economic development resource guide 2011

RESOURCE GUIDE 2011Economic Development

Energizing Your Local Economy

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ENERGIZING YOUR LOCAL ECONOMY

Course Developed By: Larry Meeker

Federal Reserve Bank of Kansas City

Workbook Prepared By: Kathy McCormick

New Mexico Economic Development Department

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KNOW OF ANY NEW PROGRAMS?

HAVE WE INADVERTENTLY OMITTED ANY PROGRAMS?

DO YOU HAVE ANY PERTINENT INFORMATION FOR THIS MANUAL?

Please feel free to contact us. Annual updates of the manual will be provided on request. In addition, we will be happy to send updates on pertinent changes in

program criteria and on new programs.

Contact: Kathy McCormick

New Mexico Economic Development Department [email protected]

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TABLE OF CONTENTS Development Finance Acronyms...................................................................................... 5 Development Finance Glossary ...................................................................................... 11 COURSE WORKBOOK: Development Finance ........................................................................................................ 1 A Primer on the Technique and the Issues Lazy Fair............................................................................................................................. 2 A Community Development Case Study PROGRAM REFERENCE GUIDE: Program Reference Guide ................................................................................................ 1 Program Index ................................................................................................................... 2 PROGRAMS: 1. Tax Credits, Exemptions and Deductions 2. Rent Supplements 3. Interest Rate Subsidies 4. Equity Grants 5. Loan Guarantees 6. Subordinated Mortgages 7. Technical Assistance

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8. Maturity Linked Funding 9. Community Assistance 10. Additional Programs

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DEVELOPMENT FINANCE ACRONYMS AHP - Affordable Housing Program AIDA - All Indian Business Development Program AIP - Airport Improvement Program AIPC - All Indian Pueblo Council ANA - Administration for Native Americans ARM - Adjustable Rate Mortgage ATP - Advanced Technology Program BBER - Bureau of Business and Economic Research BIA - Bureau of Indian Affairs BIC - Business Information Center CAA - Community Action Agency CBO - Community-Based Organization CD - Certificate of Deposit CDBG - Community Development Block Grant CDC - Certified Development Company or

Community Development Corporation CDCU - Community Development Credit Union

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CDRLF - Community Development Revolving Loan Fund CHAS - Comprehensive Housing Affordability Strategy CLT - Community Land Trust CMO - Collateralized Mortgage Obligations COG - New Mexico Council of Governments COL - Contract Loan Program CRA - Community Reinvestment Act DELTA - Defense Loan and Technical Assistance DFA - New Mexico Department of Finance and Administration ECOA - Equal Credit Opportunity Act EDA - Economic Development Administration EDD - New Mexico Economic Development Department ELCDC - Enchantment Land Certified Development Company ELF - Enterprise Loan Fund ESOP - Employee Stock Ownership Plan ESOT - Employee Stock Ownership Trust EUR - Expiring Use Restrictions EWCP - Export Working Capital Program Eximbank - Export-Import Bank FAMC - Federal Agriculture Mortgage Corporation

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FHA - Federal Housing Administration FHL Bank - Federal Home Loan Bank FHLMC - Federal Home Loan Mortgage Corporation FMR - Fair Market Rents FNFP - First Nations Financial Project FNMA - Federal National Mortgage Association FSA - Farm Service Agency FSC - Foreign Sales Corporations GNMA - Government National Mortgage Association HMDA - Home Mortgage Disclosure Act HOME - Home Investment in Affordable Housing Program HOPE - Home Ownership and Opportunity for People Everywhere HTF - Housing Trust Fund HUD - Department of Housing and Urban Development IRB - Industrial Revenue Bond IRP - Intermediary Relending Program IRS - Internal Revenue Service JTIP - Job Training Incentive Program LDC - Local Development Corporation LIHTC - Low-Income Housing Tax Credit Program

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LTV - Loan-to-Value Ratio MACRS - Modified Accelerated Cost Recovery System MBDA - Minority Business Development Agency MBE - Minority-Owned Business Enterprise MFA - New Mexico Mortgage Finance Authority NADBank - North American Development Bank NAFTA - North American Free Trade Agreement NCNMEDD - North Central New Mexico Economic Development District NEDA - National Economic Development Associates NHS - Neighborhood Housing Services NIST - National Institute of Standards and Technology NMCDLF - New Mexico Community Development Loan Fund NMCF - New Mexico Community Foundation NMFA - New Mexico Finance Authority NMNABDC - New Mexico Native American Business Development Center NMRIRP - New Mexico Rural Intermediary Relending Program NMSBDC - New Mexico Small Business Development Center NMSDC - National Minority Suppliers Development Council NPS - National Park Service

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NRC - Neighborhood Reinvestment Corporation OWBO - Office of Women's Business Ownership PC - Participation Certificate PCA - Production Credit Association PHA - Public Housing Authority PUD - Planned Unit Development RA - Redevelopment Area RBCS - Rural Business-Cooperative Service RD - Rural Development RGMPC - Rio Grande Minority Purchasing Council, Inc. RHS - Rural Housing Service RLF - Revolving Loan Fund RUS - Rural Utility Service SBA - Small Business Administration SBAP - Small Business Assistance Program SBI - Small Business Institute SBIC - Small Business Investment Company SBIR - Small Business Innovation Research Program SCORE - Service Corps of Retired Executives SHPO - State Historic Preservation Office

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SIC - State Investment Council SRO - Single Room Occupancy SSBIC - Specialized Small Business Investment Corporation STPF - Severance Tax Permanent Fund TAP - Taxpayer's Assistance Program TRADE - Tri-Area Association for Economic Development TVC - Technology Ventures Corporation TVI - Albuquerque Technical Vocational Institute VA - Department of Veterans Affairs VC - Venture Capital WATS - Wide-Area Telephone Service WBE - Women-Owned Business Enterprise WESST - Women's Economic Self-Sufficiency Team WNET - Women's Network for Entrepreneurial Training

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DEVELOPMENT FINANCE GLOSSARY Affordable Housing Safe and decent housing that can be owned or rented by low- to moderate-income individuals. Affordable housing projects are generally sponsored by a nonprofit organization singly or jointly, with public or private interests and require some form of public financial support, such as tax incentives or rent supplements. Affordable housing includes the purchase, new construction, or purchase/rehabilitation of single- and multi-family units. Business Incubator A facility that provides below-market rent, shared administrative and support services, and technical assistance for new, small businesses. Technical aid may include business and financial planning, management training and development, product development, market research and planning, and related services. Incubator sponsors can include private developers, nonprofit community development corporations, public agencies and universities. Certified Development Company Also known as a 504 Company. A nonprofit corporation that provides long-term (10- or 20-year), fixed rate, fixed asset financing for small and medium-sized businesses. The CDC must be approved by the Small Business Administration (SBA) and sponsored by the local government and/or business community. The CDC must operate in a defined geographic area; have a board of directors of at least 25 members of the community representing government, private business, private lending institutions and nonprofits; provide a full-time professional staff who can market the program, process and close loans and service its loan portfolio; have the ability to sustain its operations on a continuous basis; and have as its primary mission to "promote and assist the growth and development of business concerns in its operation area". Co-Housing Housing that combines private and communal forms of living where residents occupy individual, complete housing units and share additional kitchen, dining and recreational facilities with other residents. Ownership may be private and design may vary.

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Community Action Agency A publicly and/or privately funded agency that provides social services such as fuel assistance, day care and education classes to lower-income residents in surrounding communities. Community action agencies may also develop and manage affordable housing units. Community-Based Organization A nonprofit organization serving disadvantaged populations in rural or urban communities. Services provided may include health care assistance, education opportunities for targeted groups, employment and training services, and counseling for home ownership. Community-based organizations are funded from a variety of sources including state and local governments, foundations, private business, individuals and communities, or grass roots fund raising. Community Development Block Grant An annual allocation of federal funding administered by the U.S. Department of Housing and Urban Development (HUD) to promote neighborhood revitalization and local economic development. CDBG funds are made available to state and local governments, including entitlement communities (cities and urban counties over 50,000 in population); state governments (for small cities and communities under 50,000 in population); and for Indian tribes and insular areas. As a condition of its allocation, HUD requires that grantees provide at least 51 percent of the allocation to benefit low- to moderate-income residents, aid in the prevention of slums and blight, and address other urgent community development needs. (Also see Entitlement Community). Community Development Corporation--Bank Owned A for-profit or nonprofit corporation capitalized by one or more banks to make debt or equity investments in local community projects. A bank-owned CDC can perform a variety of activities that banks may be prohibited from doing in the normal course of business including buying, selling, developing and managing real property; making equity investments; forming limited partnerships and joint ventures; making high risk loans; and providing technical assistance and counseling services. A bank-owned CDC can be a subsidiary of one or more banks or bank holding companies, or be jointly owned by several entities such as banks, private investors, and other nonprofit and private organizations. Bank-owned CDC's require regulatory approval by the Federal Reserve System in the case of state-chartered banks and bank holding companies, or by the Office of the Comptroller of the Currency for national banks. CDC activities should promote

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public benefit and development of a community, or meet the needs of low- to moderate-income populations. Community Development Corporation--Community Based A nonprofit, community-based organization established to provide programs and services promoting affordable housing, business revitalization, and/or to provide technical assistance to residents or business owners. CDC's typically vary in size and scope, are tax-exempt and have boards of directors which may include local residents, public officials, lenders and other community leaders. Community Development Credit Union A nonprofit credit union chartered to serve member residents and small businesses in a low-income community. Unlike a private, company/employee-based credit union, a CDCU is tax exempt and may attract deposits and program funding from churches, foundations, individuals and private businesses. Federally chartered CDCU's are regulated by the National Credit Union Association; state-chartered CDCU's are regulated by the state. In general, CDCU's offer services not provided by mainstream financial institutions, such as small loans at below-market rates to individuals who might not otherwise qualify for bank loans. CDCU's usually rely on banks, foundations and other investors for deposits to support their work. Community Development Loan Fund A private, nonprofit financial intermediary that assembles investment capital and lends to community-based organizations and low-income projects. CDLF's assemble capital primarily from private, social investors in the form of loans, paying below-market interest rates on those funds and passing this subsidy to its borrowers. CDLF's can also provide borrowers with technical assistance to reduce the risk of losses. Since CDLF's are unregulated lenders, they have flexibility in their organizational structure, but may be subject to state laws and regulations. In most cases, there are incorporated and 501 (c)(3) nonprofits. Community Land Trust A private, community-sponsored nonprofit organization that owns land in perpetuity and leases it to home buyers at affordable prices. Under this arrangement, only the affordable housing units (improvements) are sold to eligible low- to moderate-income families. Leasing the land reduces the acquisition cost to families. Community land trusts control the terms of sale of all properties and improvements on the land to maintain the community interests, while allowing leaseholders to retain general ownership rights of their properties.

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Community Reinvestment Act A federal law enacted by Congress in 1977 requiring insured depository institutions to identify and address their local community credit needs. The law also authorizes financial institution's regulators to assess lender's progress in this regard and make the assessment public. CRA is a credit law in which institutions are encouraged to consider all segments of their community, including low- and moderate-income populations, when creating and marketing credit products. Comprehensive Housing Affordability Strategy A five-year planning document required of state and local governments as a condition for receiving federal funds for housing programs from HUD. A CHAS must describe a community's housing needs and conditions, and how low- and moderate-income populations will benefit. The plan must also describe the resources, policies and programs that exist or that will be created to meet these needs. A CHAS must be updated annually by the participating jurisdiction to remain eligible for funding. Congregate Housing Also known as Single Room Occupancy (SRO) Housing. A residence in which tenants have private rooms, but share common areas, such as kitchens, dining rooms, living rooms and bathrooms. Consumer Credit Protection Act A federal law enacted in 1968 and subsequently amended, comprised of the following consumer credit protection laws: Truth in Lending Act, Fair Credit Reporting Act, Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Electronic Funds Transfer Act, Fair Credit Billing Act and Consumer Leasing Act. Cooperative A multi-housing unit in which residents form a corporation for the purpose of collectively owning and managing the property. Membership in the cooperative gives residents the right to occupy the units and take part in the management and operation of the building. Residents own shares in the corporation proportional to their share of the mortgage, rather than owning individual units. If a resident leaves, the new resident purchases the previous resident's share(s) and assumes responsibility for that part of the mortgage. Department of Housing and Urban Development

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The principal federal agency responsible for programs designed to address the country's housing needs, fair housing opportunities, and improvement and development of communities. HUD was established by Congress in 1965 to provide mortgage insurance for the purchase and improvement of single-family and multifamily dwellings; a secondary market through the issuance and guarantee of mortgage-backed securities for investors in Government National Mortgage Association (Ginnie Mae); direct loans for construction or rehabilitation of housing projects for various targeted groups; housing subsidies for low- to moderate-income families; grants to cities, towns and states for community development activities; and enforcement of fair and equal housing opportunities. Department of Veterans Affairs A federal agency established in 1930 as an executive department by the Department of Veteran Affairs Act. The VA comprises three organizations that administer veterans programs including the Veterans Health Administration, the Veterans Benefits Administration and the National Cemetery System. The VA's home loan guarantee program is operated by the Benefits Administration. Entitlement Community A city or urban county with a population of at least 50,000 that can apply for and receive community development block grant (CDBG) funds directly from the federal government. Communities having less than 50,000 people are non-entitlement areas and can only receive CDBG funding through the state. Equal Credit Opportunity Act A fair credit lending law enacted by Congress in 1974 that prohibits discrimination in a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance or the exercise in good faith of rights granted by the Consumer Credit Protection Act. The scope of the Act covers all commercial and consumer credit transactions. Equity Grant A grant, generally provided by a government agency, reduces up-front acquisition costs of a housing or commercial development project. The grant may come in the form of a direct cash contribution, or as a reduction in sale price of publicly owned or held real property. Expiring Use Restrictions The contractual right of owners of low- and moderate-income rental housing to

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prepay their publicly assisted mortgage and convert their property to market-rate housing. Export-Import Bank Founded by Executive Order in 1934 as a District of Columbia banking corporation, the Export-Import Bank of the United States currently operates as an independent government agency under authority of the Export-Import Bank Act of 1945. Eximbank is responsible for assisting with the export financing of U.S. goods and services through a variety of programs that include loans, loan guarantees and insurance programs. Fair Housing Act Title VIII of the Civil Rights Act of 1968 which, among other requirements, prohibits lenders from discriminating in their housing-related lending activities against any person because of race, color, religion, national origin or sex. The Act covers transactions regarding the sale or rental of housing, including for the purpose of purchasing, constructing, improving, repairing or maintaining a dwelling. Persons or groups may file complaints with HUD. Farm Credit Administration An independent financial regulatory agency responsible for ensuring the safe and sound operation of Federal Credit System banks, associations, affiliated service organizations and other entities. The Farm Credit System protects the interests of the public and those who borrow from Farm Credit System institutions or invest in Farm Credit lending institutions, including System banks, the National Bank of Cooperatives, Federal Land Bank Associations and the Agricultural Credit Associations. Management of the Administration is vested with the Farm Credit Administration Board, whose three full-time members are appointed to terms of six years by the President with the advice and consent of the Senate. Farm Service Agency Farm Service Agency is an agency of the U.S. Department of Agriculture and incorporates programs from the Agricultural Stabilization and Conservation Service, the Federal Crop Insurance Corporation and the Farmers Home Administration. Missions of the FSA include stabilizing farm income, helping farmers conserve land and water resources, providing credit to new or disadvantaged farmers and ranchers, and helping farm operations recover from the effects of disaster.

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Federal Agricultural Mortgage Corporation A federally chartered, privately owned corporation created in 1987 by the Agricultural Credit Act. The purpose of Farmer Mac is to facilitate the development of a secondary market for agricultural real estate loans by authorizing the issuance of guaranteed mortgage-backed securities, and guaranteeing the payment of principal and interest to holders of those securities, and purchasing the guaranteed portion of Rural Development loans from lenders. Federal Home Loan Mortgage Corporation A congressionally chartered private agency that purchases conventional residential mortgage loans from originating financial institutions. As part of its mission of creating a national secondary market, Freddie Mac either maintains its loans in portfolio, or packages and sells them as securities. Freddie Mac also offers programs with flexible underwriting guidelines for lower-income home buyers. Freddie Mac was established in 1970 as part of the Federal Home Loan Bank system to serve thrift institutions, but became a private agency under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). Federal Housing Administration An agency created by the National Housing Act of 1934 to relieve unemployment, and stimulate private lending for housing construction and rehabilitation. FHA became part of HUD in 1965. Since its inception, FHA's primary activity has been to insure home mortgage loans originated by approved lenders, but not meeting conventional underwriting criteria. Federal Housing Finance Board An independent regulatory agency established in August 1989, by the Federal Home Loan Bank Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act. The Finance Board, which succeeds the Federal Home Loan Bank Board, supervises the Federal Home Loan Banks (FHL Banks) to ensure that they carry out their housing finance missions, that they remain adequately capitalized, that they are able to raise funds in the capital markets, and that they operate in a safe and sound manner. Federal National Mortgage Association A congressionally chartered, private agency established in 1937 to purchase and package conventional residential mortgages as securities, and sell them to investors. In 1987, Fannie Mae created its Office of Low- and Moderate-Income Housing to

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provide more flexible underwriting guidelines for low-income home buyers and nonprofit organizations. Government National Mortgage Association A wholly owned government corporation administered by HUD that guarantees FHA and VA mortgage-backed securities, and manages a portfolio of federally-owned mortgages. Ginnie Mae was created in 1968 through amendment of Title 11 of the National Housing Act to create a secondary market for Ginnie Mae securities. Ginnie Mae warrants the performance of the issuer and assures the investors holding these securities that they will receive their principal and interest. Ginnie Mae is a guarantor; it does not issue, sell or buy securities. HOME A program created under Title 11 of the Affordable Housing Act of 1990 and funded by HUD. HOME provides funding to states, metropolitan cities, urban counties and government consortia (contiguous units of government) to provide affordable housing for low- and moderate-income populations. To receive HOME funds, a jurisdiction must submit a Comprehensive Housing Affordability Strategy (CHAS) with is application for HUD approval. Home Investment Trust Fund A line-of-credit account established by HUD for each participating jurisdiction whose CHAS and program description are approved. The fund provides financing for all affordable housing projects that are based on the participating jurisdiction's approved housing strategy. Home Mortgage Disclosure Act A federal law enacted in 1975, and amended and extended permanently in 1988 that requires financial institutions to annually compile and disclose data about mortgage loan applications, and home improvement and home purchase loan extensions and denials. Reported information includes the race, sex and income of the applicant/borrower, as well as the disposition of the application. HMDA was enacted to provide the public with information to show whether lenders were serving the housing credit needs of their communities and to help public sector investments in areas to attract private investments. Homesteading Programs designed to enhance private acquisition and ownership of government-owned residential or commercial properties. Properties are generally acquired or

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repossessed by local government due to failure to pay taxes, and are resold at a later date to qualifying individuals or families at a nominal price, often one dollar. In some instances, the government may also provide low-interest rehabilitation loans to help new owners meet building and safety codes. Purchasers are required to continuously occupy the unit for a minimal time period, such as five years. Housing Partnership A nonprofit organization that brings together the interests, resources and financial support of public agencies, local businesses, banks and community organizations to increase the supply of affordable housing in a particular city or state. Housing partnerships generally work with local nonprofit community development corporations that initiate and design projects, obtain the financing and provide technical assistance. Inclusionary Zoning A zoning ordinance that allows a developer to provide affordable housing in a community. The developer's plan must identify the development's sources of funding, as well as specify the percentage of affordable units. In exchange for setting aside a certain percentage of affordable units, the developer can receive density zoning relief. Interest Subsidy Direct or indirect government assistance that reduces a borrowers interest cost on a loan. A subsidy can take one of three forms: a direct cash grant to a lending institution to write down the bank's interest rate on a business or housing loan; a government-sponsored, low-interest loan; or a below-market rate loan to a qualified borrower made possible by an advance or pass-through provision from a public entity. Projects qualifying for subsidies are deemed to provide some public benefit. Intermediary A nonprofit organization which provides training, technical assistance and financing to individuals and to other community-based nonprofits. Intermediaries are generally experienced, mature nonprofits with the ability to apply for and administer grant and loan funds to assist less experienced organizations. Funding sources for intermediaries include government, foundations and the private sector. Land Bank A public or quasi-public agency that acquires and assembles land in blighted areas for affordable housing and economic revitalization projects. Properties can be

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purchased from individual property owners by negotiation or through the power of eminent domain as granted by state urban renewal statutes. A land bank agency can serve as a government-designated developer or sell the property to private developers/businesses as part of a planned development. Limited Appreciation A restriction on the amount of appreciation that a property owner can realize at the point of sale. The restriction may be required by government to minimize real estate speculation and maintain the affordability of the property for future owners. Limited Equity Homeownership Multifamily residences owned and controlled by tenants in which resale values are restricted in order to maintain the long-term affordability of the units. These residences are often developed with public assistance in the form of relaxed zoning regulations or the discounted sales of publicly owned land in order to reduce development costs. Limited equity residences can take the form of a cooperative or a condominium. Linked Deposit A program in which government funds are deposited with a financial institution to encourage lending to specified businesses such as women-owned businesses or enterprises within a specified industry, i.e., small manufacturers or agriculture-related businesses. The linked deposit may carry a below-market rate that is passed on to the loan customer. Linked deposits may also have a longer maturity to match the loan maturity, thereby mitigating the lender's interest rate risk. Loan Consortium A collaboration among financial institutions in which capital is committed by the participating institutions to finance affordable housing and community development projects. Loan funds pledged to a consortium may be pooled in a separate, distinct fund or may be committed on a per loan basis. A consortium may be organized by the lenders as a for-profit corporation, or less formally by a loan participation agreement. A consortium may have a paid staff, contract with a third-party agent for services or use contributed staff time from participating lenders. Loan Guarantee A program by which a government agency guarantees a portion of a lender's loan to a business or home owner against default. Loan guarantee programs are available for lenders assisting small business, housing and agriculture borrowers. Loan

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guarantees generally are provided for projects that offer a public benefit, but are considered too risky to finance conventionally without the guarantee. Microenterprise A very small business usually operating from a home, storefront or office that employs fewer than five people and frequently only one person. Microenterprises can be full-time, part-time or seasonal ventures, and tend to be concentrated in the retail or service sectors that require modest capital for start-up. Microenterprises vary in size and sophistication, but generally lack sufficient capital and access to conventional credit sources because of their modest size, lack of collateral, insufficient equity and management experience. Microenterprise Loan A small, short-term loan that finances working capital, start-up or fixed asset purchases for very small businesses. These loans may range from $50 up to $25,000 with repayment terms of up to 36 months depending on the size, sophistication and needs of the business. Terms may be more flexible than conventional financing. Modular Housing Also known as Prefabricated Housing. Factory-built housing assembled on site. Construction costs are lower than for comparable site-fabricated homes. Mutual Housing Housing developed, owned and managed by a nonprofit partnership organization (Mutual Housing Association) for long-term affordability. Residents pay a one-time refundable membership fee and monthly payments to the Association to cover maintenance, management expenses and debt service. Resident payments are generally tied to family income. In turn, residents receive a lifetime right of occupancy and a voice in the management of the property through resident's councils and property management committees. Residents also have majority representation on the Association's board of directors, whose other members include community and business leaders, and public officials. Also, residents have the right to nominate a family or household member as a successor in the event of a move or death. Mutual Self-Help Refers to a group of families that cooperatively build housing for themselves. The houses are separately owned by each family, but the families build the homes together. This concept is featured as part of the RD Rural Housing Sites 523 and

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524 Programs. Neighborhood Housing Services A nation-wide network of neighborhood-based service organizations that are locally operated and funded. An NHS focuses on a specific community or communities to increase the supply of affordable housing and promote neighborhood stability. They provide below-market construction and rehabilitation financing, technical assistance and support for resident activism. Board members include local residents, business leaders, public officials and community representatives. All NHS's receive assistance from, and are monitored by, the Neighborhood Reinvestment Corporation. Neighborhood Housing Services of America A private, nonprofit, tax-exempt corporation that purchases non-bankable loans from local Neighborhood Housing Service's revolving loan funds. Option Land Mutual self-help groups are required to buy an option for a plot of land. This is a feature of the RD Rural Housing Sites 523 and 524 Programs. Public Housing Authority A local government quasi-agency which provides housing services to low- and very low-income residents of the community. New Mexico has both municipal and regional housing authorities. Rent Supplements Monthly, subsidized rent payments by a public housing authority to owners of private, single-family or multifamily housing that is made available to low- and very low-income tenants. The rent payments represent the difference between a share of the tenant's adjusted monthly income and the fair market rent. Supplements are made available through HUD's Section 8 certificates, vouchers or moderate rehabilitation programs. Revolving Loan Fund A loan structured so that repayments to the fund are used to make additional loans. Revolving loan funds may be initially capitalized from either a public funding source, i.e., CDBG or EDA funds, from private sector sources such as financial institutions through a consortium, or a combination of public and private sources. Revolving loan funds can be used for housing and commercial development projects,

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feature flexible terms and rates, and require matching dollars from the local community. A revolving fund is typically administered by a nonprofit or quasi-public agency. In a consortium arrangement, however, the lenders often hire a professional staff who administers the fund in conjunction with a loan committee. Right of First Refusal A right to purchase a property before it is sold to another buyer or goes on sale to the general public. Rights of first refusal are often used with expiring use restriction properties. Rural Development (Formerly Farmers Home Administration) Rural Development was created in 1994 when the rural economic and community development activities of the Farmers Home Administration, Rural Development Administration, Rural Electrification Administration and the Agricultural Cooperative Service were consolidated into this new agency within the Department of Agriculture. RD programs are administered through three rural development services: the Rural Business Service (RBS), the Rural Housing Service (RHS) and the Rural Utilities Service (RUS). Programs are designed to finance new and improved rural housing, develop community facilities, and maintain and create rural employment opportunities. Programs include loan guarantees, direct loans, grants and technical assistance. Small Business Administration Certified Lenders Program A SBA-sponsored program in which higher volume SBA guaranteed lenders can get expedited review of loan guarantee applications. Under the program, the SBA will process loan guarantee applications submitted by certified lenders in approximately three days. Eligible lenders must be experienced users of the SBA loan guarantee programs, and must have demonstrated both promptness and thoroughness in SBA loan origination and servicing. Small Business Administration Preferred Lenders Program A program sponsored by the SBA that allows experienced SBA lenders to originate, service, collect and commit SBA loan guarantees without prior SBA approval. Guarantees are limited to 80 percent for eligible loans. Participating lenders can also liquidate the loan without the SBA's prior approval in some cases. The program reduces the processing time on credit applications and maximizes the resources of the SBA's best lenders.

