HUD) | New Mexico Community Assistance Act, NMSA 1978 §§ 11-6-1 to 11-6-9; 2.110.2 NMAC |
For 4% credit deals, NMHTF applications must be submitted simultaneously with the LIHTC application and are heard together at the same MFA Board meeting — treating NMHTF as a source to pursue after a 4% reservation is already in hand runs the timeline backwards. Because CDBG sits outside MFA entirely, it never gets bundled into that same intake; a developer has to run that relationship separately with DFA.
MFA sought a record $135 million special state appropriation to the NMHTF ahead of the 2026 legislative session; the best public reporting available for this research shows the 2026 session instead produced a $45 million severance tax bond earmark for the fund, short of the full ask — this research could not independently confirm whether any additional appropriation followed, so that number should be verified against MFA's own current legislative-tracking page before being relied on in a pro forma.
NHTF and HOME: federal gap dollars with hard per-project caps and their own compliance strings
NMHTF loans are generally underwritten at roughly 3% interest with up to a 40-year amortization (MFA retains discretion to set the actual current rate), with a construction period of up to two additional years — separate from Housing New Mexico's HOME loans, which the Underwriting Supplement caps at 0% interest and an 80-year amortization schedule maturing at a 40-year balloon, a soft-second structure distinct from NMHTF's own terms.
| Source | Cap |
|---|---|
| NHTF, combined with 9% LIHTC | $400,000/project |
| NHTF, non-LIHTC projects | $1,500,000/project |
| HOME (9% round), CHDO | Lesser of $1,250,000 or 80% of MFA-approved TDC |
| HOME (9% round), non-CHDO | Lesser of $500,000 or 80% of MFA-approved TDC |
NHTF carries a 100% Extremely Low Income occupancy requirement — every unit funded must house a household at or below 30% AMI or the federal poverty line, whichever is greater — a much narrower target than the LIHTC election itself. HOME awards to LIHTC Projects are only made in conjunction with a LIHTC award, and are allocated to the highest-scoring CHDO projects first, then to other LIHTC projects, until funds run out; ranking rides entirely on the LIHTC score, not a separate HOME competition.
Leveraging Resources rewards some soft sources, and explicitly excludes others
Up to 10 points are available under Leveraging Resources — 1 point per 1% of Total Development Cost contributed through an irrevocable, non-hard-debt source (cash grants, donated land or buildings, deferred developer fee repayable within 15 years, or government soft loans without required payments during the Affordability Period). A donation of Native American Trust Land qualifies for a flat 5 points regardless of the parcel's appraised value relative to Project cost.
The exclusion list matters as much as the inclusion list: tax abatements, tax-exempt bond financing, and costs a prior owner already paid to remediate the land do not qualify for Leveraging Resources points. The IRB property tax exemption covered below is a real, ongoing cash-flow benefit to the deal — but it earns zero scoring points, because it is a tax abatement in the QAP's own terms, not a contributed source.
Nonprofit/NMHA/TDHE/THA/Government Entity Ownership (5 or 3 points) sits next to Leveraging Resources in the same capital-stack conversation for a reason: claiming it requires the qualifying entity to hold at least 51% of the General Partner interest, receive a Right of First Refusal under IRC §42(i)(7) at a below-market purchase price after the compliance period, and receive at least 10% of the developer fee before any consultant-fee reduction — all three terms feed directly into exit economics and the deferred-fee schedule, not just the scoresheet.
A donor-side state tax credit, not a per-unit state match
New Mexico's Affordable Housing Tax Credit (NMSA 1978 § 7-9I-5, enacted 2005) is easy to mistake for a state LIHTC match; it is not one. It gives whoever donates land, buildings, materials, cash, or services to an MFA-approved Affordable Housing Project — individuals, tribal governments, housing authorities, corporations, partnerships, and nonprofits alike — a transferable voucher worth up to 50% of the donation's value, usable against the donor's own New Mexico personal income, corporate income, gross receipts, or compensating tax (not local-option gross receipts tax or the government gross receipts tax), carried forward up to five years.
