Fannie Mae plans to expand its presence in New Mexico by opening a field office in Albuquerque and providing $3 billion in financing for affordable housing over the next five years.

The program, unveiled last week, will target 33,000 low- to middle- income New Mexico families.

The $3 billion plan is a "huge number" for a state with a population of 1.7 million, said Mark Vanderlin, a housing-impact specialist in Fannie Mae's Dallas regional office.

The Albuquerque office will be the 29th Fannie Mae has opened as part of its program to finance more than 10 million homes this decade. Only nine other cities or states selected for the program have received equivalent or greater financing commitments.

New Mexico's rural areas have aging housing stock and many low-income residents, said Mr. Vanderlin. In addition, the city of Albuquerque is trying to sell most of its public housing units, many of them single-family dwellings, he said.

Fannie reported that a major roadblock to homeowning in New Mexico is a lack of savings for down payments. The secondary market agency is to supply $50 million of mortgage funds that give homebuyers the choice of 15- or 30- year fixed rate mortgages, with as little as 3% of the purchase price for a down payment, which may come from unsecured debt or a gift.

Fannie will offer an additional $15 million through the New Mexico Mortgage Finance Authority, and it also created a $5 million New Mexico Affordable Housing Fund to supply debt financing to nonprofit and for- profit developers.

In rural areas, Fannie is working with the state's mortgage finance authority on a rehabilitation program specifically for lower-income areas in northern New Mexico, said Mr. Vanderlin. It hopes to help low-income families renovate their homes and banks expand affordable-mortgage lending.

In urban areas, Fannie will offer affordable-mortgage financing that will let homebuyers make low down payments. The city of Albuquerque is selling nearly 700 former public housing rental units, said Mr. Vanderlin.

The secondary market agency is also hoping to increase its business with Native Americans.

"It's a market that is in its infancy, but we want to increase the amount of business we do," Mr. Vanderlin said, noting that 8.5% of New Mexico's population is Native American.

Fannie will supply up to $6 million of mortgage financing for the Pojoaque and Laguna Pueblos and the Navajo Nation. The agency has established loan initiatives for buying or refinancing, but its focus will be on the purchase of new-construction loans, said Mr. Vanderlin.

"There are housing shortages on all of the pueblos and reservations," he said. "So their greatest need is new construction."

A spokesman for Freddie Mac said his agency also provides, in the general course of its business, affordable-housing loans to low- and moderate-income New Mexicans.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.