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Severance Tax Permanent Fund Severance taxes collected on certain natural resources extracted from all lands within New Mexico. Small Business Administration A federal agency created in 1953 by the Small Business Act to provide financial and management assistance to small business concerns and entrepreneurs. The majority of loan assistance programs are in the form of partial guarantees on loans made by private lenders. In addition, the SBA offers special loan programs for women, the handicapped, veterans and microenterprises. Small Business Development Center A network of facilities established by the SBA that provides technical assistance to small business owners. SBDC's are generally located in academic institutions and are structured as a joint venture arrangement between the institution, state or local government and the SBA. SBDC's make special efforts to assist groups such as women, the handicapped and veterans. Specialized Small Business Investment Corporation Formerly Minority Enterprise Small Business Investment Corporation (MESBIC). An SBIC venture capital firm licensed and regulated by the SBA to assist small firms owned and operated by socially or economically disadvantaged persons. The SBIC's can provide both debt and equity financing to small businesses participating in the program. The SBA guarantees the debt portion of SBIC investments to allow the SBIC's to leverage private capital. Subordinated Mortgage A mortgage that has a junior lien position on pledged collateral in relation to more senior debt. Subordinated mortgages hay have reduced interest and/or more flexible repayment terms in order to minimize the debt service of the borrower and reduce the primary lender's risk. Subordinated mortgages are typically provided through government programs to help finance both housing and business development projects. Housing programs primarily target lower-income households. Business programs may require a job creation/retention criterion for the funds provided to a project. Sweat Equity Labor performed by a property owner free of charge that increases the value of the

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property and is treated as equity when the property is financed. Sweat equity is generally associated with building construction or renovation where the property owner may perform carpentry, electrical or painting work that increases the property's value. Sweat equity also reduces the owner's out-of-pocket cash needed in completing the project. Syndicated Cooperative Also known as a Leasehold Cooperative. Cooperative living where residents share property ownership with outside investors. This method of cooperative living is most prevalent in high-cost housing areas. Investors are able to take advantage of federal tax credits while reducing costs for the cooperative's members. In return, residents share control over the property and may commit to buying out the investor's shares after a certain period of time. A syndicated (or leasehold) cooperative also refers to a cooperative that does not actually own the property, but instead signs a long-term lease with the owner, usually an investor partnership. Tax Abatement A temporary suspension of increased property tax payments on new improvements to private redevelopment. The tax may be abated up to 100% on improvements for a specified time and is offered as a redevelopment tool in designated blighted areas such as urban renewal zones or enterprise zones. Improvements eligible for tax abatements include new construction, as well as rehabilitation or renovation. Generally, only local or county taxing authorities can offer tax abatements. Tax Credit Credit offered by government to encourage affordable housing, business expansion, and job creation and retention. Tax credits come in four major forms: investment tax credits for business; job creation/retention and training incentives for hiring disadvantaged persons; historic preservation tax credits for rehabilitating historically designated structures; and low-income housing tax credits. In addition to the tax advantages to project investors, tax credits may also be sold to other investors to raise up-front equity when project ownership resides with a nonprofit corporation. Transitional Housing Temporary housing for families or individuals who have not yet found permanent housing and who require more stability than an emergency shelter. Residents usually stay for several months until their circumstances stabilize.

COURSE WORKBOOK


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DEVELOPMENT FINANCE A PRIMER ON THE TECHNIQUE AND THE ISSUES

The term development finance, as used in this course, refers to the process of financing projects which could not be undertaken without some kind of financial assistance, usually in the form of government enhancements. That is, entrepreneurs would not find the projects sufficiently attractive and/or lenders would not deem the projects creditworthy without the use of enhancements. Of special interest are projects involving small business, affordable housing and community development. The goals of this course are as follows:

(1) Simplify the learning process for using government enhancements to encourage lending and investment for the benefit of small businesses, lower income individuals and neighborhoods. These enhancements include: tax abatements, tax credits, interest rate subsidies, second mortgages, equity grants, rent supplements, loan guarantees, maturity-linked deposits and technical assistance.

(2) Demonstrate gap financing. Show how the cash flows of a project, when compared with a lenders credit criteria, may create gaps in project funding. Further, demonstrate how those gaps may be filled with the above mentioned enhancements.

(3) Explore public policy and other issues associated with gap financing. Show how changes in tax policy, government enhancement programs, lender credit criteria and interest rates affect the viability of individual projects. The course is designed for lenders, government enhancement administrators, community development specialists, banking regulators and policy makers, among others. Because it provides perspective on the development finance process, it should be of interest to novices as well as those with experience in development finance. It offers an opportunity for hands-on experience through the analysis of case studies.

PROGRAMREFERENCE GUIDE


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PROGRAM REFERENCE GUIDE In this guide, programs are organized according to the primary category into which they fall. The categories are:

Tab 1. Tax Credits, Exemptions, and Deductions Tab 2. Rent Supplements Tab 3. Interest Rate Subsidies Tab 4. Equity Grants Tab 5. Loan Guarantees Tab 6. Subordinated Mortgages Tab 7. Technical Assistance Tab 8. Maturity Linked Funding Tab 9. Community Assistance Tab 10. Additional Programs

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PROGRAM INDEX 1. Tax Credits, Exemptions, and Deductions .......................................................1

Advanced Energy Tax Credit 2 Affordable Housing Tax Credit 3 Aircraft Maintenance or Remodeling Tax Deduction 4 Aircraft Manufacturing Tax Deduction 5 Alternative Energy Product Manufacturers Tax Credit 6 Angel Investment Tax Credit 7 Biodiesel Blending Facility Tax Credit 9 Biomass-Related Equipment Tax Deduction 10 Blended Biodiesel Fuel Tax Credit 11 Business Facility Rehabilitation Tax Credit 12 Child Care Corporate Tax Credit 13 Compensating Tax Exemption 14 Cultural Property Preservation Tax Credit 15 Film Production Tax Credit 16 Health Related Property Tax Exemptions for Projects Financed by an IRB, Pollution Control Bond, or an Economic Development Bond 17 High Wage Jobs Tax Credit 18 Historic Preservation Tax Credit Program 19 Hospital Funding Mill Levy and Gross Receipts Tax 21 Indian Intergovernmental Tax Credit 22 Investment Credit Act 23 Jet Fuel Gross Receipts Tax Deduction 25 Job Mentorship Tax Credit 26 Low-Income Housing Tax Credit Program 27 MFA Housing Tax Credits 28 New Markets Tax Credit Program 29 New Mexico Historic Preservation Tax Credit 30 Property Tax Exemption 31 Renewable Energy Production Tax Credit 32 Research and Development Small Business Tax Credit 33 Rural Jobs Tax Credit 34 Solar Market Development Tax Credit 35 Technology Jobs Tax Credit – Parts I & II 36

2. Rent Supplements ...............................................................................................1 HUD Housing Choice Voucher Programs 2 HUD Housing Choice Voucher Family Self-Sufficency Program 7

3. Interest Rate Subsidies .......................................................................................1 Affordable Housing Program 2 Community Investment Program 3 MFA Access Loans 4 MFA Home Equity and Required Occupation Loan 5

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MFA HOME/Rental Gap Financing 6 MFA HOME/Single Family Development Gap Financing 7 MFA Mortgage Booster Program 8 MFA’s Mortgage $aver, Mortgage $aver Plus, and Mortgage $aver Zero 9 MFA Primero Investment Fund 11

4. Equity Grants ......................................................................................................1 Administration for Native Americans (ANA) Grant 2 Airport Improvement Program (AIP) 3 Eagle Staff Fund 4 Fannie Mae Programs 5 Freddie Mac Programs 6 EDA District, Planning Program 7 EDA Public Works and Economic Development Program 8 Federal Home Loan Bank Economic Development Program Plus (EDPPLUS) 9 FSA Farm Labor Housing Loan/Grant 10 HUD Community Development Block Grant Program 11 New Mexico Job Training Incentive Program (JTIP) 12 RD Housing Preservation Grant Program 14 RD Renewable Energy Projects 15 RD Rural Business Enterprise Grants Program (RBEG) 16 RD Rural Business Opportunity Grants Program (RBOG) 17 RD Rural Housing Repair and Rehabilitation Loan and Grant Programs 18 SBA Small Business Innovation Research Program 19

5. Loan Guarantees .................................................................................................1 BIA Indian Loan Guarantee Fund 2 Export-Import Bank (Eximbank) 3 FHA Insured Mortgage Program, Section 203(b) 4 FHA Title I Property Improvement and Manufactured Home Loan 5 FSA Farmer Programs 6 MFA 542(c), FHA-Insured Multifamily Loan Program 7 MFA BUILD IT! Loan Guarantee Program 8 Navajo Business and Industrial Development Fund 9 RD Business and Industry Guaranteed Loan Program (B&I) 10 RD Community Programs Guaranteed Loan Program 11 RD Guaranteed Rural Housing Program 12 RD Guaranteed Rural Rental Housing Program – Section 538 13 RD Renewable Energy Programs 14 SBA CAPLines 15 SBA Defense Loan and Technical Assistance Program (Delta) 17 SBA Export Working Capital Program 18 SBA International Trade Loan Program (IT) 19 SBA Loan Guarantee Program 20 SBA Pollution Control Loan Program 21 SBA Qualified Employee Trusts Loan Program 22

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VA-Guaranteed Home Loan Program 23 6. Subordinated Mortgages ....................................................................................1

EDA Economic Adjustment Assistance (Title IX) 2 SBA 504 Loan Program 3

7. Technical Assistance ...........................................................................................1 ACCION New Mexico 2 First Nations Oweesta Corporation 3 International Trade (State) 4 International Trade Administration (Federal) 5 National Economic Development Associates, Inc. (NEDA) 6 New Mexico Community Foundation 7 New Mexico Manufacturing Extension Partnership (MEP) 8 New Mexico Small Business Assistance Program (SBAP) 9 New Mexico Small Business Development Centers (NMSBDC) 10 New Mexico Technet 11 New Mexico Workforce Connection 12 RD Cooperative Development Assistance Program 13 RD Self-Help Technical Assistance Grant Program - Section 523 14 New Mexico Small Business Assistance Program (NMSBA) 15 Santa Fe Community Loan Fund 16 SBA Service Corps of Retired Executives (SCORE) 17 Space Alliance Technology Outreach Program 18 Technology Transfer 19 UNM Bureau of Business and Economic Research (BBER), University of New Mexico 20 Utility Companies 21 Wal-Mart Stores, Inc. Minority and Women-Owned Business Vendor Program 22 Women’s Economic Self-Sufficiency Team (WESST) 23 Workforce Training Center 24

8. Maturity Linked Funding ..................................................................................1 Farmer Mac Programs 2 Ginnie Mae Programs 3 New Mexico Purchase of SBA/RD/BIA Guarantee Obligations 4 New Mexico Real Property-Related Business Loan Participations 5

9. Community Assistance .......................................................................................1 Aviation Funding Program 2 Business Improvement District 3 Certified Communities Initiative (CCI) 4 Community Adjustment and Investment Program 6 Community Development Incentive Act 7 Community Development Programs 8 Regional Representatives 9 Efficient Use of Energy Act 10 Environment Department Programs 11 Industrial Revenue Bonds (IRBs) 12

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Ten Basic Steps in the New Mexico “Taxable” IRB Process 13 Local Economic Development Act (LEDA) 14 Local Options Gross Receipts Tax (LOGRT) 15 MainStreet Program 16 New Mexico Community Development Revolving Loan Fund 17 New Mexico Finance Authority (NMFA) 18

10. Additional Programs ........................................................................................1 Angel Investments 2 EDA Revolving Loan Fund 3 Employee Stock Ownership Plan (ESOP) 4 Equipment Leasing 5 Factoring 6 Flywheel Ventures Investments 7 FSA Indian Tribal Loan for Purchase of Land 8 FSA Limited Resource Farm Loan Program 9 HUD HOME Program 10 Loan Fund 11 Mesa Capital Ventures 12 New Mexico Community Capital 13 New Mexico Private Equity Investment Program 14 Office of Business Advocacy 15 Production Credit Association (PCA) 16 Regional Revolving Loan Fund 17 RD Intermediary Re-lending Program (IRP) 18 RD Multi-Family Program 19 RD Rural Economic Development Loan Program 20 RD Rural Housing Insured Loan Program - Section 502 21 RD Rural Housing Site Loan Program - Sections 523 & 524 22 SBA Section 8(a) Program 23 SBA Small Business Investment Company (SBIC) 24 Technology Ventures Corporation (TVC) 25 Tri-County Regional Revolving Loan Fund 26 Venture Capital 27 Worker Cooperative 28

1: Tax CrediTs, exempTions, and deduCTions


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Tax Credits, Exemptions, and Deductions

DESCRIPTION: Tax credits allow the holder to apply credit against taxes owed. (i.e. sales taxes, income taxes,

property taxes and use taxes). o Some tax credits (i.e. low-income housing tax credits) can be sold to others to raise equity.

Tax exemptions eliminate a tax payer’s obligation to pay taxes for a certain amount. Tax deductions reduce the amount of reported taxable income by which tax percentages are figured

against, and in this way, reduces the amount of tax paid is reduced. FUNCTION: The result of any of these tax incentives is an increase cash flow attributable to the project. These incentives are frequently used to raise equity in real estate development projects because they

produce a stable source of project-related revenue. Also, the incentives may attract equity owners who are more interested in the credits, exemptions, and

deductions than in the cash flow generated by the project. QUALIFICATION AND USE CRITERIA: Projects receiving these special tax credits, exemptions, and deductions must create or retain jobs,

stimulate investment in eligible real property, improvements, machinery or equipment; preserve historic buildings, create low-income housing, or provide other designated public benefits.

PROGRAM STRUCTURE: The incentives are rationed by rules and/or negotiation, depending upon the crediting authority. Such incentives are popular in designated improvement areas such as enterprise zones where they are

often used in conjunction with other enhancements.

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PROGRAM: Advanced Energy Tax Credit AGENCY: Taxation and Revenue Department DESCRIPTION: The Advanced Energy Tax Credit provides a 6% credit against gross receipts tax, compensating tax, withholding tax, personal income tax or corporate income tax liability for the generation of electricity. ELIGIBILITY: A taxpayer that holds an interest in a qualified electric generating facility may qualify to claim the advanced energy tax credit. QUALIFICATIONS/CRITERIA: If the credit amount exceeds the taxpayer’s liability, the excess can be carried forward for up to 10

years. The amount of the credit is 6% of expenditures for the development and construction of a qualified

new solar thermal electric generating facility, a geothermal electric generating facility or a solar photovoltaic electric generating facility that may include an associated or renewable energy storage facility or recycled energy project or 6% of expenditures for the development and construction of a qualified new or re-powered coal-based electric generating unit and an associated coal gasification facility.

Qualified facilities must begin construction no later than December 31, 2015. The aggregate amount of all Advanced Energy Tax Credits claimed with respect to a qualified facility

may not exceed $60,000,000. Effective July 1, 2010, and Advanced Energy Deduction from gross receipts tax if offered for receipts

from selling tangible personal property or services that are eligible generation plant costs to a person hold an interest in a qualified generating facility.

Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or call the office of the Secretary at (505) 827-0951.

See 7-9G-2 NMSA Laws 2009.

http://www.state.nm.us/tax/home.htm

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PROGRAM: Affordable Housing Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Affordable Housing Tax Credit is offered in hopes of making affordable housing more available in New Mexico. ELIGIBILITY: Investors in affordable housing projects may apply for this tax credit. QUALIFICATIONS/CRITERIA: The New Mexico Finance Authority (MFA) issues vouchers to investors. Vouchers may be applied for credit against gross receipts, compensating, withholding, personal

income, corporate income, E911 and TRS tax liabilities. Unused credits can be carried forward for up to five years, and may be sold or transferred. Vouchers are good for up to 50% of the investment. Affordable housing development includes land acquisition, construction, building acquisition,

remodeling, improvement, rehabilitation, conversion or weatherization for single or multi-family residences approved by MFA.

See 7-9I-1 through 7.91-6 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

find paperwork and applications at http://www.state.nm.us/tax/BizPge.htm. Call the office of the Secretary at (505) 827-0951.


http://www.state.nm.us/tax/BizPge.htm

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PROGRAM: Aircraft Maintenance or Remodeling Tax Deduction

AGENCY: Taxation and Revenue Department DESCRIPTION: The Aircraft Maintenance or Remodeling Tax Deduction provides tax relief for maintaining, refurbishing, remodeling or otherwise modifying a commercial or military carrier (aircraft) over 10,000 pounds gross landing weight. ELIGIBLE USES: Deduction for all receipts from the sale of aircraft. QUALIFICATIONS/CRITERIA: Maximum Program Benefits: The gross receipts tax rate is approximately 7%. See 7-9-62.1 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Aircraft Manufacturing Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Aircraft Manufacturing Tax Credit allows receipts of an aircraft manufacturer from selling aircraft may be deducted from gross receipts. Any deduction allowed under Section 7-9-71 NMSA 1978 must be taken before the deduction allowed by the subsection is computed. QUALIFICATIONS/CRITERIA: See 7-9-62 B NMSA for additional information. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

call the office of the Secretary at (505) 827-0951.


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PROGRAM: Alternative Energy Product Manufacturers Tax Credit

AGENCY: Taxation and Revenue Department

DESCRIPTION: The Alternative Energy Product Manufacturers Tax Credit provides up to a 5% credit of qualified expenditures for manufacturing equipment used in a manufacturing operation. The credit may be applied against gross receipts tax, compensating tax, withholding tax, E911 and TRS tax liabilities.

ELIGIBILITY: Manufacturers of certain alternative energy products may receive the tax credit. Alternative energy product means an alternative energy vehicle, fuel cell system, renewable energy system, or any component of an alternative energy vehicle, fuel cell system or renewable energy system, or components for integrated gasification combined cycle coal facilities and equipment related to the sequestration of carbon from integrated gasification combined cycle plants. QUALIFICATIONS/CRITERIA: If the credit amount exceeds the taxpayer’s liability, the excess can be carried forward for up to five

years. To be eligible to claim a credit, the taxpayer shall employ at least one new full-time employee for

every $500,000 of expenditures up to $30 million, and at least one new full-time employee for every $1 million of expenditures over $30 million.


See 7-9J-1 through 7-9J-8 NMSA.


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PROGRAM: Angel Investment Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Angel Investment Tax Credit provides a 25% credit on the qualifying investment in a high-technology or manufacturing business. The maximum investment for which a credit will be allowed for a business is $100,000. The maximum credit will total $25,000 annually per investment. The angel investment credit may only be deducted from the taxpayer’s personal income tax liability. ELIGIBILITY: Accredited investor means a person who is an accredited investor within the meaning of Rule 501 issued by the federal Securities and Exchange Commission pursuant to the federal Securities Act of 1933, as amended. Qualified investment means a cash investment in a qualified business for equity. Qualified business means a business that: (a) maintains its principal place of business in New Mexico; (b) engages in high-technology research or manufacturing activities in New Mexico; (c) is not primarily engaged in or is not primarily organized as any of the following types of businesses: credit or finance services -- including banks, savings and loan associations, credit unions, small local companies or title loan companies; financial brokering or investment; professional services -- including accounting, legal services, engineering and any other services the practice of which requires a license; insurance; real estate; construction or construction contracting; consulting or brokering; mining; wholesale or retail trade; providing utility service -- including water, sewerage, electricity, natural gas, propane or butane; publishing -- including publishing newspapers or other periodicals; broadcasting; or providing internet operating services; (d) has not issued securities registered pursuant to Section 6 of the federal Securities Act of 1933, as amended; has not issued securities traded on a national securities exchange; is not subject to reporting requirements of the federal Securities Exchange Act of 1934, as amended; and is not registered pursuant to the federal Investment Company Act of 1940, as amended, at the time of the investment; (e) has 100 or fewer employees calculated on a full-time-equivalent basis at the time of the investment; and (f) has not had gross revenues in excess of $5,000,000 in any fiscal year ending on or before the date of the investment. High-technology research means research: (a) that is undertaken for the purpose of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the qualified business; and (b) substantially all of the activities of which constitute elements of a process or experimentation related to a new or improved function, performance, reliability or quality. Manufacturing means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include: (a) construction; (b) farming; (c) processing natural resources, including hydrocarbons; or (d) preparing means for immediate consumption, on- or off-premises. QUALIFICATIONS/CRITERIA: To qualify a taxpayer must apply for a certificate of eligibility for the Angel Investment Credit to the

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Economic Development Department (EDD). To claim the credit, submit a completed Form RPD-41320, Angel Investment Credit Claim Form, and

a copy of the certificate of eligibility to the Taxation and Revenue Department. Accredited investors are allowed credits for two qualifying investments annually, provided that each

investment is in a different qualified business. Angel Investment Credits may be carried forward for up to three years. For assistance obtaining the certificate of eligibility for the Angel Investment Credit, contact Kathy

McCormick at the Economic Development Department at (505) 670-6320. Or, Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm

or call the office of the Secretary at (505) 827-0951. See 7-2-18.17 NMSA 1978.