The credit is transferable via a Tax Credit Transfer (STC) form, which is what makes it relevant to Leveraging Resources: a donation subsidized 50% by this credit is cheaper for the donor to make, which makes it easier to source — but the credit itself reduces the donor's own tax bill, not the Project's Total Development Cost, and it adds nothing to the deal's own federal 9% or 4% allocation.
Property tax: one narrow, discretionary path — and since 2025, it no longer comes free
New Mexico has no general ad valorem exemption reaching standard private LP/LLC LIHTC ownership. The one real, citable mechanism that does reach private LIHTC ownership is the Industrial Revenue Bond (IRB) structure — under the Industrial Revenue Bond Act / County Industrial Revenue Bond Act — in which a county or municipality takes title to the project real estate, issues revenue bonds, and leases the property back to the developer/owner entity. NMSA 1978 § 7-36-3(A) exempts the lessee's leasehold interest from ad valorem property tax for as long as bonded indebtedness is outstanding, capped at 30 years from the first lease's execution.
This benefit requires the host county or municipality to affirmatively agree to hold title and issue the bonds — often paired with a negotiated PILOT payment — so it is a discretionary, per-project, per-jurisdiction arrangement, not an automatic benefit every applicant receives. MFA separately runs its own conduit tax-exempt bond program supporting 4%/9% deals; that MFA-issued bond financing is a different mechanism from the county/municipal IRB structure and does not, on its own, carry the ad valorem exemption — the exemption specifically requires a county or municipality, not MFA, to hold title. Absent an IRB structure, a standard fee-simple LP/LLC-owned LIHTC property in New Mexico pays full local ad valorem property tax like any other rental property.
The Phase 6 connection runs both ways: the same 2025 amendment that extended New Mexico's Public Works Minimum Wage Act to municipal/county Industrial Revenue Bond projects, effective June 20, 2025, means the same structural choice that buys the property tax exemption now also buys a state prevailing-wage obligation on construction that didn't used to come with it. Modeling the IRB decision as a pure property-tax question, without pricing the labor-cost side, understates what the structure actually costs.
What EZFeasi doesn't do yet for New Mexico's capital stack
EZFeasi has no New Mexico soft-funding source tracker, no IRB/PILOT modeling tool, and no New Mexico Affordable Housing Tax Credit donor-matching tool today. The CRM and partner/funder/investor tooling built for the platform generally is not yet populated with New Mexico-specific NMHTF, NHTF, HOME, or CDBG contacts, deadlines, or award history — assembling this capital stack for a New Mexico deal is, for now, manual outreach to MFA and DFA directly, not anything the platform surfaces or tracks.
Where this goes wrong
- Treating CDBG as an MFA-administered source alongside NMHTF/NHTF/HOME — it runs separately through DFA's Local Government Division/Community Development Bureau under its own statute and application process.
- Pursuing an NMHTF application for a 4% deal after the LIHTC reservation is already secured — 4% NMHTF applications must be submitted simultaneously with the LIHTC application and are heard together at the same MFA Board meeting.
- Assuming the NM Affordable Housing Tax Credit adds credits to the deal's own federal 9%/4% allocation — it's a donor-side credit against the donor's own tax liability, not a per-unit state match.
- Claiming Leveraging Resources points for a tax abatement or for tax-exempt bond financing itself — both are explicitly excluded contribution types under that scoring criterion.
- Assuming any MFA-issued conduit tax-exempt bond carries the IRB ad valorem property tax exemption — the exemption under NMSA 1978 § 7-36-3 requires a county or municipality, not MFA, to hold title.
- Treating the IRB property tax exemption as automatic or self-executing — it requires an affirmative county or municipal decision to take title and issue bonds, typically negotiated alongside a PILOT payment.
- Not checking whether an IRB-financed deal now triggers New Mexico's Public Works Minimum Wage Act — true as of the June 20, 2025 amendment, a real construction-cost consequence that didn't attach to IRB deals before that date.
- Assuming NHTF's per-project cap is the same regardless of whether 9% LIHTC is also in the deal — it's $400,000 when combined with 9% credits versus $1,500,000 for non-LIHTC projects.
- HUD
- LIHTC
- State QAPs
- IRS § 42
- Housing Finance Agencies