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

SPONSOR Lujan, B.

ORIGINAL DATE

LAST UPDATED

2/8/06

HB 659

SHORT TITLE New Mexico Housing Trust Fund

SB

ANALYST Kehoe

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$5,000.0

NFI Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$5,000.0

NFI

NFI Non-Recurring Housing Trust

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

New Mexico Mortgage Finance Authority (MFA)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Bill 659 transfers $5 million from the general fund to the New Mexico Housing Trust

Fund for the purpose of caring out the provisions of the New Mexico Housing Trust Fund Act.

The New Mexico Mortgage Finance Authority (MFA) is the trustee of the fund and the State In-

vestment Council acts as investment agent for the fund.

House Bill 659 – Page

2

FISCAL IMPLICATIONS

The New Mexico Housing Trust Fund was created in 2005, Chapter 105, initially capitalized

with a $10 million appropriation. The purpose of the trust fund is to provide infrastructure for

affordable housing statewide.

The fund is managed by the New Mexico Mortgage Finance Au-

thority in conjunction with a Housing Trust Fund Advisory Committee. The MFA governing

body is responsible for ensuring that on an annual basis the total funds awarded for housing ac-

tivities attract at least three times as much funding from other sources.

House Bill 659 provides a transfer of $5 million to the Housing Trust Fund on the effective date

of enactment of the bill. Any unexpended balances remaining at the end of a fiscal year shall not

revert to the general fund.

SIGNIFICANT ISSUES

Over 29 applications were submitted to MFA for funding in its inaugural round of financing. Of

the proposed projects, nine were funded for over $6 million. According to MFA, the funding

will result in the development or rehabilitation of 578 housing units throughout the state, 544 of

which will be single family homeownership units. The projects leveraged an additional $103

million in other financing sources. The majority of the units will house low and moderate income

families.

According to MFA, six more applications were received in the second application process which

ended January 13, 2006 totaling $5.2 million. However, only $4 million remains in the Housing

Trust Fund. The MFA anticipates the 2005 funding will be entirely obligated by September 30,

2006.

House Bill 659 would provide additional funding to allow another round of applications to meet

unaddressed housing needs throughout the state and will sustain the purpose of the fund.

OTHER SUBSTANTIVE ISSUES

The New Mexico Housing Trust Fund Advisory Committee consists of nine members who shall

represent geographically the state, affordable housing advocates and practitioners. The nine

members will consist of three public members appointed by the governor; three public members

appointed by the President Pro Tempore of the Senate; and three public members appointed by

the Speaker of the House of Representatives. Members of the committee shall be appointed for

two-year terms and be eligible for reappointment.

LMK/nt