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PROGRAM: Biodiesel Blending Facility Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Biodiesel Blending Facility Tax Credit provides a credit equal to 30% of the cost of purchasing and installing biodiesel blending equipment. ELIGIBILITY: A taxpayer who is a rack operator as defined in the Special Fuels Supplier Tax Act, who installs biodiesel blending equipment owned by the rack operator for the purpose of establishing or expanding a facility to produce blended biodiesel fuels is eligible to claim a gross receipts tax and compensating tax credit. QUALIFICATIONS/CRITERIA: Excess credit may be carried forward for up to four years from the date of the certificate of eligibility

issued by the Energy, Minerals, and Natural Resources Department. The credit cannot exceed $50,000 for equipment installed at one facility. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

call the office of the Secretary at (505) 827-0951. See 7-9-79.2 NMSA.


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PROGRAM: Biomass-Related Equipment Tax Deduction

AGENCY: Taxation and Revenue Department DESCRIPTION: To encourage a diversification of fuel types, and the use of renewable fuels, the state of New Mexico offers a tax deduction for the materials listed in 7-9-98 NMSA. ELIGIBILITY: The value of a biomass boiler, gasifier, furnace, turbine-generator, storage facility, feedstock processing or drying equipment, feedstock trailer or interconnection transformer may be deducted in computing the compensating tax due. QUALIFICATIONS/CRITERIA: Biomass products are products created from plant or crop based resources such as agricultural crops

and crop residues, forestry pastures and rangelands that are normally made from petroleum. Biofuels are biomass converted to liquid or gaseous fuels such as ethanol, methanol, methane and

hydrogen. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

call the office of the Secretary at (505) 827-0951. See 7-9-98 NMSA or HB 995 2005.


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PROGRAM: Blended Biodiesel Fuel Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Blended Biodiesel Fuel Tax Credit provides a credit against income tax due on a return for each gallon of blended biodiesel fuel on which a special use excise tax was paid in the taxable year or would have been paid but for certain deductions. ELIGIBILITY: A taxpayer who is required to pay the special fuel excise tax and who files a New Mexico personal or corporate income tax return may qualify. The taxpayer must be a registered supplier who files form RPD-41306, Combined Fuel Tax Report, reporting qualifying biodiesel fuel receipts QUALIFICATIONS/CRITERIA: Unused blended biodiesel fuel tax credit may be carried forward for five years from the date

eligibility was granted. For purposes of this credit, biodiesel means renewable, biodegradable, monoalkyl ester combustible

liquid fuel that is derived from agricultural plant oils or animal fats, and meets the American Society for testing and materials D6751 standard specification for biodiesel B100 blend stock for distillate fuels.

Blended biodiesel fuel eligible for this tax credit is fuel containing at least 2% biodiesel. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

call the office of the Secretary at (505) 827-0951. See 7-2-18.21 NMSA.


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PROGRAM: Business Facility Rehabilitation Tax Credit

AGENCY: Taxation and Revenue Department ELIGIBILITY: A corporation or individual who restores, renovates or rehabilitates a qualified business facility in an enterprise zone may receive credit on income tax owed to New Mexico. QUALIFICATION CRITERIA/COMMENTS: The credit may be carried over for four consecutive years. The credit equals 50% of the project cost with a cap of $50,000 for each project. A qualified facility is a building vacant for at least 24 months and intended to be put into use by a

person in manufacturing, distribution or service industries. An enterprise zone is a distressed area identified as such by a New Mexico county, municipality or

Indian reservation, by a combination of any two, or by all three. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

find paperwork and applications at http://www.state.nm.us/tax/BizPge.htm. Call the office of the Secretary at (505) 827-0951. See 7-2A-15 NMSA.



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PROGRAM: Child Care Corporate Tax Credit

AGENCY: Taxation and Revenue Department

DESCRIPTION: A tax credit is available on a percentage of eligible expenses for child care services incurred and paid by the taxpayer in the taxable year for dependent children of their employees. The credit may be claimed against corporate income tax. ELIGIBLE USES: A child care facility used primarily by the dependent children of the taxpayer’s employees. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Offers a tax credit of up to 30% of eligible expenses, net of

reimbursements or $30,000 in any taxable year per year. QUALIFICATION CRITERIA/COMMENTS: Unused credits can be carried forward for three consecutive years; excesses of these limits can be

deducted from the next year’s limits for up to three years. Dependent children are under 12 years of age. Any receipts of a corporation from an employee for the use of the child care facility are considered a

reduction of the allowable expenses for computing the child care credit. The credit allowed may only be taken if the facility is operated under the authority of a license issued

pursuant to the Public Health Act and is operated without profit by the taxpayer. See 7-2A-14 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Compensating Tax Exemption AGENCY: Taxation and Revenue Department DESCRIPTION: Compensating tax is an excise tax imposed on the privilege of using property in New Mexico. When property is purchased outside New Mexico and brought into the state for use a compensating tax is due on the value of the property. PROGRAM LOAN/STRUCTURE: Maximum Program Benefits: Allows an exemption on the value of tangible personal property

purchases outside New Mexico and used by a governmental entity or a business using the property for projects financed using Industrial Revenue Bonds (IRBs).

Rate: The compensating tax rate is 5%. QUALIFICATION CRITERIA/COMMENTS: This exemption can only be taken by governmental entities or businesses using tangible personal

property for projects financed using IRBs. This exemption does not apply to the use of property that is incorporated into a metropolitan

redevelopment project or the use of construction material. See 7-9-14 NMSA 1978. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or



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PROGRAM: Cultural Property Preservation Tax Credit AGENCY: Taxation and Revenue Department

DESCRIPTION: To encourage the restoration, rehabilitation, and preservation of cultural properties, any taxpayer who files a corporate income tax return and who is the owner of a cultural property listed on the official New Mexico register of cultural properties, with its consent, may claim a credit under 7-2A-8.6 NMSA. AND Any taxpayer who files an individual New Mexico income tax return and who is not a dependent of another individual and who is the owner of a cultural property listed on the official New Mexico register of cultural properties, with his consent, may claim a credit under 7-2-18.2 NMSA. ELIGIBLE USES: A certified historic structure listed on the official New Mexico Register of Cultural Properties owned

or rented by any taxpayer who files a corporate or individual income tax return in New Mexico is eligible.

After January 1, 2009, if the property is also located in an arts and cultural district certified by the state or a municipality pursuant to the Arts and Cultural District Act, a maximum $50,000 credit is allowed on the same property.

PROGRAM/LOAN STRUCTURE: To claim the tax credit, the taxpayer must Submit a plan a specifications for restoration, rehabilitation or preservation to the committee and

receive approval from the committee prior to commencement. Receive certification from the committee that the first step was completed. Complete the project within 24 months from the date of approval. QUALIFICATION CRITERIA/COMMENTS: To place the property on the Register, contact the Historic Preservation Division of the Office of

Cultural Affairs. Rehabilitation work must be certified for compliance with the Secretary of Interior's standards before

work begins. Property owners apply to the New Mexico Taxation and Revenue Department for forms to claim the

credit. Offers a maximum tax credit of 50% of the cost of restoration, rehabilitation or preservation up to

$25,000. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Film Production Tax Credit AGENCY: Taxation and Revenue Department DESCRIPTION: An eligible film production company may apply for, and the Taxation and Revenue Department may allow, a tax credit of 25%. New changes will become effective July 1, 2011. ELIGIBILITY: Expenses including the direct production expenditures made in New Mexico that are directly

attributable to the production of a film or commercial audiovisual product that are subject to taxation by the state may be credited.

Postproduction expenditures made in the state that are directly attributable to the production of a commercial film or audiovisual product, for services performed in the state, and are otherwise subject to taxation by the state.

The additional 5% for productions before January 1, 2009 are not available with respect to expenditures attributable to a production for which the film production company receives a tax credit pursuant tot the federal New Markets Tax Credit Program.

The credit is also unavailable to production expenditures or post production expenditure for that which the film production company has delivered a nontaxable transaction certificate pursuant to section 7-9-86 NMSA 1978.

A 5% additional credit is available for expenditures are for the production of four or more months of a second or subsequent season of a television series; utilizes a permanent studio facility of not less than $55,000 square feet and that is part of a workforce training program, certified by the Film Division, with a state education institution; and do not qualify for the federal New Markets Tax Credit Program.

STRUCTURE: The company must submit information required by the Film Division of the New Mexico Economic

Development Department and conform with requirements and agree in writing: o To pay all obligations the company incurs in the state; o To publish a notice at least once a week for three consecutive weeks in local newspapers in

regions where filming has taken place to notify the public of the need to file creditor claims against the company by a specific date;

o That outstanding obligations are not waved should a creditor fail to file the specified date; and o To delay filing of a claim for the film production tax credit until the New Mexico Film Division

delivers written notification to the Taxation and Revenue Department that the film production company has fulfilled all requirements for the credit.

The company must adhere to the specifications of the Film Division and must include a certification of the amount of direct production expenditures or postproduction expenditure made in New Mexico.

QUALIFICATIONS/CRITERIA The Film Division shall determine the eligibility of the company and shall report this information to

the Taxation and Revenue Department in a manner and at times the Economic Development Department and the Taxation and Revenue Department shall agree upon.

Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm.


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PROGRAM: Health Related Property Tax Exemptions for Projects Financed by an IRB, Pollution Control Bond, or an Economic Development Bond

AGENCY: Taxation and Revenue Department DESCRIPTION: Property interests of a lessee in project property held under a lease from a county or municipality

under authority of an Industrial Revenue Bond (IRB), Pollution Control Revenue Bond Act, or the Statewide Economic Development Finance Act are exempt from property taxation for up to 30 years, as long as there is an outstanding bonded indebtedness under the terms of the revenue bonds issued for the acquisition of the project property.

Property interests of a person, other than a public utility, from the purchase of a project authorized by the Industrial Revenue Bond Act, the County Industrial Revenue Bond Act, the Pollution Control Revenue Bond Act or the Statewide Economic Development Finance Act are exempt from property taxation for up to 30 years, as long as there is an outstanding bonded indebtedness under the terms of the revenue bonds issued for the acquisition of the project property.

Property interests of a participating health facility acquired, leased, financed, or refinanced with the proceeds of bonds issued under the Hospital Equipment Loan Act are exempt from taxation for up to 30 years, as long as the facility remains liable for any amount under any lease, loan, or other agreement securing the bonds.

All health related equipment purchased, acquired, leased, financed, or refinanced with the proceeds of bonds issued under the Hospital Equipment Loan Act is exempt from property taxation for as long as the participating health facility remains liable for up to 30 years, as long as there is an outstanding bonded indebtedness under the terms of the revenue bonds issued for the acquisition of the project property.

ELIGIBILITY: Lessees, persons, health facilities, and equipment financed by an IRB, the Pollution Control Revenue

Bond Act, the Statewide Economic Development Finance Act, or the Hospital Equipment Loan Act are eligible for property tax exemptions.

STRUCTURE: The exemptions from property taxation are not cumulative, but the exemptions may be applied consecutively if subsequent exemptions relate to the financing of a new project or new health-related equipment. QUALIFICATIONS/CRITERIA: There is a 30 year limit on this exemption, and the party financed must continue to hold the debt

financed in the above described manners. See HB 811 2006. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: High Wage Jobs Tax Credit AGENCY: Taxation and Revenue Department

DESCRIPTION: The High-Wage Jobs Tax Credit provides a refundable tax credit to businesses for each high-wage job created. ELIGIBLE USES: The credit is equal to 10% of the salary and benefits of each qualifying economic-based job, up to

$12,000 per employee. May be claimed against gross receipts tax, compensating tax, or withholding tax for the year the job

was created and the following three years. In urban areas, qualifying jobs must pay at least $40,000 per year. In rural areas, qualifying jobs must pay at least $28,000 per year. QUALIFICATION CRITERIA/COMMENTS: The eligible employer has to apply to the Taxation and Revenue Department in the manner specified

by the Department. The credit may be deducted from the modified combined tax liability of a taxpayer. If the credit

exceeds the modified combined tax liability of the tax payer, the excess will be refunded. Urban areas are defined as a population greater than 40,000. The qualifying job must have been occupied for at least 48 weeks. See 7-9G-1 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Historic Preservation Tax Credit Program

AGENCY: U.S. Department of the Interior, National Park Service DESCRIPTION: Tax incentives are available where historic structures are certified as having received rehabilitation to preserve and enhance their historic character. ELIGIBLE USES: A certified historic structure listed in the National Register of Historic Places or located in a registered historic district. A registered district listed in the National Register of Historic Places or designated by state or local

statute. A certified rehabilitation of a certified historic structure. A depreciable building (i.e. used in trade or company, or held for the production of income) and not

an owner-occupied residence. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Offers a maximum tax credit of 20% of the substantial rehabilitation of

historic buildings for commercial, industrial and rental residential purposes, and a 10% credit for substantial rehabilitation for non-residential purposes for structures built before 1936.

The straight-line depreciation period of 27.5 years is for residential property and 31.5 years for non-residential property for the depreciable basis of the rehabilitated structure, less the amount of the tax credit claimed. Under rehabilitation costs and requirements, expenses must exceed the greater of the adjusted basis of the building or $5,000 within a 24-month period. Rehabilitation features must conform to the Secretary of the Interior's Standards for Rehabilitation.

Fees: The National Park Service (NPS) charges application fees for reviewing requests. Projects less than $20,000 are not assessed. For those over $20,000, there is a $250 fee for reviewing all applications, $500 for projects costing $20,000 to $99,999; $800 for those costing $100,000 to $499,999; $1,500 for those costing $500,000 to $999,999; and $2,500 for those costing $1 million or more.

Generally, each rehabilitation certification request on a certified historic structure is considered as a separate project for the purposes of computing the application fee.

QUALIFICATION CRITERIA/COMMENTS: Rehabilitation projects must meet the following Standards, as interpreted by the National Park Service, to qualify as “certified rehabilitations” eligible for the 20% rehabilitation tax credit: A property shall be used for its historic purpose or be placed in a new use that requires minimal

change to the defining characteristics of the building and its site and environment. The historic character of a property shall be retained and preserved. The removal of historic materials

or alteration of features and spaces that characterize a property shall be avoided. Each property shall be recognized as a physical record of its time, place, and use. Changes that create

a false sense of historical development, such as adding conjectural features or architectural elements from other buildings, shall not be undertaken.

Most properties change over time; those changes that have acquired historic significance in their own right shall be retained and preserved.

Distinctive features, finishes, and construction techniques or examples of craftsmanship that

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characterize a historic property shall be preserved. Deteriorated historic features shall be repaired rather than replaced. Where the severity of

deterioration requires replacement of a distinctive feature, the new feature shall match the old in design, color, texture, and other visual qualities and, where possible, materials. Replacement of missing features shall be substantiated by documentary, physical, or pictorial evidence.

Chemical or physical treatments, such as sandblasting, that cause damage to historic materials shall not be used. The surface cleaning of structures, if appropriate, shall be undertaken using the gentlest means possible.

Significant archeological resources affected by a project shall be protected and preserved. If such resources must be disturbed, mitigation measures shall be undertaken.

New additions, exterior alterations, or related new construction shall not destroy historic materials that characterize the property. The new work shall be differentiated from the old and shall be compatible with the massing, size, scale, and architectural features to protect the historic integrity of the property and its environment.

New additions and adjacent or related new construction shall be undertaken in such a manner that if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.

Work is to be completed before receiving certified rehabilitation status. Certification denials are appealed to the Department of the Interior. Visit National Parks Service homepage at http://www.cr.nps.gov/hps/TPS/tax/incentives/index.htm or

the Department of the Interior’s page at http://www.doi.gov/.

http://www.cr.nps.gov/hps/TPS/tax/incentives/index.htm

http://www.doi.gov/

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PROGRAM: Hospital Funding Mill Levy and Gross Receipts Tax

AGENCY: Taxation and Revenue Department DESCRIPTION: To finance Medicaid and indigent healthcare recipients, the governing body of any county may enact an ordinance imposing an excise tax of 1/16% for each purpose. ELIGIBILITY: Any county is eligible to pass the 1/16% increase to fund Medicaid, but only counties with a population of more than five hundred thousand may impose an additional 1/16% to support indigent patients. QUALIFICATIONS/CRITERIA: A majority of the members of the governing body of any county must vote to approve the increase for

Medicare funding. Only counties with more than 500,000 may authorize the increase for the funding of indigent patients. See HB 274 2006. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Indian Intergovernmental Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: A company engaged in growing, processing or manufacturing may receive a tax credit from taxes imposed by an Indian nation, Tribe or Pueblo located wholly or partly in New Mexico. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The tax credit is 50% or the lesser of: The aggregate amount of tax paid by a taxpayer. The amount of the taxpayer’s corporate income tax due for the reporting period from the new

business’s activity conducted on Indian land. QUALIFICATION CRITERIA/COMMENTS: The tax credit is limited to income from a new company established on tribal land after July 1, 1997. The tax credit is non-refundable and can be applied against the existing tax liabilities only; an excess

can be carried forward. The burden of showing entitlement to this credit lies with the taxpayer claiming it. For a taxpayer who qualifies and conducts business outside of Indian land: the corporate income tax

liability of the products of one-half of the taxpayer’s New Mexico corporate income tax liability before application of the credit provided by section 7-2A-16 multiplied by the payroll factor and one half of the taxpayer’s New Mexico corporate tax liability before application of the credit provided here, multiplied by the property factor.

See 7-2A-16 NMSA for specifications on these factors. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or



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PROGRAM: Investment Credit Act AGENCY: Taxation and Revenue Department

DESCRIPTION: It is the purpose of the Investment Credit Act [Chapter 7, Article 9A NMSA 1978] to provide a favorable tax climate for manufacturing businesses and to promote increased employment in New Mexico. The Investment Credit Act was introduced as a way to offset the compensating tax due on the importation of manufacturing equipment to promote expansion of manufacturing operations in New Mexico. The program has evolved to provide a more general incentive for manufacturers to locate in New Mexico and to hire New Mexicans. ELIGIBLE USES: Equipment is eligible if essential, used directly and exclusively in a manufacturing facility, and

depreciated for federal income tax purposes. Vehicles are specifically excluded. Equipment is valued at the adjusted basis established for federal income tax purposes at the time the

equipment is introduced. The creation of new, full time jobs is required to qualify for the credit:

o For investments up to $30 million - one full time job for every $500,000 increment of investment; and

o For investments over $30 million - one full time job for every $1 million increment of investment.

After June 30, 2011, for every $100,000 in value of qualified equipment claimed by a taxpayer in a taxable year, the taxpayer shall employ the equivalent of one full-time employee in addition to the number of full-time employees employed on the day one year prior to the day on which the taxpayer applies for credit.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The credit allows the manufacturer to offset the amount of

compensating tax paid on eligible equipment. The credit equals the amount of compensating tax actually paid, and may be applied against compensating tax, gross receipts tax or withholding tax due.

Rates: The compensating tax rate is 5.125%. QUALIFICATION CRITERIA/COMMENTS: Manufacturers only can qualify. Manufacturing means combining or processing components or

materials to increase their value for sale in the ordinary course of business. This specifically excludes construction, farming, power generation and processing natural resources, though includes geothermal.

There are two steps in claiming the credit: (1) Submit an application to the Taxation and Revenue Department on Form

INVCR-1. Once the application is received, the amount of credit will be established; and

(2) The credit is applied against the combined compensating, gross receipts (state only) and withholding taxes reportable in periods after approval.

The taxpayer has until the end of the year following the year in which the qualified equipment was introduced in New Mexico to claim the credit. If the full amount of the credit cannot be used in the first year, the credit may be carried forward to future years until the credit is fully utilized.

Equipment not previously used in New Mexico and not previously approved for a credit under the

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Investment Credit Act [Chapter 7, Article 9A NMSA 1978] that is owned by the taxpayer or owned by the United States or an agency or instrumentality thereof or the state or a political subdivision thereof and leased or subleased to the taxpayer, and any equipment that is placed into service on or after January 1, 1991, under the provisions of either the Industrial Revenue Bond Act [Chapter 3, Article 32 NMSA 1978] or the County Industrial Revenue Bond Act [Chapter 4, Article 59 NMSA 1978] and that otherwise meets the requirements of the Investment Credit Act is qualified equipment.

Tangible personal property which is not a machine, mechanism or tool, or a component or fitting thereof, is not "equipment" for the purpose of the Investment Credit Act [Chapter 7, Article 9A NMSA 1978]. Accordingly such items as furniture, shelving and supplies are not "equipment". Equipment that is neither essential to nor used in conjunction with the manufacturing plant will not qualify for the Investment Credit, even if that equipment is physically located in the plant. Nonqualifying equipment may include, but is not limited to: coffee makers, kitchen equipment used in an employee cafeteria and televisions or radios used in an employee lounge or in a reception area

See 7-9A-1 through 7-9A-11 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Jet Fuel Gross Receipts Tax Deduction

AGENCY: Taxation and Revenue Department DESCRIPTION: To encourage travel by turboprop or jet-type powered airlines, the 2006 Legislature has allowed for a deduction for fuel to power those types of airplanes. ELIGIBILITY: Any supplier of fuel prepared and sold for use in turboprop and jet-type engines. STRUCTURE: From July 1, 2003 to June 30, 2012, 55% of the receipts from the sale for fuel specially prepared and

sold for use in turboprop and jet-type engines, as determined by the Department, may be deducted from gross receipts and in computing the compensating tax due.

After June 30, 2012, 40% of the receipts from the sale of fuel as described above. See SB009 2006.



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PROGRAM: Job Mentorship Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: The Job Mentorship Tax Credit encourages New Mexico businesses to hire youth participating in career preparation education programs. ELIGIBILITY: A company that files a corporate income tax return. STRUCTURE: This tax credit provides for a tax credit of up to the lesser of 50% of total wages or $12,000 for as

many as 10 "youth[s] participating in career preparation education programs" for up to 320 hours (eight 40-hour work weeks).

This can be claimed for three consecutive years as long as no more than a total of $12,000 is claimed for credits.

Employers must prove the students hired are not replacing any full-time employees as well as submit documentation to the Department of Taxation and Revenue.

QUALIFICATIONS/CRITERIA: The Taxation and Revenue Department will issue Job Mentorship Tax Credit certificates upon request

to any accredited New Mexico secondary school that has a school-sanctioned career preparation education program.

The tax credit may only be deducted from the taxpayer’s corporate income tax liability for the taxable year. Any portion of the maximum credit that remains unused at the end of the taxpayer’s taxable year can be carried forward for three consecutive taxable years.

See 7-2A.17.1 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Low-Income Housing Tax Credit Program (LIHTC)

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The Low-Income Housing Tax Credit Program was created by the Tax Reform Act of 1986. The purpose of the program is to stimulate the development of low-income rental housing (new construction and rehabilitation) by providing tax credits to investors in limited partnerships. Generally, these partnerships provide the additional capital needed in leveraging other public and private sources to finance development projects. Low-Income Housing Tax Credits have encouraged these investments by providing investors credit for up to 10 years. ELIGIBLE USES: This program can be used for new construction and/or rehabilitation of rental units. Project sponsors are required to rent a minimum of 40% of the units to low-income tenants with

incomes no greater than 60% of area median income, or a minimum of 20% of the units to tenants with incomes no greater than 50% of the area median.

Rents to tenants may not exceed 30% of qualifying incomes. Income-targeting and maximum rent guidelines must be met for a minimum of 15 years. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The annual credit equals a fixed percentage of the project's total cost.

New construction or substantially rehabilitated projects generate credit up to 9% of the development expense, but is usually below; projects acquired and requiring less rehabilitation provide credit up to 4% of development expenses, but is usually below.

