TAX CREDITS & TAX-EXEMPT BONDS: STATE-BY-STATE PREVIEW

NEW MEXICO

BY DANA EFINGER

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

ALBUQUERQUE—Affordable housing developers in New Mexico requested more than $11.7 million in 9 percent low-income housing tax credits (LIHTCs) this year. Seven projects received about $4.94 million in LIHTC reservations. That’s close to a 3 to 1 demand ratio, which was slightly better than in 2006, when the New Mexico Mortgage Finance Authority (NMMFA) reserved almost $4.4 million in housing tax credits on $12.8 million in applications.

Ninety percent of New Mexico’s 2007 credits went to rural projects. Most developments receiving reservations in 2007 were new construction deals. Only 7 percent of reservations went to acquisition- rehabilitation rental housing. Nonprofits were involved in 54 percent of the seven projects that received reservations in 2007. Tribal housing authorities (31 percent) and public housing authorities (15 percent) were the other parties receiving LIHTCs.

NMMFA forward allocated nearly $650,000 in 2008 authority, reducing the credits available in next year’s pool to $3.16 million. The state reserved $305,000 in state housing tax credits in 2007 and plans to offer $3.6 million in state credits in 2008. A state housing trust fund also exists. In 2005, the New Mexico legislature appropriated $10 million from the state’s capital outlay fund to provide initial capital for the fund. Another $3 million was appropriated by the legislature in 2007.

No big changes were incorporated into the state’s 2008 qualified allocation plan. Minor scoring items in the green building criteria were changed, but the overall structure of this category remains unchanged. All projects that received a reservation this year received points for sustainable design, according to Michelle Den Bleyker, housing tax credit program manager for NMMFA.

Developers who received allocations from the state in 2007 and need additional tax credits due to increases in hard construction costs must submit a full application. Developers cannot exceed the cost limit established in their original round and must demonstrate hardship.

On the bonds front, eight multifamily projects totaling 570 units received a total of about $29.9 million in bond financing. The tax-exempt private-activity bond volume cap is estimated to be more than $256 million. How much of that will be set aside for rental housing will be determined by the New Mexico State Board of Finance in December, according to Amy C. Chavez, deputy director.

2008 LIHTC PROGRAM: