NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Varela

 

DATE TYPED:

02/24/03

 

HB

222/aHCPAC

 

SHORT TITLE:

Statewide Housing Rehabilitation Loans

 

SB

 

 

 

ANALYST:

Gilbert

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$2,500.0

 

 

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

LFC Files

 

Response Received From

New Mexico Mortgage Finance Authority (NMMFA)

 

SUMMARY

 

     Synopsis of HCPAC Amendment

 

The House Consumer and Public Affairs Committee amendment to House Bill 222 makes a technical correction to clarify that the appropriation in this bill is to be used to contract with the New Mexico Mortgage Finance Authority for a housing rehabilitation loan program.

 

     Synopsis of Original Bill

 

House Bill 222 appropriates $2.5 million to the Department of Finance and Administration to implement a housing rehabilitation loan program for persons of low or moderate income. The New Mexico Mortgage Finance Authority (NMMFA) will administer this program on a contractual basis.

 

     Significant Issues

 

According to this bill, the NMMFA is responsible for establishing a housing rehabilitation loan program to rehabilitate substandard housing, creating of a revolving loan fund to make loans to eligible persons, and to receiving repayment of those loans.  The NMMFA shall also promulgate rules for the implementation and administration of this program.

 

FISCAL IMPLICATIONS

 

The appropriation of $2,500.0 contained in this bill is a recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2004 shall revert to the general fund.

 

According to the NMMFA, a substantial amount of the loan fund (excluding allocations for administrative costs and estimated loan defaults of 10%) would be permanent.

 

ADMINISTRATIVE IMPLICATIONS

 

The NMMFA will combine the administrative details of this program with current rehabilitation loan programs to minimize the administrative overhead associated with implementing HB 222.

 

OTHER SUBSTANTIVE ISSUES

 

The NMMFA states that there is a great need for assistance to eligible persons in need of housing rehabilitation funds. A grant program would be inefficient, as it would not assign responsibility to the recipients and would cause a permanent financial burden to the state.

 

According to the NMMFA, the housing stock available to many low and moderate-income persons is continuing to deteriorate. This development will devalue the affected properties, thus causing a negative effect on property taxes and, in certain cases, cause property to become un-repairable.

 

RLG/njw:yr