Fees: Administering agencies may assess fees to cover administrative expenses. QUALIFICATION CRITERIA/COMMENTS: Developers/sponsors may be profit-oriented or non-profit organizations. The MFA determines which individual projects are eligible to receive credits. The federal government budgets an annual allocation of tax credits to be apportioned among the states

based on population. For more information visit the website at http://housingnm.org/ or call (505) 843-6880. (800) 444-6880 (Toll free in New Mexico).

http://housingnm.org/

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PROGRAM: MFA Housing Tax Credits

AGENCY: Mortgage Finance Authority (MFA)

DESCRIPTION: The Housing Tax Credit Program (HTC) provides federal income tax credits to individuals or organizations that develop affordable housing through either new construction or acquisition and rehabilitation. The tax credits provide a dollar for dollar reduction in the developer's tax liability for a 10-year period. Tax credits can also be used by non-profit or public developers to attract investment to an affordable housing project by syndicating, or selling, the tax credit to investors.

ELIGIBILITY: In order to receive tax credits a developer must set-aside a number of units for occupancy by households below 60% of area median income. The rents charged to these households may not exceed 30% of the median income. These units must remain affordable for a minimum of 30 years. This program is a resource provided by the Internal Revenue Service. In addition to tax credits, the financing "gap" for certain HTC projects may be filled with a below market rate HOME loan. Tax credits and rental HOME loans are awarded annually through a competitive application process according to the state's Qualified Allocation Plan.

STRUCTURE: Section 42 of the IRS Code requires MFA to develop and implement a compliance monitoring program. That monitoring program is contained within MFA’s Housing Credit Compliance Manual. Sections of the manual include occupancy and tenant eligibility, establishing a project’s qualified basis, income verification, and rent restrictions and lease requirements, among others. The Housing Credit Compliance Manual is provided here for your reference.

QUALIFICATIONS/CRITERIA: Compliance forms include the 2006 Income and Rent Limits, Annual Compliance Report, Owners

Certification, Housing Credit Training, and the Compliance Manual. For links to pdf and MS Word compliance forms, visit

http://www.housingnm.org/AssetManagement/amCompliance.htm. Allocations forms include 2006 Qualified Allocation Plan, HOME TC guidelines, 2006 Design

Standards, Green Building Criteria, Credit Application Package, 2006 Income and Rent Limits, Carry Over Package, Final Allocation Package, HUD 4571.2 Special Needs Definition, and RD Definition Farm Labor Housing.

For links to pdf and MS Word allocation forms, visit http://www.housingnm.org/Developer/HTC_Allocations.htm.

For allocation questions, contact Jerusha Daniels: Housing Tax Credit Specialist, Direct Line: (505) 767-2251 or (800) 444-6880.

For compliance questions, contact Matt Archuleta: Program Specialist, (505) 767-2273. Visit the MFA’s homepage at http://www.housingnm.org/ or call (505) 843-6880

(800) 444-6880 (Toll free in New Mexico).

http://www.housingnm.org/AssetManagement/amCompliance.htm

http://www.housingnm.org/Developer/HTC_Allocations.htm

http://www.housingnm.org/

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PROGRAM: New Markets Tax Credit Program

AGENCY: New Mexico Finance Authority (NMFA) DESCRIPTION: The NMFA has the authority to form, operate, own, or co-own any number of qualified community development entities to participate in the federal New Markets Tax Credits Program. The program was established primarily to provide greater access to financing for new, expanding or relocating businesses in underserved areas across the state. STRUCTURE: The NMFA was awarded an allocation of $110 million in New Markets Tax Credits. Approximately $35 million in capital may be raised. Make qualified low-income community investments. See HB277 2006. Visit www.nmfa.net or call (505) 984-1454.

http://www.nmfa.net/

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PROGRAM: New Mexico Historic Preservation Tax Credit AGENCY: Department of Cultural Affairs, Historic Preservation Division ELIGIBILITY: The state income tax credit is available to owners of historic structures who accomplish qualified, rehabilitation on a structure or stabilization or protection of an archaeological site. Eligible applicants must own or lease a property that is listed on the State Register of Cultural Properties or is a contributing property to a historic district that is listed in the Register. (Contact the Historic Preservation Division in Santa Fe). Eligible uses include work that conforms to the Secretary of the Interior's Standards for Rehabilitation and program regulations NMAC 4.10.9. The CPRC must approve the work plan before any construction begins. Typical work items whose costs may be eligible for credit include new roofing or repairing roofing, eaves and fascia, repairing deteriorated woodwork, stabilizing foundation and structural elements, repairing windows, restoring interior and exterior finishes, and repairing or replacing utility services to conform to applicable code requirements. STRUCTURE: Each program project carries a maximum of $50,000, although the project costs may exceed this

amount. Maximum credit is 50% of eligible costs of the approved rehabilitation or $25,000 (50% of project

maximum) or 5 years of tax liability, whichever is least. The credit is applied against New Mexico income taxes owed in the year the project is completed and the balance may be carried forward for up to four additional years.

QUALIFICATIONS/CRITERIA: Property must be individually listed in, or contributing to a historic district listed in the State Register

of Cultural Properties. The property may be a personal residence, income-producing property (such as an apartment building or office), or an archaeological site.

The State Cultural Properties Review Committee (CPRC) must approve the proposed rehabilitation work prior to the beginning of the project. The work will conform to the guidelines in the regulation NMAC 4.10.9 (PDF format) as interpreted by the CPRC. All parts of the project must be described in Part one of the application, including those items wherein costs may not be eligible toward credit, e.g. a new addition to the structure.

The project term expires 24 months from the date of the Part one approval. New part for portions of uncompleted work from previous applications, as long as the project maximum has not been reached.

The completed project must be documented in Part two of the application and presented to the CPRC for certification. Project expenses must be fully documented and submitted the application. Applications available at http://www.nmhistoricpreservation.org/PROGRAMS/sitcappl.doc.

For more information, visit http://www.nmhistoricpreservation.org/PROGRAMS/creditsloans_taxcredits.html#top.

A full list of the state’s programs is available at http://www.nmhistoricpreservation.org/PROGRAMS/creditsloans.html.

For the state “Credit for preservation of cultural property; refund see 7-2-18.2 NMSA, Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or


http://www.nmhistoricpreservation.org/PROGRAMS/sitcappl.doc

http://www.nmhistoricpreservation.org/PROGRAMS/creditsloans_taxcredits.html#top

http://www.nmhistoricpreservation.org/PROGRAMS/creditsloans.html



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PROGRAM: Property Tax Exemption AGENCY: Taxation and Revenue Department ELIGIBILE USES: Real and tangible property is subject to taxation at the local level is eligible for the exemption. PROGRAM LOAN/STRUCTURE: Maximum Program Benefits: Land, buildings and equipment associated with an eligible project are

exempt from ad valorem tax, generally to promote economic development. Term: Up to 30 years; rate varies by community. QUALIFICATION CRITERIA/COMMENTS: There are a number of state laws which provide property tax abatements:

o Industrial Revenue Bond (IRB) projects See 7-36-3 NMSA: Provides up to 100% exemption of project property from taxes for the life of the related bond indebtedness;

o In New Mexico construction or rehabilitation of non-speculative office buildings, warehouses, manufacturing facilities, and service oriented facilities not primarily engaged in the sale of goods or commodities at retail are eligible;

o Pollution control projects See 7-36-3 NMSA: Provides 100% exemption of project property from taxes for the life of the related bond indebtedness. Public utilities are excluded. The purpose is land, air and water pollution exemption;

o Metropolitan redevelopment projects See 7-36-3.1 NMSA: Provides 100% exemption of redevelopment project property from taxes until the end of the 7th year following acquisition by a municipality. The purpose is to eliminate slum and blighted areas;

o Enterprise zone projects See 7-36-3.2 NMSA: Provides a 100% exemption of zone project property. The purpose is to revive economically depressed areas;

o Community Development Incentive Act, aka. IRB Lite See 3-64-1 et. seq. NMSA: Allows counties and municipalities to exempt up to 100% of the commercial personal property of a new business facility for a maximum of 20 years. The purpose is to give local governments a less expensive alternative to industrial revenue bonds;

o A “facility” means any factory, mill, plant, refinery, warehouse, dairy, feedlot, building or complex of buildings located within the state, including land on which the facility is located and all machinery, equipment and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility; and

o A “new business facility” means a facility that is employed by the taxpayer in the operation of a revenue-producing enterprise. The facility may not be a replacement business facility. The facility must be acquired or leased to the taxpayer on or after July 1, 2003.

While allowed by state law, use of abatements is at the discretion of each city or county government. See 4-59-1 et. seq. NMSA for IRB information. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Renewable Energy Production Tax Credit

AGENCY: Energy, Minerals, and Natural Resources Department DESCRIPTION: To encourage the growth of and investment in renewable sources of energy, the state of New Mexico allows a certain amount of credit for those eligible against their corporate income tax. ELIGIBILITY: A person is eligible for the Renewable Energy Production Tax Credit if he or she holds title to a qualified energy generator or leases property upon which a qualified energy generator operates from a county or municipality under authority of an Industrial Revenue Bond. STRUCTURE: The tax credit is equal to a penny per kilowatt-hour of the first 400,000 megawatt-hours of electricity

produced by the qualified energy generator. A taxpayer eligible for this credit will be eligible for 10 consecutive years beginning on the date the

qualified energy generator begins producing electricity. A person that holds title to a facility generating electricity from a qualified energy resource pursuant

to an IRB is eligible for certification for this credit. QUALIFICATIONS/CRITERIA: A qualified energy generator is a facility with at least 10 megawatts generating capacity located in the

state that produced electricity using a qualified energy resource and sells that electricity to an unrelated person.

A qualified energy resource is a resource that generates electrical energy by means of a fluidized bed technology or similar low-emissions technology or a zero emissions generation technology that has substantial long term production potential and that uses only solar light, solar heat, wind, or biomass.

This credit may be deducted from the taxpayer’s New Mexico corporate income tax liability for a taxable year. If the amount of the tax credit claimed exceeds the taxpayer’s corporate income tax liability, the excess may be carried forward for up to five consecutive taxable years.

See HB 950 2005 and 7-2A-19 NMSA. Visit the department’s homepage at http://www.emnrd.state.nm.us/EMNRD/MAIN/index.htm or call

(505) 476-3200.

http://www.emnrd.state.nm.us/EMNRD/MAIN/index.htm

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PROGRAM: Research and Development Small Business Tax Credit

AGENCY: Taxation and Revenue Department ELIGIBILITY: Any taxpayer that is a qualified research and development small business is eligible. The costs of a qualified research and development business are eligible for this tax credit. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Credit may be taken against gross receipts tax, compensating tax or

withholding tax for up to three years. QUALIFICATION CRITERIA/COMMENTS: Qualified research is defined as that undertaken for the purpose of discovering information that is

technological in nature and the application of which is intended to be useful in the development of new or improved business components, and in which substantially all activities constitute elements of a process of experimentation related to new or improved function, performance, reliability or quality, but not related to style, taste, cosmetic or seasonal factors.

Qualified research expenditure means an expenditure directly related to qualified research, but does not include any expenditure on research funded by any grant, contract or similar mechanism by another person or governmental entity, and does not include any expenditure on property that is owned by a municipality or county in connection with an industrial revenue bond project or expenditures for which the taxpayer has received any other applicable credit.

Qualified small business means a business that: o Employs no more than 25 employees in any prior calendar month; o Had total revenues of no more than $5 million in any prior fiscal year; o Did not in any prior calendar month have more than 50% of its voting securities or other equity

interest with the right to designate or elect the board of directors or other governing body of the qualified business owned directly or indirectly by another business; and

o Has made qualified research expenditures for the period of 12 calendar months ending with the month for which the credit is sought of at least 20% of its total expenditures for those 12 months.

o See 7-9H-1 through 7-9H-6 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Rural Jobs Tax Credit

AGENCY: Taxation and Revenue Department DESCRIPTION: Employers in rural areas will be entitled to a tax credit when expanding their work force. PROGRAM/LOAN STRUCTURE: The Economic Development Department will determine which employers are eligible and will report

the listing to the Taxation and Revenue Department. Maximum Program Benefits:

o Modified combined, personal or corporate income tax credit; o The maximum credit is 6.25% of the first $16,000 wages paid for the qualifying job; o Employers located in Tier One (population of 15,000 or less) may claim the credit for four

qualifying periods; and o Employers located in Tier Two (population over 15,000, but still considered rural) may claim the

credit for two qualifying periods.

QUALIFICATION CRITERIA/COMMENTS: A job established by the employer that is occupied by an eligible employee for at least 48 weeks of a

qualifying period. The period of 12 months beginning on the day an eligible employee begins working in a qualifying

job or the period of 12 months beginning on the anniversary of the day an eligible employee began working in a qualifying job.

Legislation specifies that a company must have been awarded Job Training Incentive Program (JTIP) funds to qualify for the tax credit, but specific jobs within a company do not have to meet JTIP requirements.

The credit may be carried forward for up to three years and may be sold, exchanged or transferred. See 7-2E-1 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




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PROGRAM: Solar Market Development Income Tax Credit AGENCY: Taxation and Revenue Department DESCRIPTION: As of the 2006 Legislature, a 10% tax credit on the installation and purchase of solar thermal and photovoltaic systems in a residence, business, or agricultural enterprise in New Mexico is allowed; the desire is to encourage the use and development of clean sources of energy. ELIGIBILITY: Any taxpayer who files an individual New Mexico income tax return for a taxable year beginning

after January 1, 2006. This credit may not be claimed or allowed for a heating system for a swimming pool or a hot tub, a

commercial or industrial photovoltaic system other than an agricultural photovoltaic system on a farm or ranch that is not connected to an electric utility transmission or distribution system.

STRUCTURE: Tax credit. The Energy, Minerals, and Natural Resources Department has adopted rules addressing technical specification and requirements relating to safety, code and standards compliance, solar collector orientation and sun exposure, minimum system sizes, system applications, and lists of eligible components, establishing procedures to provide certification of solar thermal systems and photovoltaic systems for purposes of obtaining a solar market development tax credit. QUALIFICATIONS/CRITERIA: The total Solar Market Development Tax Credit allowed for either a photovoltaic system or a solar

thermal system shall not exceed $9,000. The Department shall allow Solar Market Development Tax Credits only for solar thermal systems

and photovoltaic systems certified by The Energy, Minerals, and Natural Resources Department. See 7-2-18.14 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or

find paperwork and applications at http://www.state.nm.us/tax/BizPge.htm. Call the office of the Secretary at (505)827-0341. Also visit the Energy, Minerals, and Natural Resources Department’s homepage at

http://www.emnrd.state.nm.us/EMNRD/MAIN/index.htm or call (505) 476-3318.




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PROGRAM: New Mexico Technology Jobs Tax Credit – Parts I & II

AGENCY: Taxation and Revenue Department DESCRIPTION: Tax credits for eligible expenses related to qualified research at a New Mexico facility to provide a favorable tax climate for technology based businesses engaging in research, development and experimentation to promote increased employments and higher wages. PROGRAM/LOAN STRUCTURE: Technology Jobs Tax Credit – Part I:

o Credit equal to 4% of eligible expenses; o Eligible expenses include payroll, depletable land, rent, buildings, equipment, computer software

and upgrades, technical books and manuals, test materials, consultants and sub-contractors performing work in New Mexico;

o Credit may be taken against gross receipts tax, compensating tax or state payroll tax; o Credit may be carried forward; and o Credit is doubled for investments by companies located in rural New Mexico.

Technology Jobs Tax Credit – Part II: o Credit equal to 4% of eligible expenses; o Credit requires taxpayer to increase base payroll expense by $75,000 for every $1 million of

investment for which the credit is claimed; o Credit may be taken against state income tax; o Credit may be carried forward; and o Credit is doubled for investments by companies located in rural New Mexico.

QUALIFICATION CRITERIA/COMMENTS: Credits not available for:

o Investments in property owned by the city or county in conjunction with an Industrial Revenue Bond;

o Investments that have received a credit under the Manufacturing Investment Credit Act; o National laboratories; and o Amounts reimbursed by unrelated persons (contract research).

Definition of qualified research: o Undertaken for the purpose of discovering information which is technical in nature, and the

application of which is intended to be useful in the development of a new or improved business component for the taxpayer; and

o Substantially all activities which constitute elements of a process of experimentation related to a new or improved function, performance, reliability or quality, but not related to style, taste, and cosmetic or seasonal design factors.

Rural areas are those areas in New Mexico other than the incorporated boundaries of Albuquerque, Las Cruces, Santa Fe or Rio Rancho.

See 7-9F-1 through 7-9F-12 NMSA. Visit the Taxation and Revenue Department homepage at http://www.state.nm.us/tax/home.htm or




2: Rent SupplementS


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Rent Supplements DESCRIPTION: Rent supplements are payments to owners of private housing on behalf of qualified low-income

tenants. Rent supplements come in the form of vouchers which tenants can apply to rent at the property of

their choosing. FUNCTION: Rent supplements increase rental income on the property being financed. Rent supplements may increase demand for the units, resulting in lower vacancy rates and more

stable rental income. QUALIFICATION AND USE CRITERIA: Properties must meet space and bedroom configuration requirements. Tenant's income cannot exceed 50% of the median income for the area. Tenant's rent cannot exceed 30% of their income. PROGRAM STRUCTURE: Qualified property owners or individuals are generally accepted on a first-come, first-served basis

from a waiting list of approved applicants. Property owners often use rent supplements in conjunction with other enhancements.

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PROGRAM: HUD Housing Choice Voucher Programs

AGENCY: Department of Housing and Urban Development (HUD) DESCRIPTION: Housing choice vouchers allow very low-income families to choose and lease or purchase safe, decent, and affordable privately-owned rental housing. The various types of vouchers include Conversion Vouchers, Family Unification Vouchers, Homeownership Vouchers, Project Based Vouchers, Tenant Based Vouchers, Vouchers for People with Disabilities, and Welfare-to-Work Vouchers.

Conversion Vouchers: Conversion Vouchers assist Public Housing Authorities (PHA) with relocation or replacement housing needs that result from the demolition, disposition, or mandatory conversion of public housing units. Also, Conversion Vouchers include providing assistance to families living in Section 8 projects for which the owner is opting out of the HAP contract. HUD is taking enforcement action against owners with project-based assistance, and projects for which the owner is prepaying the mortgage.

Family Unification Vouchers: Family Unification Vouchers are made available to families for whom the lack of adequate housing is a primary factor in the separation, or threat of imminent separation, of children from their families or in the prevention of reunifying the children with their families. Family Unification Vouchers enable these families to lease or purchase decent, safe and sanitary housing that is affordable in the private housing market. Interested families should contact their local PHA.

Homeownership Vouchers: For those who want to purchase their first home but need help meeting the monthly mortgage and other homeownership expenses via the local PHA

Project Based Vouchers: PHA can attach up to 20 % of its voucher assistance to specific housing units if the owner agrees to either rehabilitate or construct the units, or the owner agrees to set-aside a portion of the units in an existing development. Rehabilitated units must require at least $1,000 of rehabilitation per unit to be subsidized, and all units must meet HUD housing quality standards.

Tenant Based Vouchers: Tenant-Based Vouchers increase affordable housing choices for very low-income families.

Vouchers for People with Disabilities: There are three options for people with disabilities, Mainstream Vouchers (any age family that cares for a person with disabilities), Designated Housing Vouchers (non-elderly families who would be eligible for public housing if occupancy were not restricted to elderly households), and Certain Development Vouchers (non-elderly families that care for a disabled person and do not currently receive housing assistance).

Welfare-to-Work Vouchers: These vouchers were designed to address the lack of stable, affordable housing available to families attempting to transition from welfare to self-sufficiency. For a program overview, visit http://www.hud.gov/offices/pih/programs/hcv/wtw/overview.cfm.

ELIGIBILITY:

Conversion Vouchers: If a family lives in a public housing unit that scheduled to be demolished, disposed of or converted, they will be contacted by the PHA when they are eligible for a Conversion Voucher. Families living in projects that are affected by the owner's decision to opt-out of a Section 8 project-based contract, or by the owner's decision to prepay the mortgage, will be notified by the owner to contact the PHA. PHAs having jurisdiction in a community where the projects are located for either of the two categories are eligible to submit an application for Housing Choice Conversion Voucher funding. In order to be eligible, the PHA must have:

http://www.hud.gov/offices/pih/programs/hcv/wtw/overview.cfm

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1. A HUD approved application for demolition or disposition, a HOPE VI revitalization plan, or a plan for removal (mandatory conversion) of public housing units under Section 33 of the U.S. Housing Act of 1937, or

2. Jurisdiction in the areas where a project is located, and 3. The owner is opting out of a Section 8 project-based contract, prepaying a HUD issued

mortgage, subject to an enforcement action brought against the owner by HUD. Family Unification Vouchers: PHAs authorized under state law to develop or operate housing

assistance programs may apply. Each NOFA identifies allocation areas, amount of funds available per area and the selection criteria for rating and ranking applications. Families are eligible for these vouchers if they meet two conditions: (1) The Public Child Welfare Agency (PCWA) has certified that this is a family for whom the lack of adequate housing is a primary factor in the imminent placement of the family's child, or children, in out-of-home care, or in the delay of discharge of a child, or children, to the family from out-of-home care, and (2) The PHA has determined the family is eligible for a Housing Choice Voucher.

Homeownership vouchers: First-time homeowner or cooperative member. Minimum income requirement: Except in the case of disabled families, the qualified annual

income of the adult family members who will own the home must not be less than the federal minimum hourly wage multiplied by 2,000 hours. For disabled families, the qualified annual income of the adult family members who will own the home must not be less than the monthly Federal Supplemental Security Income (SSI) benefit for an individual living alone multiplied by 12. The PHA may also establish a higher minimum income requirement for either or both types of families. Except in the case of an elderly or disabled family, welfare assistance is not counted in determining whether the family meets the minimum income requirement.

Additional PHA eligibility requirements: The family meets any other initial eligibility requirements set by the PHA.

Homeownership counseling: The family must attend and satisfactorily complete the PHA's pre-assistance homeownership and housing counseling program.

Project Based Vouchers: PHAs refer families, who have already applied to a PHA for housing choice vouchers and are on the PHA's waiting list, to properties that have project-based voucher assistance when units become vacant.

Tenant Based Vouchers: Very low-income families (i.e. families with incomes below 50% of area median income) and a few specific categories of families with incomes up to 80% of the area median income are eligible. These include families that are already assisted under the 1937 U.S. Housing Act, such as families physically displaced by public housing demolition and owners opting out of project-based section 8 housing assistance payments (HAP) contracts. To determine eligibility, the PHA compares the family's annual income (gross income) with the HUD-established very low-income limit or low-income limit for the area. The family's gross income cannot exceed this limit.

Vouchers for People with Disabilities: For details on mainstream vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/mainstream.cfm, designated housing vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/designated.cfm, and certain development vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/certain.cfm.

Welfare-to-Work Vouchers: For an overview, visit http://www.hud.gov/offices/pih/programs/hcv/wtw/overview.cfm.

PROGRAM/LOAN STRUCTURE:

Conversion Vouchers: Upon being notified of HUD approval of their plan for the demolition or

http://www.hud.gov/offices/pih/programs/hcv/pwd/mainstream.cfm

http://www.hud.gov/offices/pih/programs/hcv/pwd/designated.cfm

http://www.hud.gov/offices/pih/programs/hcv/pwd/certain.cfm


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disposition or mandatory conversion of public housing units, the PHA is also notified to submit the housing choice voucher program application. Also, PHAs will be invited to apply for conversion vouchers by HUD when an owner opts-out of a Section 8 project-based contract or elects to prepay a HUD issued mortgage. The PHA then compares the family’s annual income (gross income) with the HUD-established very low-income limit or low income limit for the area to determine if a family is eligible for a conversion voucher; the family cannot earn more than this limit. In the case of mortgage prepayments, moderate income families may be eligible for assistance. Families that are affected by the conversion action will automatically receive a voucher if the family meets all other program requirements.

Family Unification Vouchers: Public Housing Agencies (PHAs) respond to notices of funding availability (NOFAs). The PHA compares the family’s annual income (gross income) with the HUD-established very low-income limit or low income limit for the area. The family's gross income cannot exceed this limit. It is the responsibility of a family to find a unit that meets their needs. If the family finds a

unit that meets the housing quality standards, the rent is reasonable, and the unit meets other program requirements, the PHA executes a HAP contract with the property owner. This contract authorizes the PHA to make subsidy payments on behalf of the family.

If the family moves out of the unit, the contract with the owner ends and the family can move with continued assistance to another unit. In the case of a housing conversion action, the family also has the option to select to remain in the former project-based unit.

The PHA pays the owner the difference between 30 % of family income and PHA determined payment standard or the gross rent whichever is lower. In some cases (e.g., housing conversion actions) gross rent may be higher than the payment standard and the family will receive the benefit of an "enhanced" voucher.

Homeownership vouchers: To apply for a housing choice voucher at the local PHA. Monthly homeownership expenses include: Mortgage principal and interest; Mortgage insurance premium; Real estate taxes and homeowner insurance; PHA allowance for utilities, PHA allowance for routine maintenance costs; PHA allowance for major repairs and replacements; Principal and interest on debt to finance major repairs and replacements for the home; and Principal and interest on debt to finance costs to make the home accessible for a family

member with disabilities if the PHA determines it is needed as a reasonable accommodation. The housing assistance payment (HAP) is the lesser of either the payment standard minus the

total tenant payment or the family's monthly homeownership expenses minus the total tenant payment.

The monthly tenant payment is generally 30% of the family's adjusted monthly income. Families that are eligible may purchase a home outside the initial jurisdiction if the PHA, but the

family may only use the voucher to purchase a unit in an area where the family is income eligible at admission to the program.

Project Based Vouchers: The PHA and the owner execute an agreement to enter into housing assistance payments (HAP) contract. Under this contract the owner agrees to construct or rehabilitate the units, and the PHA agrees to subsidize the units upon satisfactory completion of the rehabilitation or construction. Upon satisfactory completion of the rehabilitation or construction and for existing development, the PHA and the owner execute a HAP contract for a ten-year term that is dependent on availability of funding under the PHA's ACC with HUD. The

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HAP contract establishes the initial rents for the units and the contract term, and describes the responsibilities of the PHA and the owner. HAP contracts can be renewed subject to availability of funding. The PHA must adopt a written policy for selection of units to which assistance will be attached and must publicly advertise that it will accept owner proposals for the Project-Based Voucher Program. Generally, rents are set based upon market comparables and may not exceed 110% of the published existing housing fair market rents. Substandard rental housing is eligible if rehabilitation costs are at least $1,000 per unit.

Tenant Based Vouchers: Families apply to a local Public Housing Agency (PHA) that administers this program. When an eligible family comes to the top of the PHA's housing choice voucher waiting list, the PHA issues a housing choice voucher to the family.

Vouchers for People with Disabilities: For details on mainstream vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/mainstream.cfm, designated housing vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/designated.cfm, and certain development vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/certain.cfm.

Welfare-to-Work Vouchers: For an overview visit http://www.hud.gov/offices/pih/programs/hcv/wtw/overview.cfm.

QUALIFICATION/CRITERIA COMMENTS:

Conversion Vouchers, Family Unification Vouchers, and Tenant Based Vouchers: A family may choose a unit anywhere in the United States where there is a PHA that administers a Tenant-Based Voucher Program. However, the family may only use the voucher to rent a unit in an area where the family is income eligible at admission to the program. HUD makes a special allocation of funds to the PHA when it approves the PHA's demolition or disposition application. Similarly, when an owner opts-out of a Section 8 project-based contract or the owner prepays the mortgage, HUD makes a special allocation to the PHA.

Homeownership vouchers: The home must pass an initial housing quality standards inspection conducted by the PHA and an independent home inspection before the PHA may approve the purchase by the family. There is no preference based on the fact that you desire to use your voucher for homeownership. There is no time limit for an elderly household or a disabled family. For all other families, there is a mandatory term limit of 15 years if the initial mortgage incurred to finance purchase of the home has a term that is 20 years or longer, and for all other cases the maximum term of homeownership assistance is 10 years. The regulations are found in 24 CFR Part 982 (particularly see sections 625-642).

Project Based Vouchers: There are no appropriations for this program and HUD does not allocate funding for project-based voucher assistance. Instead, funding for project-based vouchers comes from funds already obligated by HUD to a PHA under its annual contributions contract (ACC). The PHA can use up to 20 % of its housing choice vouchers for project based vouchers. Any eligible family on a PHA's housing choice voucher waiting list that is interested in moving into the specific project is eligible. The PHA pays the owner the difference between 30 % of family income and the gross rent for the unit. Under the Project-Based Voucher Program, a PHA enters into an assistance contract with the owner for specified units and for a specified term. The PHA refers families from its waiting list to the project owner to fill vacancies. Because the assistance is tied to the unit, a family who moves from the project-based unit does not have any right to continued housing assistance. However, they may be eligible for a tenant based voucher when one becomes available. Contact the local PHA to determine whether the PHA administers a Project-Based Voucher Program and to obtain information.

Vouchers for People with Disabilities: For details on Mainstream Vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/mainstream.cfm, Designated Housing

http://www.hud.gov/offices/pih/systems/pic/haprofiles/index.cfm


http://www.hud.gov/offices/pih/programs/hcv/pwd/designated.cfm

http://www.hud.gov/offices/pih/programs/hcv/pwd/certain.cfm


http://www.access.gpo.gov/nara/cfr/waisidx_03/24cfr982_03.html


http://www.hud.gov/offices/pih/systems/pic/haprofiles/


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Vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/designated.cfm, and certain Development Vouchers, visit http://www.hud.gov/offices/pih/programs/hcv/pwd/certain.cfm.

Welfare-to-Work Vouchers: For an overview, visit http://www.hud.gov/offices/pih/programs/hcv/wtw/overview.cfm.

For all variations of the voucher program, regulations are found in 24 CFR Part 982. Visit the homepage at www.hud.gov or call the federal office (202) 708-1112.


http://www.hud.gov/

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PROGRAM: HUD Housing Choice Voucher Family Self-Sufficency Program (FSS)

AGENCY: Department of Housing and Urban Development (HUD) and local Public Housing Authorities DESCRIPTION: Family Self-Sufficiency is a HUD program that encourages communities to develop local strategies to help voucher families obtain employment that will lead to economic independence and self-sufficiency. ELIGIBILITY: Families that are selected to receive a voucher or who currently receive assistance through the housing choice voucher programs should discuss participation in the FSS Program with the local PHA. STRUCTURE: FSS Program services may include, but are not limited to: child care, transportation, education, job

training and employment counseling, substance/alcohol abuse, treatment or counseling, household skill training, and homeownership counseling.

PHAs can give a selection preference, for up to 50 % of its FSS slots, to eligible families with one or more family member enrolled in, or on the waiting list for, an FSS-related service or job placement program. For all other selections, the PHA must use an objective system, such as a lottery. PHAs may screen applicants for interest and motivation to participate in FSS, but may not screen for education, job history, credit rating, marital status, or number of children.

An interest-bearing FSS escrow account is established by the PHA for each participating family. An escrow credit, based on increases in earned income of the family, is credited to this account by the PHA during the term of the FSS contract. The PHA may make a portion of this escrow account available to the family during the term of the contract to enable the family to complete an interim goal such as education.

If the family completes the contract and no member of the family is receiving cash welfare assistance, the amount of the FSS account is paid to the head of the family. If the PHA terminates the FSS contract, or if the family fails to complete the contract before its expiration, the family's FSS escrow funds are forfeited.

QUALIFICATIONS/CRITERIA: The PHA and the head of each participating family execute an FSS contract of participation that

specifies the rights and responsibilities of both parties. The 5-year FSS contract specifies goals and services for each family. Family members must fulfill all requirements in order to obtain full benefits. The FSS contract requires that the family comply with the lease, that all family members become independent of welfare, and that the head of the family seek and maintain suitable employment. Possible sanctions for noncompliance with the FSS contract are termination from the FSS program, forfeiture of the FSS escrow account, withholding or termination of supportive services, and termination of housing choice voucher assistance.

The law provides that a family may complete its FSS contract and receive its escrow while continuing to receive housing assistance under the voucher program.

Regulations are found at 24 CFR 984. For additional information, visit http://www.hud.gov/offices/pih/programs/hcv/fss.cfm. Visit the homepage at www.hud.gov or call the federal office (202) 708-1112.

http://www.hud.gov/offices/pih/systems/pic/haprofiles/


http://www.hud.gov/offices/pih/programs/hcv/fss.cfm

http://www.hud.gov/

3: Interest rate subsIdIes


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Interest Rate Subsidies DESCRIPTION: Interest rate subsidies decrease interest expense to the borrower. The subsidies come in two forms:

(1) Direct cash grants to reduce a lender's interest rate; and

(2) Pass-through of below-market-rate funds to qualified borrowers. FUNCTION: Interest rate subsidies increase project cash flow by decreasing expenses. QUALIFICATION AND USE CRITERIA: Qualified projects must: create or retain jobs; create affordable housing units for low-income tenants,

first time home buyers or the elderly; improve areas which qualify as low- to moderate-income; or provide other approved public benefits.

PROGRAM STRUCTURE: Interest rate subsidies are generally negotiated with the provider of the subsidy. Interest rate subsidies are often used in conjunction with other enhancements. A common tie is with

subordinated mortgages. Subsidies may be limited to loans or grants from non-bank sources.

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PROGRAM: Affordable Housing Program (AHP)

AGENCY: Federal Home Loan Bank (FHLBank) via Dallas DESCRIPTION: This program finances home-ownership for families with incomes at or below 80% of the median income for an area. Also provides financing for rental housing in which 20% of the units must be affordable and occupied by very low-income families for the remaining useful life of the home or the mortgage term. Advances made to member institutions are priced below the cost of FHLBank obligations of comparable maturities and loaned to borrowers. ELIGIBLE USES: Down payments, closing costs, buy down principle amounts or interest rates, homebuyer education

and counseling costs, construction, or rehabilitation of owner-occupied homes and rental units. Includes housing owned or held by federal government agencies such as the Veterans Administration

(VA), and Housing and Urban Development (HUD); and housing sponsored by non-profit organizations.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: FHLBank assistance, whether provided exclusively or in combination

with other public or private resources, cannot exceed 20% of a household's gross monthly income. Equity: Varies with the individual institution. Maturities: Range from two months to 10 years. Rates: Priced below the FHLBank cost of funds of comparable maturities. Rates charged to the

individual borrower may vary. Additional subsidies may be available for qualified projects on a competitive basis.

QUALIFICATION CRITERIA/COMMENTS: Applications are competitively reviewed within 75 days. Qualification ratings are based on a 100-point scale using several criteria, including: meeting

low-income housing goals; achieving consistency with AHP priorities and having non-profit organization project participation.

Total monthly housing expenses of tenants living in the units, including the 20% reserved for the very low-income, cannot exceed 30% of the tenant's adjusted gross income.

For clarifications or more information, visit http://www.fhlb.com/community/ahp/#top. Visit the home page at www.fhlb.com or email questions to [email protected].

http://www.fhlb.com/community/ahp/#top

http://www.fhlb.com/

mailto:[email protected]

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PROGRAM: Community Investment Program

AGENCY: Federal Home Loan Bank (FHL Bank) DESCRIPTION: Provides low-cost, long-term loan advances to member institutions to finance housing units for low- and moderate-income families, and commercial projects in disadvantaged communities. This program is available for families with incomes less than 115% of area median income. Eligible areas are those with at least 51% low- to moderate-income households. ELIGIBLE USES: Purchase and rehabilitation of single-family and rental properties, including weatherization and

energy conservation. Participation in local, state and federal government-sponsored housing and economic development

programs. Commercial projects in low- and moderate-income communities. Refinancing multi-family housing units. In conjunction with HUD, FHA, state and local governments, and secondary market agency

programs. To purchase state housing finance agency bonds or mortgage-backed securities representing pools of

loans that could be funded directly with CIP advances. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Interest rate savings attributable to the advance are passed-through to

borrowers. Advances are based on the lender's asset size and other FHLBank criteria. Loans from lenders to individual borrowers can vary with the lender's criteria.

Equity: Varies among lenders. FHLBank criteria for advances vary based on specific lender size, assets, etc.

Maturities: Up to 20 years with a 30-year amortization. Rates: Advances are priced at the FHLBank cost of funds of comparable maturities, plus five basis

points. Fees: Guaranteed rate commitments are available at one-half of regular FHLBank fees. QUALIFICATION CRITERIA/COMMENTS: This program is available only for financial institutions which are members of the FHLBank system.

Membership is open to thrifts, commercial banks, credit unions and insurance companies. Members must apply to FHLBank for advances. Recipients report quarterly to FHLBank. Members are required to own stock in the FHLBank in proportion to their qualified mortgage assets

and to earn a market rate of return on their investment. CIP advances will be priced below the bank's standard advance rates for comparable maturities.

Community development advances may not exceed 10 % of an institution's total assets at the time of funding, which may not exceed $100 million.

Members must limit their rate mark up to 300 basis points on single family projects and 400 basis points on multi-family projects and must show that the benefit of the CIP advance pricing is passed through to the customer.

For more information, visit http://www.fhlb.com/community/cip_housing.html. Visit the home page at www.fhlb.com or email questions to [email protected].

http://www.fhlb.com/community/cip_housing.html

http://www.fhlb.com/


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PROGRAM: MFA Access Loans

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The purpose of Access Loans is to provide federally insured construction and permanent financing for small scale affordable housing projects throughout New Mexico. It is designed to minimize transaction and due diligence costs and expedite processing for small projects. ELIGIBILITY: Eligible projects include new construction, substantial rehabilitation, refinancing or acquisition of

projects having no less than five units per site; detached, semi-detached, row houses or multifamily structures are also eligible.

Eligible borrowers include single asset mortgagors, including non-profit organizations, for-profit corporations, joint ventures, limited liability companies, and partnerships.

STRUCTURE: Loan Term Structure: Permitted amortization periods of up to 35 years for existing properties and 40

years for new construction projects, plus up to 24 months for construction and lease up are typically available.

Ownership: Fee simple or renewable leasehold for at least 99 years or government agency lease for at least 10 years beyond the end of the term of the loan are allowed.

Interest Rates and Payments: Construction and permanent loan interest rates are set at loan closing or conversion. Payments are interest-only during construction, and amortization occurs over the remaining life of the loan beginning at conversion.

Prepayment is prohibited for the first 15 years and prepayment penalties will apply. Affordable use restrictions typically extend for 30 or more years.

QUALIFICATIONS/CRITERIA: MFA’s mortgage must be the first lien on the property. Secondary financing is allowed, with MFA

approval. The maximum loan amount is $2 million, adjusted as needed for a maximum loan to value ratio of

85% for existing projects and 90% for new construction, and for a total debt service coverage ratio of not less than 110%.

Loans may be non-recourse to the borrower, except for limited environmental indemnifications and in some cases, construction loan period guaranties.

Requirements include latent defects reserve of 2.5% of initial loan amount; operating deficit reserve or sustaining occupancy prior to permanent loan conversion; and ongoing replacement reserve contributions.

Approvals are conditioned upon MFA’s satisfactory review of the appraisal, site and market analysis, development team capacity, design, rehabilitation and other development costs, affirmative fair housing marketing plans, operating budget and environmental reports. HUD approval is required for principals’ previous participation, environmental and intergovernmental reviews. All tax credit projects are subject to subsidy layering review.

For more information contact Linda Bridge: Senior Development Program Manager, Main: (505) 843-6880, Direct: (505) 767-2262.

Visit the MFA’s homepage at http://www.housingnm.org/ or call (505) 843-6880 (800) 444-6880 (Toll free in New Mexico).


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PROGRAM: MFA Home Equity and Required Occupation Loan (HERO)

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: MFA’s HERO Program is a first and a second mortgage product that provides below market interest rates, down payment and closing cost assistance for the purchase of a home. HERO was designed to serve households in which at least one member is a police officer, nurse, teacher, firefighter, or an active member of the armed forces. ELIGIBILITY: First-time and non-first-time buyers qualify for a HERO loan. This loan can finance single-family detached homes, town homes, condominiums, homes in planned unit developments, and permanently attached manufactured homes. STRUCTURE: HERO is available through a statewide network of participating lenders,

http://www.housingnm.org/myHome/Homebuyer/lender.asp. Your lender will help you determine the maximum amount of your loan, based on your need. You

may qualify for up to 8% of the amount of the sales price of the home. Your lender will also coordinate directly with MFA on your behalf.

This second mortgage is repaid along with the mortgage on the home in with one payment every month over a 30-year period.

QUALIFICATIONS/CRITERIA: Households in which at least one member is a police officer, nurse, teacher, fire fighter, or an active

member of the armed forces qualify. You must be able to qualify for a typical mortgage to take advantage of HERO. For HERO first mortgage, current gross annual household income may not exceed $74,480 for

Albuquerque MSA (Bernalillo, Sandoval, and Valencia Counties), $81,480 for Santa Fe MSA (Santa Fe and Los Alamos), and $64,680 for all other areas of the state.

Total mortgage amount is determined by the program guidelines of your first mortgage loan. Your lender will advise you of the maximum amount for which you qualify. For Los Alamos County, the max is $286,875; Santa Fe County $343,799; all other areas of the state $237,031.

For more information contact one of the Homeownership Reps: MFA Main: (505) 843-6880 or visit the website http://www.housingnm.org/.

http://www.housingnm.org/myHome/Homebuyer/lender.asp

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PROGRAM: MFA HOME/Rental Gap Financing

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The HOME/Rental Gap Financing Programs provide gap financing for a variety of affordable and special needs housing projects throughout the state of New Mexico. As gap financing, HOME funds are typically the last dollars committed to a project and are used in combination with other housing resources such as MFA’s Tax Credit and 542(c) Loan Programs. The HOME/Rental Programs described herein provide assistance in the form of junior mortgages with below-market interest rates, extended maturity dates, and other advantageous loan terms tailored to the particular needs of individual projects. Loan amounts and specific terms are determined on the basis of the projects’ cash flow and affordability, among other considerations. ELIGIBILITY: MFA’s HOME funds can be awarded as gap financing for projects that qualify for the Housing Tax

Credit program. The maximum amount is $20,000 per unit for projects with 25 or fewer units, $10,000 per unit for

larger projects, with a maximum of $500,000 per project. The allocations are available to non-profit, for-profit, Tribal and public agency developers who apply

during the tax credit application period (typically on or about February 1st of each year). HOME/Rental Incentive funds may be awarded to projects using 4% tax credits that have received an

allocation of private activity bond volume cap from the State Board of Finance, or to projects with first mortgage financing derived from either 501(c)(3) bonds or other sources approved by MFA.

Funding for these projects is available on a first-come, first-served basis throughout the year until allocations are exhausted, in amounts not to exceed the lesser of $40,000 per unit, $800,000 per project, or 80% of the total development cost.

STRUCTURE: HOME awards are made on the basis of highest level of affordability and tax credit scoring until all

HOME dollars allocated for this purpose are awarded. Underwriting criteria used to determine principal and payment amounts are determined according to

tax credit program standards. QUALIFICATIONS/CRITERIA: These projects must meet all of the requirements set forth in the Tax Credit Qualified Allocation Plan,

and score high enough relative to other projects to receive a tax credit allocation. Projects are subject to cost limitations and underwriting procedures similar to those applied to tax

credit projects. MFA’s HOME funds cannot be awarded to projects in Albuquerque or Las Cruces. Native American

trust land projects are eligible. For further information contact Linda Bridge: Senior Development Program Manager, Main: (505)

843-6880, Direct: (505) 767-2262. Visit the MFA’s homepage at http://www.housingnm.org/ or call (505) 843-6880

(800) 444-6880 (Toll free in New Mexico).


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PROGRAM: MFA HOME/Single Family Development Gap Financing

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The HOME/Single Family Development Program provides partial or “gap” financing to non-profit and for-profit developers, public and tribal entities, and Community Housing Development Organizations (CHDOs) for the construction, acquisition and rehabilitation of single family homes throughout New Mexico. ELIGIBILITY: Units financed with HOME funds must be affordable to households earning no more than 80% of the

area median income adjusted for family size. Units of local government, public housing authorities, non-profit and for-profit developers, public and

tribal entities, and CHDOs are eligible to apply. Applicants must demonstrate the financial strength, organizational capacity and commitment to

complete the project. STRUCTURE: HOME/SFD provides junior mortgages with below-market interest rates, and other advantageous loan

terms tailored to the needs of the projects. HOME funds may be used in combination with other down payment and closing cost assistance

programs. However, all HOME subsidies combined can’t exceed $30,000 per unit. The use and timing of HOME funds will be determined by MFA at the time of application and may

take two forms: o HOME funds may be provided at the time of the sale to the homebuyer, and will be used to fill

the financing gap between what the homebuyer can afford and the sales price of the home; or o At the discretion of MFA, HOME funds may be provided earlier and used as interim construction

financing. QUALIFICATIONS/CRITERIA: The property must be located in New Mexico but may not be located within the city limits of

Albuquerque or Las Cruces. The sales price of the property to be acquired by a homebuyer may not exceed 95% of the area

median purchase price for that type of housing, as published by HUD. Upon completion the home must meet the Model Energy Code, accessibility requirements under the

Fair Housing Act, and local building codes. Applications must demonstrate that HOME funds are needed and will enhance affordability. Davis

Bacon wage rates are required in some cases. The long-term affordability of the property is ensured through a junior mortgage to the homebuyer.

This loan may take the form of a deferred payment, 0% interest loan, or as a below-market amortizing loan.

HOME funds must be repaid upon sale or transfer to an ineligible buyer, or refinancing of the property.

For forms and applications: http://www.housingnm.org/Developer/devAppsRefs.htm#rental or contact Linda Bridge: Senior Development Program Manager, Main: (505) 843-6880, Direct: (505) 767-2262.

Visit the MFA’s homepage at http://www.housingnm.org/ or call (505) 843-6880 (800) 444-6880.

http://www.housingnm.org/Developer/devAppsRefs.htm#rental


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PROGRAM: MFA Mortgage Booster Program

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: MFA’s Mortgage Booster Program is a second mortgage product that provides down payment and closing cost assistance to borrowers who qualify for MFA’s Mortgage $aver loan. ELIGIBILITY: Mortgage Booster is a loan designed to serve low-to-moderate income first-time homebuyers who don’t have adequate resources for a down payment and/or closing costs. Residences financed can include single family detached homes, town homes, condominiums, homes in planned unit developments, and permanently attached manufactured homes. STRUCTURE: The loan is repaid over 30 years with an interest rate applied. This loan is repaid along with your mortgage with a single payment every month. Mortgage Booster is available through a statewide network of participating lenders at

http://www.housingnm.org/myHome/Homebuyer/lender.asp. Your lender will coordinate everything directly with MFA so you do not have to fill our two

applications. QUALIFICATIONS/CRITERIA: You must be able to qualify for MFA’s Mortgage $aver Program to take advantage of this program. Current gross annual household income may not exceed the following:

Household Size (persons) 1 or 2 >3

Albuquerque MSA (Bernalillo, Sandoval, &

Valencia Counties)

$53,200 $61,180

Santa Fe & Los Alamos Counties $58,200 $66,930

All areas of the state $46,200 $53,130

For Mortgage Booster, current gross annual household income may not exceed $74,480 for

Albuquerque MSA (Bernalillo, Sandoval, and Valencia Counties), $81,480 for Santa Fe MSA (Santa Fe and Los Alamos), and $64,680 for all other areas of the state.

For more information contact one of the Homeownership Reps: MFA Main: (505) 843-6880 or visit the website http://www.housingnm.org/.


http://www.housingnm.org/myHome/Homebuyer/lender.asp


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PROGRAM: MFA Mortgage $aver, Mortgage $aver Plus, and Mortgage $aver Zero

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: MFA's Mortgage $aver Program offers below-market interest rates and/or closing cost assistance to

first-time homebuyers. The program is also available to individuals who have not owned a home (including a manufactured home on a permanent foundation) in the last three years. A borrower may qualify for a Mortgage $aver, Mortgage $aver Zero or Mortgage $aver Plus funds based upon household income and family size as well as the sales price of the home.

Mortgage loans available under the Mortgage $aver Program include FHA, VA, and a variety of conventional loans, including the My Community and Community Solutions Programs. Rural Housing Service (RHS) guaranteed, leveraged, or direct loans are also available as are loans on Native American trust lands.

The Mortgage $aver Zero and Mortgage $aver Plus Program save the borrower money because they are not required to pay an origination or loan discount fee at loan closing, leaving more money in the borrowers pocket. The Mortgage $aver Plus Program also provides the borrower with a grant (that does not have to be repaid) to help reduce the need for up-front cash at closing.

STRUCTURE: Mortgage $aver Loans are 30 year fixed rate loans available below the “market” rate. Mortgage $aver Zero is close to even with the “market” rate, but has no origination fee or discount

fee. Mortgage $aver Plus interest rate is slightly higher than the “market” rate, but has no origination fee

or discount fee, and features a 3% (of the principle loan amount) down payment assistance grant that is “built into” the loan. The grant can be used towards down payment, closing costs, and “prepaid” expenses; it can also fund an interest rate reduction or reduce the principal loan balance.

MFA has many second mortgage programs that could be available to buyers using Mortgage $aver/Zero Programs to help reduce “up front” or “out of pocket” expenses.

QUALIFICATIONS/CRITERIA: To qualify, a professional MFA qualified lender will review the borrower’s monthly income,

expenses, employment situation, and credit report so that they can determine if the borrower is eligible for the Mortgage $aver/Zero/Plus Programs. The lender will also determine the amount of down payment/closing cost assistance needed by the borrower and will recommend the appropriate second mortgage or grant program.

All three of these programs are available through a statewide and on Indian Reservations network of participating lenders. http://www.housingnm.org/lender/lender.asp.

Gross annual household incomes may not exceed the following, unless the purchase is in a targeted area.

http://www.housingnm.org/lender/lender.asp

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COUNTIES by family size

1 2 3 4 5 6

All areas of the state $46,200 $46,200 $53,130 $53,130 $53,130 $53,130

Albuquerque MSA (Bernalillo/Sandoval/Valencia)

$53,200 $53,200 $61,180 $61,180 $61,180 $61,180

Santa Fe MSA (Santa Fe/Los Alamos) $58,200 $58,200 $66,930 $66,930 $66,930 $66,930

Total home sales price may not exceed the limit below unless in a targeted areas.

MORTGAGE$AVER PRICE LIMITS*

Area Purchase Price Limits

Santa Fe $343,799

Los Alamos $286,875

All other counties $237,031

The following are specifications about the targeted areas. The home sales price limits for federally targeted areas is $286,875.

COUNTIES by family size

1 2 3 4 5 6

All areas of the state

$55,440 $55,440 $64,680 $64,680 $64,680 $64,680

Bernalillo $63,480 $63,480 $74,480 $74,480 $74,480 $74,480

Sandoval $63,480 $63,480 $74,480 $74,480 $74,480 $74,480

For more information contact one of the Homeownership Reps: MFA Main: (505) 843-6880 or visit

the website http://www.housingnm.org/.


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PROGRAM: MFA Primero Investment Fund

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: MFA’s Primero Loan Program is a flexible, low cost loan program created in 1993 to finance the development of affordable rental or special needs residential facilities in New Mexico that would be considered “high risk” by traditional lenders. Its goal is to leverage other public and private funds, and to expand the housing development capacity of New Mexico's non-profit, tribal and public agency housing providers. ELIGIBILITY: Public and tribal agencies, for profit and non-profit sponsors are all eligible. Applicants must provide

evidence of businesslike organizational operations, as well as experience in housing development or use of an experienced development team.

Funding may be approved for specific housing developments, or for programs to be operated by agencies to meet local housing needs. Rental, owner occupied and special needs projects of any size may be financed under this program, during any stage of the development process. New construction, conversion, and acquisition/rehabilitation projects may be financed. Service programs that enhance the delivery of financing to underserved markets may also be provided under contract to MFA.

Currently (June 2006), Primero’s four initiatives focus on tribal housing, colonias housing, rehabilitation, and manufactured housing, so these categories will receive priority.

STRUCTURE: Development loans will be underwritten and structured according to sound lending practices.

However, interest rates are determined at MFA's discretion, typically below market. Primero Loans are repaid through subsequent financing sources, or in some cases through cash flow. Terms cannot exceed five years but loans do not have to be amortized during their term. Loans are secured whenever possible but they may be subordinated to other debt. The maximum loan amount is $1 million, and availability of funds varies from time to time. Application forms can be obtained from MFA and submitted at any time. All loans are reviewed by staff, and loans above a proscribed amount will be approved by the Board

of Directors. Discussions with staff are recommended prior to preparation of applications, to identify appropriate application materials and make initial eligibility determinations. Forms: www.housingnm.org/Developer/devAppsRefs.htm#primero.

QUALIFICATIONS/CRITERIA: All projects and programs must be responsive to clearly identified housing needs. Income and/or rent

limits will apply to all projects and programs, but these will differ with the type of activity proposed. Applicants must deliver commitments from other sources of funds, or evidence that such funding is unavailable. For more information, contact Linda Bridge, Senior Development Program Manager, Main: (505) 843-6880 Direct: (505) 767-2262. [email protected].


http://www.housingnm.org/Developer/devAppsRefs.htm#primero



4: Equity Grants


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Equity Grants DESCRIPTION: Equity grants reduce the capital outlay for a project without increasing debt. Equity grants come in the form of direct cash contributions, gifts or sales at below market prices for

public land and/or buildings. FUNCTION: Equity grants reduce the need for borrowing, which improves project cash flow and strengthens

collateral coverage. Projects with equity grants may attract investors with limited commitment to the project since equity

grants are not investor funding. QUALIFICATION AND USE CRITERIA: To be eligible for an equity grant, projects must contribute to local housing and/or commercial

revitalization efforts. Other requirements may be associated with equity grants such as bringing the property up to code,

rehabilitating the facade, etc. Occasionally other rules apply to equity grants such as urban homesteading programs where sales

prices may be set at one dollar. PROGRAM STRUCTURE: Equity grants are usually negotiated with the grantor. Equity grants are often used in conjunction with other enhancements.

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PROGRAM: Administration for Native Americans (ANA) Grant

AGENCY: Department of Health and Human Services, Administration for Children and Families, Administration for Native Americans (ANA) DESCRIPTION: Provides financial assistance through grants or contracts to further the three goals of the ANA: governance, economic development and social development. ELIGIBLE USES: Technical assistance and training to develop conduct and administer projects. Funding to public or private agencies to assist local residents in overcoming special obstacles to

social and economic development. The following organizations are eligible to apply for grants with the Administration for Native

Americans (ANA): o Federally recognized Indian Tribes; o Consortia of Indian Tribes; o Incorporated non-federally recognized Tribes; o Incorporated non-profit multi-purpose community-based Indian organizations; and o Urban Indian Centers;

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Up to 80% of program cost, however, no set maximum or minimum

grant amount. Terms: Single or multi-year. QUALIFICATION CRITERIA/COMMENTS: Approximately $5 million in grants are distributed during three closings each fiscal year, usually in

February, May and October. Grant applicants must establish their own budgets. Visit the homepage at http://www.acf.hhs.gov/programs/program_information.html , the regional

page at http://www.acf.hhs.gov/programs/region6/, or phone the Dallas office at (214)767-9648.

http://www.acf.hhs.gov/programs/program_information.html

http://www.acf.hhs.gov/programs/region6/

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PROGRAM: Airport Improvement Program (AIP) AGENCY: Federal Aviation Administration DESCRIPTION: The Airport Improvement Program (AIP) provides grants to public agencies and, in some cases, to private owners and entities, for the planning and development of public-use airports that are included in the National Plan of Integrated Airport Systems (NPIAS). ELIGIBLE USE: Grants may be used for a public-use airport is an airport open to the public that is also:

o Publicly owned; o Privately owned but designated by the FAA as a reliever; or o Privately owned but having scheduled service and at least 2,500 annual enplanements.

The airport must be included in the National Plan of Integrated Airport Systems (NPIAS). Eligible projects include those improvements related to enhancing airport safety, capacity, security,

and environmental concerns. AIP grants may be used for construction and repair of runways, taxiways, aprons and roads within

airport boundaries; land acquisition; site preparation; construction and installation of lighting utilities, navigational aids and certain off-site work; purchase of safety equipment and equipment for security; snow removal, aviation-related weather reporting and measuring runway surface friction; development of airport terminals, and airport systems and plans; and fire fighting and emergency rescue equipment.

Funds may also be used for any construction or new equipment purchases necessary for compliance under the Americans with Disabilities Act of 1990, the Clean Air Act and the Federal Water Pollution Control Act with respect to the airport.

PROGRAM/LOAN STRUCTURE: For large and medium primary hub airports, the grant covers 75% of eligible costs (or 80% for noise program implementation). For small primary, reliever, and general aviation airports, the grant covers 95% of eligible costs. QUALIFICATION CRITERIA/COMMENTS: State, county, municipal and other public agencies may apply for the grants. Privately owned reliever

airports and privately-owned airports with scheduled passenger service and 2,500 or more annual enplanements are also eligible.

Visit the website for more information at http://www.faa.gov/airports/aip/, the homepage is www.faa.gov/index/cfm, or call toll free (866)-TELL-FAA (1-866-835-5322).

http://www.faa.gov/airports/aip/

http://www.faa.gov/index/cfm

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PROGRAM: Eagle Staff Fund (ESF) AGENCY: First Nations Development Institute DESCRIPTION: The Eagle Staff Fund seeks to support Native grassroots and tribal organizations that are working to create Native-controlled reservation economies. ELIGIBLE USES: The Eagle Staff Fund promotes economic development through:

o Technical assistance; and o Financial resources.

PROGRAM/LOAN STRUCTURE: Seed Grants: Are the only type of grant available to individuals and may be used to develop a project

for further funding. Start-up Grants: Are available for new projects or programs; adding staff or extending services;,

marketing strategies, feasibility studies, or entrepreneurial activities. Working Capital Grants: Are available for development enterprises, alternative financing strategies,

and business activities that contribute to the sustainability of Indian non-profit organizations. Development Capital Grants: Are available to organizations with demonstrated management and

program stability, funded projects have implications for national policy reform; and may be applicable elsewhere in Indian country.

QUALIFICATION CRITERIA/COMMENTS: Eligible organizations include:

o Tribal or Native government programs or entities; o Tribal or Native government enterprises; o Tribally or community-controlled development organizations; o Tribally or Native-controlled health, education, or other social programs or institutions; o Native arts and crafts associations, coops and guilds; o Intertribal and regional Tribal or Native groups; o Native grassroots efforts and community programs; o Native organizations or associations providing a direct service or program to reservations or local

Native communities; o Native traditionally structured family efforts or household income-generating activities; and o Native individuals.

All prospective applicants must submit a letter of intent. Visit the website at http://www.firstnations.org/gEagle.asp or email them at [email protected].

http://www.firstnations.org/gEagle.asp


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PROGRAM: Fannie Mae Programs

AGENCY: Federal National Mortgage Association (Fannie Mae) DESCRIPTION: Fannie Mae’s public mission and defining goal, is to help more families achieve the American dream

of homeownership. Provide financial products and services that make it possible for low-, moderate-, and middle-income

families to buy homes of their own. In order to serve America and carry out their mission, Fannie Mae needs to be a company that

represents all Americans. The organization holds diversity and inclusion, among their workforce and those they work with, as one of the highest values. Through Fannie Mae’s recruiting practices, they ensure the people who work hard everyday to help more Americans achieve homeownership represent a broad mosaic of the population they serve.

CONTACT INFORMATION: For information on single-family programs, visit http://www.efanniemae.com/sf/index.jsp. For information on multi-family programs, visit http://www.efanniemae.com/mf/index.jsp. The corporate website address is http://www.fanniemae.com/ or call toll free (800) 732-6643.

http://www.efanniemae.com/sf/index.jsp

http://www.efanniemae.com/mf/index.jsp

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PROGRAM: Freddie Mac Programs

AGENCY: Federal Home Loan Mortgage Corporation (Freddie Mac) DESCRIPTION: Freddie Mac makes housing more accessible and affordable for millions of families across America by linking homeowners and renters to the world’s capital markets. It is a unique mortgage credit system that makes homeownership a reality for more of America’s families. Every day, in neighborhoods across America, Freddie Mac helps families to buy their own homes and enjoy quality and affordable rental housing. To make home possible for America’s families, Freddie Mac: Reduces the costs of housing finance. Expands housing opportunities for all families, including low-income and minority families. Initiates community development lending projects. Promotes consumer education to improve financial literacy. Helps build strong families and thriving neighborhoods in the communities they help finance.

CONTACT INFORMATION: For single family information, visit http://www.freddiemac.com/singlefamily/mortgages/. For multifamily information, visit http://www.freddiemac.com/multifamily/product.htm. The Freddie Mac home page is www.freddiemac.com or email questions to

[email protected].

http://www.freddiemac.com/multifamily/product.htm

http://www.freddiemac.com/


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PROGRAM: EDA District Planning Program AGENCY: Economic Development Administration (EDA) DESCRIPTION: The EDA provides grant assistance to defray administrative expenses in support of the economic development planning efforts of Economic Development Districts, Redevelopment Areas and Indian tribes. ELIGIBLITY: The formulation and implementation of economic development programs designed to create or retain

full-time permanent jobs and income, particularly for the unemployed and underemployed in the most distressed areas served by the applicant constitute the eligible uses.

Eligible entities include: Economic Development Districts; Redevelopment Areas (RAs); organizations representing RAs, Indian Tribes, or multiple Indian Tribes; and other territories of the U.S.

PROGRAM/LOAN STRUCTURE: The minimum investment rate for planning investments is 50%; the maximum allowable investment

rate is ordinarily the maximum allowable investment rate set forth in Table One of 13 C.F.R. 301.4(b) for the most economically distressed county or other equivalent political unit (e.g., parish) within the region. The maximum allowable investment rate shall not exceed 80%, except that Indian Tribes may be eligible for an investment rate of 100%. In addition, states or political subdivisions of a state that have exhausted their effective borrowing and taxing capacity and non-profit organizations that have exhausted their effective borrowing capacity may also be eligible for a 10 % rate.

Term: 12 month increments for a total of 36 months. QUALIFICATION CRITERIA/COMMENTS: Factors considered by EDA: Responsiveness to program regulations; economic distress of the area;

past performance of current grantees; local leader's involvement in economic development activities; and amount of local participation provided matching dollars to the federal funds.

Planning activities supported with this aid must be part of a process involving significant leadership by public officials and private citizens.

For a complete list of EDA programs, visit http://www.eda.gov/xp/EDAPublic/AboutEDA/Programs.xml, or visit the homepage at http://www.eda.gov/ and contact the EDA in Denver at (303) 844-4715.

http://www.eda.gov/xp/EDAPublic/AboutEDA/Programs.xml

http://www.eda.gov/

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PROGRAM: EDA Public Works and Economic Development Program

AGENCY: Economic Development Administration (EDA)

DESCRIPTION: The EDA assists communities with funding the construction of public works and local facilities that contribute to private sector job creation and retention to alleviate unemployment and underemployment. Preference is given to rural communities. EDA funding decisions are based upon competitive selection criteria, some of which are outlined below. ELIGIBLE USE: Construction of public facilities and infrastructure improvements which immediately create and/or

retain jobs, and have a community and public benefit. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Covers 50% of project costs, in certain circumstances, 100%

investment rate is available. Equity: A local match of 50% of project cost is required. Sources include Community Development

Block Grant, local revenue sharing funds, RD loans, foundations, and other public and private sources.

Maturities, rates, and fees are all not applicable. QUALIFICATION CRITERIA/COMMENTS: Generally, projects should:

o Fulfill a pressing need such as job creation and retention; o Support an EDA-approved Overall Economic Development Plan and activities in enterprise

zones; o Demonstrate local private and public support; and o Benefit low-income residents.

Processing time is dependent on completeness of the request; thus applicants are urged to arrange pre-application conferences prior to formal application submission.

Applicants must receive a formal invitation from EDA to be considered for funding. For a complete list of EDA programs, visit

http://www.eda.gov/xp/EDAPublic/AboutEDA/Programs.xml, visit the homepage at http://www.eda.gov/ , or contact the EDA in Denver at (303) 844-4715.

http://www.eda.gov/xp/EDAPublic/AboutEDA/Programs.xml

http://www.eda.gov/

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PROGRAM: Federal Home Loan Bank Economic Development Program Plus (EDPPLUS)

AGENCY: Federal Home Loan Bank DESCRIPTION: The EDPPLUS Small Business Grant Program is designed to promote and enhance small business development; to foster business relationships between member institutions, small businesses, and small business development organizations; to create and retain jobs; and to assist member institutions in providing capital to underserved areas or to underserved populations. ELIGIBILITY: EDPPLUS funds may be used to assist small businesses in accessing needed working capital for start-up or expansion for the purpose of: Purchasing and constructing buildings. Facility expansion. Machinery and equipment purchase. Closing costs. EDPPLUS funds are not available for the refinancing of an existing small business loan. STRUCTURE: The following must be submitted for participation in the program: EDPPLUS grant application. EDP advance application. Copy of the business plan of the small business owner. Statement from the small business verifying the following information:

o Completion of an SBDC (or other qualified small business development organization) class in Small Business Management, or a statement verifying that the small business owner demonstrates an acceptable level of knowledge in business operations;

o Eligibility of small business according to SBA guidelines and definitions; and o Factual assessment of the degree of soundness of the small business applicant.

QUALIFICATIONS/CRITERIA: Maximum amount of EDPPLUS grant funds per member may not exceed $100,000 per year. No more than $25,000 in EDPPLUS funds may be granted to any one small business. Applications must be submitted by a member institution. EDPPLUS funds may constitute no more than the lesser of 15% or $25,000, of the total finance

package. Members must pass along the full amount of EDPPLUS funds to the small business owner. Members must use an EDP advance in conjunction with EDPPLUS funds. The small business owner must contribute at least 15% equity to the total finance package. The small business must qualify as a small business as defined by the Small Business Administration

(SBA). Effective October 1, 2000, SBA established a new table of small business size standards based on the North American Industry Classification System (NAICS). To determine whether a business is eligible as a small business, consult the SBA web site at www.sba.gov.

The small business must demonstrate evidence of an acceptable level of knowledge of business operations as evidenced by the completion of a class in small business management as provided by a Small Business Development Center (SBDC) or other qualified small business development organization. A statement from a SBDC or other qualified small business development organization verifying that the small business owner demonstrates an acceptable level of knowledge in business operations may be submitted in place of completion of a class.

The Community Investment Department may be contacted at (800)362-2944. Complete applications may be mailed or faxed to: Federal Home Loan Bank of Dallas, Community Investment Department, Attn.: EDPPLUS, P.O. Box 619026, Dallas, Texas 75261-9026, Fax: (214) 441-8577. Visit http://www.fhlb.com/community/cip_edpplus.html#top.

http://www.sba.gov/

http://www.fhlb.com/community/cip_edpplus.html#top

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PROGRAM: FSA Farm Labor Housing Loan/Grant AGENCY: US Department of Agriculture (USDA) Farm Services Agency (FSA) STATUTE: Housing Act of 1949, as amended, Section 514 and 516, Public Laws 89-117 and U.S.C. 1484 and 1489 FUNCTIONS: Response and mitigation. ELIGIBILITY CRITERIA: Grants are available to eligible applicants only when it is doubtful that such facilities can be provided unless grant assistance is available. Family partnerships, family farm corporations, or an association of farmers are eligible. TYPE OF ASSISTANCE/EXAMPLES: Financial assistance for project grants; guaranteed or direct loans to provide decent, safe and sanitary low-rental housing and related facilities for domestic farm workers. EFFECTIVENESS: Housing must be of a practical type and must be constructed in an economical manner; loan and grant funds and any funds furnished by the applicant may be placed in a supervised bank account. Loans and grants may be used for construction, repair or purchase all year round for seasonally occupied housing. FURTHER CONTACT: Visit a summary of available programs at

http://www.fsa..gov/drought/finalreport/fileg/summary_federal_programs_3.htm. Visit the loan services website at http://www.fsa.usda.gov/dafl/default.htm, the home page at

http://www.fsa.usda.gov/pas/, or call the Washington office at (202) 720-7809.

http://www.fsa.usda.gov/drought/finalreport/fileg/summary_federal_programs_3.htm

http://www.fsa.usda.gov/dafl/default.htm

http://www.fsa.usda.gov/pas/

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PROGRAM: HUD Community Development Block Grant Program (CDBG)

AGENCY: Department of Housing and Urban Development (HUD) DESCRIPTION: The CDBG program is a flexible program that provides communities with resources to address a wide range of unique community development needs. Beginning in 1974, the CDBG program is one of the longest continuously run programs at HUD. The CDBG program provides annual grants on a formula basis to 1180 general units of local government and States. ELIGIBLE USES: The site links the visitor to possible variations of the CDBG program.

Entitlement Communities: The CDBG entitlement program allocates annual grants to larger cities and urban counties to develop viable communities by providing decent housing, a suitable living environment, and opportunities to expand economic opportunities, principally for low- and moderate-income persons.

o Visit http://www.hud.gov/offices/cpd/communitydevelopment/programs/entitlement/ for more information about entitlement communities.

State Administered CDBG: Also known as the Small Cities CDBG program, States award grants to smaller units of general local government that carry out community development activities. Annually, each State develops funding priorities and criteria for selecting projects.

o Visit http://www.hud.gov/offices/cpd/communitydevelopment/programs/stateadmin/ for more information about the state administered CDBG.

Section 108 Loan Guarantee Program: CDBG entitlement communities are eligible to apply for assistance through the section 108 loan guarantee program. CDBG non-entitlement communities may also apply provided their State agrees to pledge the CDBG funds necessary to secure the loan. Applicants may receive a loan guarantee directly or designate another public entity, such as an industrial development authority, to carry out their Section 108 assisted project.

o Visit http://www.hud.gov/offices/cpd/communitydevelopment/programs/108/ for more information about section 108 loan guarantees.

Disaster Recovery Assistance: HUD provides flexible grants to help cities, counties, and states recover from Presidentially declared disasters, especially in low-income areas, subject to availability of supplemental appropriations.

o Visit http://www.hud.gov/offices/cpd/communitydevelopment/programs/dri/ for more information on disaster recovery assistance.

Colonias: Texas, Arizona, California, and New Mexico set aside up to 10 % of their State CDBG funds for improving living conditions for colonias residents.

o Visit http://www.hud.gov/offices/cpd/communitydevelopment/programs/colonias/cdbgcolonias.cfm for more information on colonias.

Renewal Communities/ Empowerment Zones/ Enterprise Communities (RC/EZ/EC): This is a program that uses an innovative approach to revitalization, bringing communities together through public and private partnerships to attract the investment necessary for sustainable economic and community development.

o Visit http://www.hud.gov/offices/cpd/economicdevelopment/programs/rc/index.cfm for more information on RC/EZ/EC.

Visit the homepage at www.hud.gov or call the federal office (202) 708-1112.

http://www.hud.gov/offices/cpd/communitydevelopment/programs/entitlement/

http://www.hud.gov/offices/cpd/communitydevelopment/programs/stateadmin/

http://www.hud.gov/offices/cpd/communitydevelopment/programs/108/

http://www.hud.gov/offices/cpd/communitydevelopment/programs/dri/

http://www.hud.gov/offices/cpd/communitydevelopment/programs/colonias/cdbgcolonias.cfm

http://www.hud.gov/offices/cpd/economicdevelopment/programs/rc/index.cfm

http://www.hud.gov/

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PROGRAM: New Mexico Job Training Incentive Program (JTIP) AGENCY: New Mexico Economic Development Department (NMEDD) DESCRIPTION: The Job Training Incentive Program (JTIP) funds classroom and on-the-job training for new employees in newly created jobs in qualified expanding or relocating businesses. ELIGIBLE USES:

JTIP reimburses approved companies for a portion of new employee wages during an initial training period which ranges from one to six months. The length of the training period depends on job complexity and the wages paid.

Custom training at an accredited New Mexico public educational institution may also be covered and is applied for separately.

PROGRAM STRUCTURE:

JTIP Staff at NMEDD work with companies to determine eligibility and provide technical assistance for proposal development.

The JTIP Board establishes program policy, assures funds are expended in accordance with New Mexico law, and approves or disallows funding requests.

QUALIFICATION CRITERIA: Eligibility for JTIP funds depends on the company’s business, the role of the newly created jobs in that business, and the trainees themselves. Company Eligibility: Three categories of business are eligible for consideration:

Companies that manufacture or produce a product in New Mexico. Renewable power generators, film post-production companies, and film digital production companies are eligible under this category.

Non-retail service companies that derive 50% or more of revenue from customers out of state. Certain “green” industries.

Job Eligibility: Jobs eligible for JTIP funding must:

Be full-time (minimum of 32 hours/week) and year round. Be newly created and directly related to the creation of the product or service. Meet a minimum wage requirement.

Trainee Eligibility: JTIP trainees must :

Be new hires to the company. Reside in New Mexico. Have lived in New Mexico for one continuous year at any time in their lives. Not have dropped out of high school in the three months prior to being hired.

PROGRAM BENEFITS: Wage Reimbursement: The rate of wage reimbursement depends on business location.

40% in the metro areas of Albuquerque, Farmington, Las Cruces, Los Alamos, Rio Rancho, Roswell, and Santa Fe

65% in rural New Mexico (outside the city limits of metro areas listed above)

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75% in frontier areas (communities with a population of 15,000 or fewer outside an MSA), in

economically distressed areas (counties with unemployment rates significantly higher than the state unemployment rate), and on Native American reservations

Customized Training: Delivered by a New Mexico post secondary educational institution.

Requires a separate proposal. Must occur within the JTIP wage reimbursement period. Reimbursed at a rate of up to $35 per hour per trainee. Reimbursement is capped at $1,000 per trainee.

COMMENTS:

Positions must be approved by the JTIP board before an employee begins work in order to be eligible for JTIP reimbursement.

Reimbursement occurs after trainees have completed the approved training period. For more information contact Therese Varela, Program Manager, at [email protected]

or Cindy Evans, Program Administrator, at [email protected].



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PROGRAM: RD Housing Preservation Grant Program

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: The Housing Preservation Grant (HPG) Program provides grants to sponsoring organizations for the repair or rehabilitation of low- and very low-income housing. Housing Preservation Grant assistance is available from grantees to assist very-low and low-income homeowners to repair and rehabilitate their homes. The grants are competitive and are made available in areas with a population of 20,000 or less and where there is a concentration of need. The objective of the HPG Program is to repair or rehabilitate individual housing, rental properties, or co-ops owned and/or occupied by very low- and low-income rural persons. ELIGIBILITY: Grantees will provide eligible homeowners with financial assistance through loans, grants and interest

reduction payments for necessary repairs and rehabilitation, including providing accessibility for handicapped persons.

Those assisted must own very low- or low-income housing, either as homeowners, landlords, or members of a cooperative. Very low income is defined as below 50% of the area median income (AMI); low income is between 50% and 80% of the AMI.

Eligible sponsors include state agencies, units of local government, Native American tribes, and non-profit organizations. HPG funds received by the sponsors are combined with other programs or funds and used as loans, grants, or subsidies for recipient households based on a plan contained in the sponsor's application. Funds must be used within a two-year period.

Assistance is also available to rental property owners to repair and rehabilitate their units providing they agree to make such units available to very-low and low-income families.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Varies by state. Term: Funded under the terms of a grant agreement for a period of up to two years. QUALIFICATION CRITERIA/COMMENTS: Program for state, commonwealth, trust territory or other political subdivision; public non-profit

corporation; Indian Tribe, band, group, nation including: Alaskan Indians, Aleuts, Eskimos, and any Alaskan native village of the United States; and private non-profit organizations.

Applications are accepted under a NOFA process. Visit the programs page at http://www.rurdev.usda.gov/wa/MFHhpg.htm, the multifamily programs

at http://www.rurdev.usda.gov/wa/MFHPrograms.htm, and http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_hpg.htm for more information.

Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/wa/MFHhpg.htm

http://www.rurdev.usda.gov/wa/MFHPrograms.htm

http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_hpg.htm

http://www.rurdev.usda.gov/rbs/index.html

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PROGRAM: RD Renewable Energy Programs

AGENCY: U.S. Department of Agriculture Rural Development (RD), ), Rural Business-Cooperative Service (RBS) DESCRIPTION: Programs authorized by the 2008 Farm Bill to provide financial support for the development of renewable energy projects to provide sources of energy other than petroleum based products. PROGRAMS: Repowering Assistance Program: Encourages the use of renewable biomass as a replacement fuel source for fossil fuels used to process

heat or power in the operation of eligible biorefineries. Eligible applicants are biorefineries, located in rural areas and owned by U.S. citizens. Maximum Program Benefit: Grant. Grant amounts are determined based on the quantity of fossil fuel a renewable biomass system is

replacing, the percentage reduction in fossil fuel used by the biorefinery, and the cost effectiveness of the renewable biomass system, economic benefit to the community and the potential to improve the quality of life in rural America.

For details, visit http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html. Or contact Ms. Jesse Bopp at (505) 761-4952 or [email protected]. Bioenergy Program for Advanced Biofuels: Supports the expanding production of advanced biofuels in rural areas. Eligible fuel is produced from renewable biomass other than corn kernel starch. Eligible applicants are advanced biofuels producers, located in rural areas and owned by U.S.

citizens. Maximum Program Benefit: Grant. Grant amounts depend on the number of producers participating in the program, the amount of

advanced biofuels being produced, and the amount of funds available. For details, visit http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html. Or call (505) 761-4952.

http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html



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PROGRAM: RD Rural Business Enterprise Grants Program (RBEG)

AGENCY: U.S. Department of Agriculture Rural Development (RD), Rural Business-Cooperative Service (RBS) DESCRIPTION: The Rural Business Enterprise Grants Program provides grants for rural projects that finance and facilitate development of small and emerging rural businesses, help fund distance learning networks and employment related adult education programs. ELIGIBILITY: Eligibility is limited to communities, towns, state agencies, private non-profit corporations, and

federally-recognized Indian Tribal groups. Technical assistance (market studies, business plans, training, etc.); purchase machinery and

equipment to lease to a small and emerging business; create a revolving loan fund (provide partial funding as a loan to a small and emerging business for the purchase of equipment, working capital or real estate); or construct a building for a business incubator for small and emerging businesses.

Rural is defined as under 50,000 in population. Priority is given to applications for projects in rural communities of 25,000 in population and under.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Grant.

Grants range from $10,000 to $50,000. Smaller projects are given higher priority. Businesses must have fewer than 50 employees and less than $1 million in gross revenues. Grant funds do not go directly to the business. QUALIFICATION CRITERIA/COMMENTS: Grants cannot be used for agricultural production, comprehensive area wide planning, loans by

grantees when the rates, terms, and charges for those loans are not reasonable or would be for purposes not eligible under RBEG regulations, development of a proposal that may result in the transfer of jobs or business activity from one area to another. This provision does not prohibit establishment of a new branch or subsidiary, development of a proposal which may result in an increase of goods, materials, commodities, services, or facilities in an area when there is not sufficient demand, programs operated by cable television systems, or to fund part of a project which is dependent on other funding, unless there is a firm commitment of the other funding to ensure completion of the project.

For details, visit http://www.rurdev.usda.gov/rbs/busp/rbeg.html. Or the Rural Development Homepage at http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/rbs/busp/rbeg.html


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PROGRAM: RD Rural Business Opportunity Grants Program (RBOG)

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Business-Cooperative Service (RBS) DESCRIPTION: The purpose of this program is to promote sustainable economic development in rural communities with exceptional needs through provision of training and technical assistance for business development, entrepreneurs, and economic development officials, and to assist with economic development planning. ELIGIBLE USE: Eligibility is limited to rural public bodies, rural non-profit corporations, federally-recognized Indian

Tribal groups, and cooperatives with primarily rural members. Identify and analyze business opportunities; identify and provide technical assistance; establish

business support centers; conduct local community or multi-county economic development planning; establish centers for training, technology and trade; conduct leadership training; pay reasonable fees for professional services.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Grant.

$50,000 for a project serving a single state; and Up to $150,000 for a project serving two or more states.

QUALIFICATION CRITERIA/COMMENTS: Must be able to show that the funding will result in economic development of a rural area. Rural is defined as areas under 50,000 in population. Priority is given to applications for projects in

rural communities of 25,000 in population and under. Funds may not be used for:

o Duplication of current services or replace or substitute support previous provided; o Pay costs of preparation of application; o Costs incurred prior to effective date of the grant; o Fund political activities; or o Acquisition of real estate, building construction or development.

For more information, visit http://www.rurdev.usda.gov/rbs/busp/rbog.htm.

http://www.rurdev.usda.gov/rbs/busp/rbog.htm

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PROGRAM: RD Rural Housing Repair and Rehabilitation Loan and Grant Programs

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: The Rural Housing Repair and Rehabilitation Loan and Grant Programs provide loans and grants for home repair and improvements in rural areas. ELIGIBLE USES: Funding for the removal of health and safety hazards, or to repair, improve or modernize. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The maximum loan is $20,000; the maximum grant is $7,500.

Grants are only authorized for the elderly (62 years of age or older) who are unable to repay the loan.

Equity: Although an official appraisal procedure is not usually done, the value of the property must be adequate to secure the loan.

Term: Up to 20 years. Rates: 1% for loans. Fees: Closing cost fees may be charged on larger loans. These can be incorporated into the loan

amount. QUALIFICATION CRITERIA/COMMENTS: The program applies to very-low income owner-occupants who do not have enough income to qualify

for Section 502 assistance (RD Rural Housing Insured Loan). The maximum adjusted income for eligibility is 50% of area median income.

Loan applicants must demonstrate the ability to repay the loan. Loan and grant applicants must own and occupy the property that needs repairs. For more information, visit http://www.rurdev.usda.gov/rhs/sfh/brief_repairloan.htm or the Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/rhs/sfh/brief_repairloan.htm


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PROGRAM: SBA Small Business Innovation Research Program (SBIR)

AGENCY: Small Business Administration (SBA) DESCRIPTION: The Small Business Innovation Research Program provides an opportunity for small technology-based firms to compete for federal research and development contracts. ELIGIBLE USE: Phase I: Exploration of the technical merit or feasibility of an idea or technology. Phase II: Research and Development is performed and the developer evaluates commercialization

potential. Only Phase I award winners are considered for Phase II.. Phase Three: From the laboratory to the marketplace. PROGRAM/LOAN STRUCTURE: The SBIR Program has three phases:

o Phase I awards of up to $150,000 for approximately six months of support; o Phase II awards up to $1,000,000, for up to two years; and o Phase III is the period during which Phase II innovation moves from the laboratory into the

marketplace. No SBIR funds support this phase. The small business must find funding in the private sector or other non-SBIR federal agency.

QUALIFICATION CRITERIA/COMMENTS: Applicants must be a small business as defined by the SBA; generally 500 employees or less, gross

income of less than $13 million depending on the type of industry, with no more than $750,000 outstanding on any SBA loan.

Specific projects are identified by 11 participating federal agencies. Businesses must apply to the agency that has made a research and development request. Applicants are given a referral notice with additional information about the agency's needs. The proposed product must be commercially viable, in addition to satisfying the needs of the agency. The applicant business then submits a one page summary of its idea. If the concept is accepted by the agency, the business becomes eligible for a Phase I award.

See http://www.sba.gov/sbir/indexsbir-sttr.html#sbir for more information and the handbook for SBIR proposal preparation http://www.sba.gov/gopher/Innovation-And-Research/SBIR-Pro-Prep/ or visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/sbir/indexsbir-sttr.html#sbir

http://www.sba.gov/gopher/Innovation-And-Research/SBIR-Pro-Prep/

http://www.sba.gov/starting_business/index.html

5: Loan Guarantees


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Loan Guarantees DESCRIPTION: Loan guarantees come in two forms:

(1) Repayment guarantees which insure the repayment of a portion of individual loans. These increase the chance of loan repayment by substituting the credit risk of the insurer for that of the borrower; and

(2) Reserve contributions to a loan loss reserve made on a loan-by-loan basis, but which accumulates for all loans in the pool. In either form, loan guarantees enhance the chances of repayment. In the case of repayment guarantees, that portion of a loan which is formally guaranteed can often be

sold in a secondary market to an investor. FUNCTION: Loan guarantees strengthen a secondary market source of repayment. When the guaranteed portion of a loan with a repayment guarantee is sold on a secondary market, that

sale can produce a profit for the lender. Such sales also help manage interest rate risk since the purchaser (investor) bears that risk.

Both types of guarantees encourage lenders to take risks they would not normally take. QUALIFICATION AND USE CRITERIA: Where repayment guarantees are involved, the originator usually certifies that the loan could not be

made without the guarantee (i.e. SBA loans). However, some loan guarantees are entitlement (i.e. home loans to war veterans) and such assurances are not required.

In the case of reserve contribution programs, the option of using the program is usually left to the lender. The only qualification is that the loan is of a type eligible for the program.

PROGRAM STRUCTURE: Pricing limits often apply on loans backed by specific repayment guarantees, but not on reserve

program loans. Providers of guarantees in both types of programs usually set limits on amounts available to

individual borrowers. Loans with specific repayment guarantees also have limits on the portion of the loan to be guaranteed. Loan guarantees can often be used in conjunction with other enhancement programs. However, limits

may be placed on the combined use of loan guarantees in conjunction with other government resources. This is usually not the case, however, with reserve programs.

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PROGRAM: BIA Indian Loan Guarantee Fund

AGENCY: Bureau of Indian Affairs (BIA), Division of Financial Assistance DESCRIPTION: Guaranteed loans that are made by private lenders to eligible applicants for up to 90% of the unpaid principal and interest due. ELIGIBLE USES: Funds may be used to finance Indian-owned commercial, industrial or business activities organized

for profit, provided eligible Indian ownership constitutes at least 51% of the business. Loans must benefit the economy of an Indian reservation. Also, interest subsidies might be granted when the business is incurring losses.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefit: Individual guarantees are limited to $500,000; $5.5 million maximum

for Tribes or organizations. Equity: Minimum of 20% of project funding must be cash or unencumbered assets to be used in the

proposed business. Term: Varies with use and repayment capacity, but does not exceed 30 years. Rates: Variable interest rate to be adjusted no more than quarterly. Maximum interest rate for a 90%

loan guarantee is equal to 1.5% above the New York prime; the maximum for an 80% loan guarantee is equal to 2.75% above the New York prime.

Interest Subsidy: Amount is based on the difference between the Treasury interest rate for direct loans and the interest rate charged by the lender. Currently, a maximum subsidy would reduce the effective interest rate to 6.625%. Subsidies are limited to the first three years of the loan.

Premium Charges: A one-time premium payment of 2 % of the guaranteed portion of a loan is charged to the bank. The lender may charge the premium to the borrower.

QUALIFICATION CRITERIA/COMMENTS: Applicant must be a federally recognized tribe or Alaskan Native group; a member of such a tribe or

group; or an Indian-owned corporation, partnership or cooperative association. Indian ownership must be at least 51% of the business. Application includes financial statements, resumes and organizational papers. For more information visit http://www.doi.gov/bia/Loan%20Guaranty%20Brochure.pdf and

http://www.doi.gov/bureau-indian-affairs.html. Contact the office of Economic Development at 1849 C Street, NW, MS 4641-MIB Washington, DC

20240 Phone: (202) 219-0740.

http://www.doi.gov/bia/Loan%20Guaranty%20Brochure.pdf

http://www.doi.gov/bureau-indian-affairs.html

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AGENCY: Export-Import Bank (Eximbank)

DESCRIPTION: The Export-Import Bank assists exporters with federal loan guarantees and credit insurance. ELIGIBLE USES: Eximbank working capital loan guarantees may be used to finance such pre-export activities as the

purchase of raw materials, finished products, labor and other services needed for processing export orders. They may also be used to cover the cost of freight, port charges and certain forms of overseas business development. Loan guarantees may be used for a specific transaction or as a revolving line of credit. There are no minimum or maximum amounts of funding.

Eximbank credit insurance may be used to protect exporters from the possibility of nonpayment by foreign buyers for either commercial or political reasons; also to enhance an exporter's cash flow.

PROGRAM/LOAN STRUCTURE: Equity: Equity required on loan guarantees is variable. Maturities: The maximum term on loan guarantees is 12 months, but is renewable. Insurance can

cover both short-term (less than one year) and medium-term (up to five year) transactions. Rates: Dependent on the transaction. Costs and Fees: Eximbank requires the buyer to make cash payment to the exporter equal to at least

15% of the U.S. supply contract. A non-refundable $100 application fee is charged as well as preliminary Commitment Application Processing Fee – 0.1 of 1% of the financed amount, a commitment Fee – 0.125% per annum on the undisbursed balance of the loan, an Eximbank Exposure Fee – Varies, and, depending upon tenor, country risk, and buyer credit risk.

QUALIFICATION CRITERIA/COMMENTS: Exporters may qualify for assistance if:

o Exported product has at least 50% U.S. content; o Been in business a minimum of one year; o Product is shipped from a U.S. port; o Buyer is from a country approved for export by the U.S. federal government; o Exported product or service is not military in nature and/or is not destined for foreign military

use; and o Exporter meets required Eximbank credit standards.

For more information visit http://www.exim.gov/products/loan_guar.html or call (202) 565-3946 (EXIM) or (800) 565-3946 (EXIM).

http://www.exim.gov/products/loan_guar.html

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PROGRAM: FHA Insured Mortgage Program, Section 203(b)

AGENCY: Federal Housing Administration (FHA), Department of Housing and Urban Development (HUD) DESCRIPTION: Insures lender's mortgages for financing single-family home purchases, construction or improvement for first-time home buyers and others unable to afford conventional loans. This is the most basic and commonly used mortgage insurance program. ELIGIBLE USES: Insures one to four-family unit home mortgages. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Insurers up to 97% of the first $25,000 plus 95% of the remainder if the

borrower intends to live in the dwelling. For dwellings less than one-year old, the mortgage limit is 90% of the value, up to 85% for refinancing, and up to 75% of the value if the property is being bought or built as an investment.

Equity: A minimum of 3%. For every $1,000 in value exceeding $5,000, an additional $50 must be paid in cash.

Maturities: May be amortized over a term of 10, 20, 25 or 30 years. Rates: Are negotiable between the lender and the borrower, and may vary among lenders. Fees: Applicants may pay the following fees: up to a 1% origination fee; a commitment fee to lock-in

a rate for a period of time; applicable closing costs; a monthly insurance premium included with the principal and interest payment; and discount points.

QUALIFICATION CRITERIA/COMMENTS: For lenders, participation requires HUD approval. There are two methods for processing FHA-insured single-family loans:

o Direct Endorsement - lenders are authorized by HUD to issue loan commitments without prior submission of paperwork to HUD; and

o HUD processing - lenders submit paperwork to HUD prior to approval for insurance. Visit the FHA Resource Center at http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm or call

(800) CALLFHA or (800) 225-5342. Specifics on the 203(b) program: http://www.hud.gov/offices/hsg/sfh/ins/sfh203b.cfm.

http://www.hud.gov/offices/hsg/sfh/fharesourcectr.cfm

http://www.hud.gov/offices/hsg/sfh/ins/sfh203b.cfm

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PROGRAM: FHA Title I Property Improvement and Manufactured Home Loan

AGENCY: Department of Housing and Urban Development (HUD) DESCRIPTION: HUD insures private lenders against loss on property improvement loans they make. The applicant must have a good credit history and the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. Search HUD's list to find an approved Title I lender in your state. HUD does not lend money for property improvements. ELIGIBLE USES: Property improvements, repairs and related costs. Loans on multifamily structures may be used only for building alteration and repairs. Purchase of, and movement and installation of manufactured homes, and purchase of a lot for the

dwelling. Title I can be used in connection with a 203k Rehabilitation Mortgage. Refinancing a loan in default is permitted, but cannot exceed an amount greater than the original

balance. PROGRAM/LOAN STRUCTURE: Maximum Loan Amount:

o Single family house - $25,000; o Manufactured house on permanent foundation - $17,500 (classified and taxed as real estate); o Manufactured house (classified as personal property) - $7,500; or o Multifamily structure - an average of $12,000 per living unit, up to a total of $60,000.

Maximum Loan Term: o Single family house - 20 years; o Manufactured house on permanent foundation - 15 years; o Manufactured house (classified as personal property) - 12 years; or o Multifamily structure - 15 years. o Equity: At a minimum, should equal the outstanding balance of any Title I loan on the property

exceeding $15,000. Rates: Negotiable between the lender and the borrower. Fees: The origination fee is not to exceed one% of the loan. Other chargeable fees may cover

architectural and engineering services; credit reports; flood insurance; inspections and appraisals. QUALIFICATION CRITERIA/COMMENTS: The borrower must own the property being improved. The borrower must apply to the lender and meet the lender's criteria. The lender approves/denies all applicants and services the loans. Loan Security: Any loan over $7,500 must be secured by a mortgage or deed of trust on the property. For additional information on that program, call (800) 767-7468 and request item number 2571. See

also http://www.hud.gov/offices/hsg/sfh/title/ti_home.cfm.

http://www.hud.gov/offices/hsg/sfh/title/ti_home.cfm

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PROGRAM: FSA Farmer Programs

AGENCY: U.S. Department of Agriculture (USDA) Farm Services Agency (FSA) DESCRIPTION: The FSA guarantees loans made by agricultural lenders for family farmers and ranchers for farm ownership, improvements and operating purposes. The FSA describes a family farm as one which a family can operate and manage itself. ELIGIBILITY: Farm Ownership Loans: Acquisition, construction or repair of farm homes or service buildings;

improvement of on-farm water supplies; refinancing debts; clearing and improving farmland; and establishing nonagricultural enterprises to assist farmers in supplementing their farm income.

Farm Operating Loans: Purchase items for farm operations, such as livestock, equipment, feed and seed, fuel, crop and insurance; family living expenses; building improvements; pollution abatement; water system development; and methods for complying with the Occupation Safety and Health Act.

To qualify for an FSA Guarantee, a loan applicant must: o be a citizen of the United States (or legal resident alien), which includes Puerto Rico, the U.S,

Virgin Islands, Guam, American Samoa, and certain former Pacific Trust Territories, o have an acceptable credit history as determined by the lender, o have the legal capacity to incur the obligations of the loan, o be unable to obtain a loan without a guarantee, o not have caused FSA a loss by receiving debt forgiveness on more than 3 occasions, o be the owner or tenant operator of a family farm after the loan is closed, and (For an OL, the

producer must be the operator of a family farm after the loan is closed. For an FO Loan, the producer needs to also own the farm.)

o not be delinquent on any Federal debt. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: guarantee operating loans and farm ownership loans of up to $852,000,

the maximum guarantee is 95%. Equity is based on the lender's policy. Maturities: Farm Ownership is up to 40 years. Operating Loan (equipment) is up to seven years.

Operating Loan (revolving line of credit) funds are advanced within three years and repaid in seven years, and non-revolving loans are advanced within one year and repaid in 18 months.

Rates are negotiable; variable or fixed. The FSA may subsidize the rate by 4% or the amount needed to achieve a 110% cash flow.

No fee for subsidized loans; one% guarantee for others. QUALIFICATION CRITERIA/COMMENTS: Eligible borrowers include individuals, partnerships, corporations, legal resident aliens and

cooperatives that conduct family farming or ranching operations. Processing time is normally seven to 21 days from the date a completed application is submitted. For more information on ownership and operating loans, visit

http://www.fsa.usda.gov/dafl/Downloads/FinalRule.pdf , http://www.fsa.usda.gov/DAFL/Guaranteed.htm , and the home page at http://www.fsa.usda.gov/pas/ or call (202) 720-7809.

http://www.fsa.usda.gov/dafl/Downloads/FinalRule.pdf

http://www.fsa.usda.gov/DAFL/Guaranteed.htm


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PROGRAM: MFA 542(c), FHA-Insured Multifamily Loan Program

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: This loan program is for construction and permanent loans for affordable rental developments. ELIGIBILITY: Eligible projects include new construction, substantial rehabilitation, refinancing or acquisition of

projects having no less than five units per site. Detached, semi-detached, row houses or multi-family structures are also included.

Eligible borrowers include single asset mortgagors, including non-profit organizations, for profit corporations, joint ventures, limited liability companies, and partnerships.

STRUCTURE: Loan terms are not to exceed 35 years for existing properties, and 40 years for new

construction projects. Maximum loan amount will be the lesser of:

o 85% of value for existing properties, or 90% for new construction projects as determined by MFA appraisal;

o The MFA approved costs of a refinancing; or o The loan amount which allows for a total debt service coverage ratio greater than 110%.

QUALIFICATIONS/CRITERIA: MFA mortgage must be the first lien on the property. Secondary financing allowed, subject to MFA

approval. Actual interest rates are based on market rates and are fixed prior to loan closing or bond issue date.

Advance rate locks are also available, at an additional cost to the borrower. For new construction, latent defects reserve of 2.5% of initial loan amount, operating deficit reserve

or sustaining occupancy prior to permanent loan closing, and ongoing replacement reserve contributions.

For rehabilitation, completion of repairs or escrow of 150% of repair costs, latent defects reserve of 2.5% of initial loan amount, and initial replacement reserve based on MFA reserve needs study. Operating deficit reserve or sustaining occupancy prior to permanent loan closing and ongoing replacement reserve contributions are required.

Owners must meet one of two minimum set-aside requirements which include both income and rent restrictions. o Option A:

40% of the units must be rented to households whose annual income does not exceed 60% of area median income; and an additional 20% of the units must be rented to households whose income does not exceed 120% of area median income, adjusted for family size as determined by HUD; or

o Option B: 20% of the units must be rented to households whose annual income does not exceed 50% of area median income; an additional 5% of the units must be rented to households whose income does not exceed 80% of area median income; and an additional 35% of the units must be rented to households whose income does not exceed 120% of area median income, adjusted for family size, as determined by HUD.

Rent requirements are the rent plus utility costs for the units set aside for households earning less than 60% of median income shall not exceed 30% of the median income levels specified.

Visit http://www.housingnm.org/Developer/542c.htm, the MFA’s homepage at http://www.housingnm.org/, or call (505) 843-6880 (800) 444-6880 (Toll free in New Mexico).

http://www.housingnm.org/Developer/542c.htm


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PROGRAM: MFA BUILD IT! Loan Guarantee Program AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The BUILD IT! Loan Guaranty Program was created in 1994 to encourage other lenders to provide interim financing when they might not otherwise do so – for “high risk” or unconventional projects, to unfamiliar types of borrowers or in unfamiliar geographic markets. ELIGIBILITY: Loans to public or Tribal agencies and non-profit developers can be guaranteed under this program. Loan guaranties can be used for owner-occupied or rental developments or special needs facilities.

Sites must be responsive to demonstrated community needs, and zoning must be pending or completed.

STRUCTURE: The program offers MFA guaranties of up to 50% of the risk of loss in the underlying loan. MFA has

successfully guarantied the loans of both conventional lending institutions and community lenders in the past.

MFA may charge fees of up to 5% of the guaranty amount. Application forms and program rules can be obtained by calling Elaine Wynne at (505) 767-2243 or

(800) 444-6880. QUALIFICATIONS/CRITERIA: Commitments for matching contributions from other public sector entities, equal to 10% of the total

development costs, must be in place. At least 40% of the units in the development must be affordable to households earning no more than

80% of adjusted area median income. The interim loan must be committed prior to application, but the commitment may be contingent on

MFA’s guaranty. Land development and acquisition or construction costs can be funded by the loan, but

predevelopment and permanent financing will not be guarantied. Lines of credit are eligible. The terms of the loans cannot extend beyond the closing of the subsequent

financing or three years, whichever is sooner. Interest rates must be at or below market, and other loan terms are also subject to MFA approval. For supplemental information and any forms

http://www.housingnm.org/Developer/devAppsRefs.htm#build or contact Linda Bridge: Senior Development Program Manager, Main: (505) 843-6880 Direct: (505) 767-2262.

Visit the MFA’s homepage at http://www.housingnm.org/ or call (505) 843-6880/(800) 444-6880 (Toll free in New Mexico).

http://www.housingnm.org/Developer/devAppsRefs.htm#build


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PROGRAM: Navajo Business and Industrial Development Fund

AGENCY: Navajo Nation, Division of Economic Development Support DESCRIPTION: The division provides loans or loan guarantees to qualified Navajo individuals or Navajo-owned businesses. The program is intended to foster the establishment of new businesses or the expansion of existing businesses within the Navajo Nation's territorial jurisdiction. ELIGIBLE USES: Funds can be used for any business purpose including, but not limited to: the purchase of equipment,

working capital, the construction of permanent facilities and the purchase of existing business interests, excluding goodwill.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Minimum loan is $10,000; maximum loan is $150,000 for new

businesses and 10,000 to $200,000 for expanding business. Loan not to exceed 90% of purchase price of assets, or 95% of value of permanent improvements on a reservation site.

Equity: Requires 10% equity from borrowers. Those unable to meet this requirement can apply for financial assistance from the Bureau of Indian Affairs.

Maturities: Depends on how the funds will be used: o Working capital: not to exceed 48 months; o Working capital for wages: not to exceed 12 months; o Equipment: useful life, not to exceed 72 months; o Permanent improvements: useful life, up to 204 months; o Existing business interests: not to exceed 84 months; and o The term of any loan is not to exceed two-thirds of the remainder of any land lease. If loan funds

are to be used for more than one of the above categories, then the maximum term will be a weighted average based on the amount for each use.

Rates: Minimum of 1% above Wall Street Journal prime rate. QUALIFICATION CRITERIA/COMMENTS: Must be an enrolled member of the Navajo Tribe. Partnerships, corporations or forms other than sole proprietorships must be 100% Navajo-owned and

controlled. The business venture must be located within the territorial jurisdiction of the Navajo Nation. Visit the homepage at http://www.navajobusiness.com/index.htm, the business programs page at

http://www.navajobusiness.com/doingBusiness/Programs/ProgramsFinAsst2.htm, and download the guidelines at http://www.navajobusiness.com/pdf/DngBus/Loans/BIDF.pdf. Call the main office at (928) 871-6544.

http://www.navajobusiness.com/index.htm

http://www.navajobusiness.com/doingBusiness/Programs/ProgramsFinAsst2.htm

http://www.navajobusiness.com/pdf/DngBus/Loans/BIDF.pdf

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PROGRAM: RD Business and Industry Guaranteed Loan Program (B&I)

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Business-Cooperative Service (RBS) DESCRIPTION: The purpose of the program is to improve, develop or finance business, industry and employment, and improve the economic and environmental climate in rural communities (under 50,000 population) and non-urbanized or non-urbanizing areas. This is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits. ELIGIBLE USES: Motels, hotels, bed and breakfast establishments; business and industrial acquisitions; construction,

conversion, expansion, repair, modernization or development costs; purchase of equipment, machinery or supplies; startup costs and working capital; processing and marketing facilities; pollution control and abatement; and refinancing for viable projects under certain conditions are eligible uses.

PROGRAM/LOAN STRUCTURE: Percentage of guarantee:

o 80% guarantee on loans $5 million or less; o 70% guarantee on loans $5 million to $10 million; o 60% guarantee on loans over $10 million; and o 90% guarantee on loans $10 million or less considered on an exception basis.

A maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million. A maximum of 10 % of program funding is available to value-added cooperative organizations for loans above $25 million to a maximum aggregate of $40 million.

Equity: Minimum 10% tangible balance sheet equity for an existing business; minimum 20% tangible balance sheet equity for a new business. Higher requirements may be imposed.

Maturities: Seven years for working capital; 15 years or useful life for the purchase of machinery and equipment; 30 years for real estate; and refinancing based on collateral.

Rates: Fixed or variable, and negotiated between the lender and the borrower. Fees: 2% guarantee fee on the guaranteed portion of the loan. 1% guarantee fee available under

certain circumstances. QUALIFICATION CRITERIA/COMMENTS: Priority is given to projects in communities under 25,000 in population. Any legal entity including individuals, public and private organizations, and federally recognized

Indian tribal groups are eligible borrowers. Visit http://www.rurdev.usda.gov/rbs/busp/b&i_gar.htm for more information. Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/rbs/busp/b&i_gar.htm


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PROGRAM: RD Community Programs Guaranteed Loan Program

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Utility Service DESCRIPTION: USDA Rural Development guaranteed loans made by lenders to finance the development of water and waste disposal systems, and other essential community facilities in rural areas. ELIGIBLE USES: Water and waste disposal include: water treatment and distribution; sewage collection and treatment;

solid waste collection, disposal and recycling; and storm drainage. Community facilities include: public safety buildings and equipment; health care; public service

buildings (schools, community buildings and courthouses); public infrastructure; and industrial parks and airports.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Up to 90%; no limit on loan size. Equity: Based on the lender's requirements. Maturities: A maximum of 40 years, or useful life of the security. Rates: Fixed or variable, and negotiable. Fees: A guarantee fee of 2% of the guaranteed portion of the loan. QUALIFICATION CRITERIA/COMMENTS: Guarantees for water and waste disposal systems are available for towns of up to 10,000 in population

and community facilities for communities of up to 50,000 in population. Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.


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PROGRAM: RD Guaranteed Rural Housing Program

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: Guarantees lender's loans to individuals and families in rural areas who are unable to obtain conventional financing at reasonable rates and who are without adequate housing. Secondary markets available to purchase loans are Fannie Mae, Ginnie Mae, Freddie and the New Mexico Mortgage Finance Authority. ELIGIBLE USES: Loans for existing dwellings or newly constructed homes for single-family, owner-occupied

residences. PROGRAM/LOAN STRUCTURE: There are four variations of the Section 515 loan program. They are Cooperative Housing, Downtown

Renewal Areas, Congregate Housing or Group Homes for Persons with Disabilities, and the Rural Housing Demonstration Program.

Maximum Program Benefits: 100% guarantee for the first 35% of the loan, and the balance of the principal and interest amount is guaranteed at 85%.

Equity: A down payment is not required by the RD. Maturities: 30 years. Rates: Market rate. Rates are fixed. Fees: 2% of the loan may be passed on to the borrower. Other reasonable and customary fees may be

charged to the borrower. QUALIFICATION CRITERIA/COMMENTS: Potential borrowers must demonstrate sufficient income to repay the loan and have a satisfactory

credit history to show a willingness and the ability to meet financial obligations. The borrower's debt-to-income-ratios typically must be 29% for principal, interest, taxes and

insurance (PITI); and 41% for total monthly obligations. The RD must approve lender participation in the program. Lender-approved applications are submitted to local offices for review and issuance of a Conditional

Commitment for Guarantee. In new Section 515 projects, 95 % of tenants must have very low incomes. In existing projects 75 %

of new tenants must have very low incomes. For more information, visit http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_rrh.htm and

http://www.rurdev.usda.gov/rhs/mfh/dev_splash.htm#Rural%20Rental%20Housing%20Guaranteed%20Loan%20Program.

Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_rrh.htm

http://www.rurdev.usda.gov/rhs/mfh/dev_splash.htm#Rural%20Rental%20Housing%20Guaranteed%20Loan%20Program

http://www.rurdev.usda.gov/rhs/mfh/dev_splash.htm#Rural%20Rental%20Housing%20Guaranteed%20Loan%20Program


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PROGRAM: RD Guaranteed Rural Rental Housing Program – Section 538

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: Guarantees lender's loans to construct rental housing for very low- to moderate-income income households; or elderly, handicapped, disabled persons with income not in excess of 115% of the median income of the surrounding area. ELIGIBLE USES: Funds construction, acquisition or rehabilitation of rural multifamily housing. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: 90% guarantee. Maturities: 40 years. Rates: Rates of the loans guaranteed must be fixed, as negotiated between lender and borrower,

within the HCFP maximum established under the Notice of Fund Availability (NOFA). The rate is based on the 30-year Treasury bond rate on the day prior to date of loan closing.

QUALIFICATION CRITERIA/COMMENTS: The RD must approve lender participation in the program. Lender-approved applications are submitted to local offices for review and issuance of a Conditional

Commitment for Guarantee. Loans of up to $1,500,000 must be approved by State Directors. All requests for loans above

$1,500,000 must be reviewed by the HCFP National Office. For more information visit http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_grrh.htm. Rural Development Homepage: http://www.rurdev.usda.gov/rbs/index.html.

http://www.rurdev.usda.gov/rhs/mfh/brief_mfh_grrh.htm


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PROGRAM: RD Renewable Energy Programs

AGENCY: U.S. Department of Agriculture Rural Development (RD), Rural Business-Cooperative Service (RBS) DESCRIPTION: Programs authorized by the 2008 Farm Bill to provide financial support for the development of renewable energy projects to provide sources of energy other than petroleum based products. PROGRAMS: Repowering Assistance Program: Encourages the use of renewable biomass as a replacement fuel source for fossil fuels used to process

heat or power in the operation of eligible biorefineries. Eligible applicants are biorefineries, located in rural areas and owned by U.S. citizens. Maximum Program Benefit: Grant. Grant amounts are determined based on the quantity of fossil fuel a renewable biomass system is

replacing, the percentage reduction in fossil fuel used by the biorefinery, and the cost effectiveness of the renewable biomass system, economic benefit to the community and the potential to improve the quality of life in rural America.

For details, visit http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html. Or contact Ms. Jesse Bopp at (505) 761-4952 or [email protected]. Bioenergy Program for Advanced Biofuels: Supports the expanding production of advanced biofuels in rural areas. Eligible fuel is produced from renewable biomass other than corn kernel starch. Eligible applicants are advanced biofuels producers, located in rural areas and owned by U.S.

citizens. Maximum Program Benefit: Grant. Grant amounts depend on the number of producers participating in the program, the amount of

advanced biofuels being produced, and the amount of funds available. For details, visit http://www.rurdev.usda.gov/BCP_RepoweringAssistance.html. Or call (505) 761-4952.




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PROGRAM: SBA CAPLines

AGENCY: Small Business Administration (SBA) DESCRIPTION: CAPLines are revolving lines of credit which allow a borrower to obtain funds as needed from a pre-approved credit account. The general formula is up to 80% of accounts receivable no older than 90 days and 50% of saleable inventory. All of SBA's short term lending programs fall under CAPLines, including Standard Asset-Based CAPLines, Small Asset Based CAPLines, Seasonal CAPLines, Contract CAPLines and Builders' Line CAPLines. ELIGIBLE USES: The line of credit is designed to finance the general working capital needs of a small business, while

allowing continuous borrowing and repayment during the period of the loan. Eligible uses of funds include:

o Purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities;

o Acquisition of equipment, machinery, furniture, fixtures, supplies, or materials; o Long term working capital including the payment of accounts payable and/or for the purchase of

inventory; o Refinancing existing business indebtedness which is not already structured with reasonable terms

and conditions; o Short term working capital needs including: seasonal financing, contract performance,

construction financing, export production, and for financing against existing inventory and receivable under special conditions; or

o Purchase of an existing business. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Guarantees up to $1 million in certain circumstances; maximum

guarantee is 85% on loans up to $150,000 and 75% on loans greater than $150,000. Maturities: Up to five years. Rates and Fees: See SBA Loan Guarantee program for rates and fees details. Holders of at least 20% ownership in the business are generally required to guarantee the loan.

Although inadequate collateral will not be the sole reason for denial of a loan request, the nature and value of that collateral does factor into the credit decision.

SEASONAL LINE: These are advances against anticipated inventory and accounts receivable help during peak seasons when businesses experience seasonal sales fluctuations. Can be revolving or non-revolving. CONTRACT LINE: Finances the direct labor and material cost associated with performing assignable contract(s). Can be revolving or non-revolving. BUILDERS LINE: If you are a small general contractor or builder constructing or renovating commercial or residential buildings, this can finance direct labor-and material costs. The building project serves as the collateral, and loans can be revolving or non-revolving.

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STANDARD ASSET-BASED LINE: This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender. SMALL ASSET-BASED LINE: This is an asset-based revolving line of credit of up to $200,000. It operates like a standard asset-based line except that some of the stricter servicing requirements are waived, providing the business can consistently show repayment ability from cash flow for the full amount. QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:

o Manufacturing - Maximum number of employees may range from 750 to 1,000; o Wholesale - Maximum number of employees may not exceed 100; o Retail/Service - Average annual receipts may not exceed $7 million to $35.5 million; and o Construction - Average annual receipts may not exceed $7 million to $33.5 million.

For more financing information, visit http://www.sba.gov/financing/loanprog/caplines.html or visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/caplines.html


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PROGRAM: SBA Defense Loan and Technical Assistance Program (Delta)

AGENCY: Small Business Administration (SBA)

DESCRIPTION: The Delta program provides financial and technical assistance to defense dependent small businesses adversely affected by defense reductions. The goal of the program is to assist businesses to diversify in the commercial market while remaining part of the defense industrial base. ELIGIBILITY CRITERIA: Businesses must have:

o Derived at least 25% of total business revenues in any one of five prior fiscal years from Department of Defense contracts, defense-related contracts with the Department of Energy or sub-contracts in defense-related prime contracts;

o Been adversely impacted by a reduction in defense spending or be located in an adversely impacted community; and

Businesses must meet one of the following public policy objectives: o Retain jobs of defense workers if the firm has been adversely affected; or o Create new employment in impacted communities; or o Modernize or expand the applicant’s facility so it can diversify its operation while remaining in

the national technical and industrial base. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Gross loan amount cannot exceed $2 million. Maturities are normally seven years for working capital and up to 25 years for real estate. For rates and fees, see SBA’s Loan Guarantee program. QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:


For more on the defense loan program, visit http://www.sba.gov/financing/loanprog/military.html or visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/military.html


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PROGRAM: SBA Export Working Capital Program

AGENCY: Small Business Administration (SBA) DESCRIPTION: Designed to provide short-term working capital to exporters. ELIGIBLE USES: Proceeds can be used

o To purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities;

o To acquire equipment, machinery, furniture, fixtures, supplies, or materials; o For long term working capital including the payment of accounts payable and/or for the purchase

of inventory; o To refinance existing business indebtedness which is not already structured with reasonable terms

and conditions; o For short term working capital needs including: seasonal financing, contract performance,

construction financing, export production, and for financing against existing inventory and receivable under special conditions; or

o To purchase an existing business. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The program encourages lenders to offer export working capital loans

by guaranteeing repayment of up to $1.5 million or 90 % of a loan amount, whichever is less. A loan can support a single transaction or multiple sales on a revolving basis.

Maturities: Typically 18 months or less. Rates: Negotiable between the applicant and lender. QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:


The applicant must have been in business for a minimum of 12 months prior to submitting the application.

EWCP is a combined effort of the SBA and the Export-Import Bank. For more on the working capital program see http://www.sba.gov/financing/loanprog/ewcp.html or

visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/ewcp.html


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PROGRAM: SBA International Trade Loan Program (IT)

AGENCY: Small Business Administration (SBA) DESCRIPTION: Assistance to eligible small businesses in an industry (1) engaged or preparing to engage in international trade or (2) adversely affected by import competition. ELIGIBLE USES: The proceeds of a SBA International Trade loan may be used to acquire, construct, renovate, modernize, improve or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade; or the refinancing of existing indebtedness that is not structured with reasonable terms and conditions. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The maximum gross amount ($2 million) and SBA-guaranteed amount

($1.5 million) for an IT Loan is the same as a regular 7(a) Loan. However, there is an exception to the maximum SBA 7(a) guarantee amount to one borrower (including affiliates). The maximum guaranteed amount can go up to $1,750,000 under the following circumstances: (1) The small business has been approved for an IT Loan, and (2) the business has applied for a separate working capital loan (or loans) under EWCP and/or other 7(a) Loan Programs. When there is an IT loan and a separate working capital loan, the maximum SBA guarantee on the combined loans can be up to $1,750,000 as long as the SBA guarantee on the working capital loan does not exceed $1,250,000. In all cases, to receive the maximum SBA guarantee amount of $1,750,000, the financing package for the small business must include an IT Loan that was approved after December 7, 2004.

Maturities: Dependent upon the useful life of the asset; up to 25 years for real estate. Rates and Fees:

o Interest rates are negotiated between the borrower and the lender but are subject to SBA maximums, which are pegged to the Prime Rate;

o Interest rates may be fixed or variable. Fixed rate loans of $50,000 or more must not exceed Prime plus 2.25 % if the maturity is less than seven years, and Prime plus 2.75 % if the maturity is seven years or more;

o For loans between $25,000 and $50.000, maximum rates must not exceed Prime plus 3.25 % if the maturity is less than seven years, and Prime plus 3.75 % if the maturity is seven years or more;

o For loans of $25,000 or less, the maximum interest rate must not exceed Prime plus 4.25 % if the maturity is less than seven years, and Prime plus 4.75 %, if the maturity is seven years or more; and

o See the SBA Loan Guarantee Program for details on fees. QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:


In addition to meeting the eligibility criteria established for the SBA Loan Guarantee Program, an applicant must establish that it: o Is in a position to significantly expand existing export markets or to develop new markets; or o Has been adversely affected by import competition. o For more on international trade, visit http://www.sba.gov/financing/loanprog/tradeloans.html or

visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/tradeloans.html


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PROGRAM: SBA Loan Guarantee Program

AGENCY: Small Business Administration (SBA) DESCRIPTION: Often referred to as the 7(a) Program. Guarantees loans made by lenders to small businesses. The lender may sell the guaranteed portion into the secondary market or retain the asset. ELIGIBLE USES: Includes the purchase of fixed assets or inventory; leasehold improvements; working capital; and

debt refinancing. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Guarantees up to $1 million; maximum guaranty is 85% on loans up to

$150,000 and 75% on loans greater than $150,000. Maturities: Normally seven years for working capital and up to 25 years for real estate. Rates: Interest rates may be fixed or variable. Fixed rate loans of $50,000 or more must not exceed

prime plus 2.25 % if the maturity is less than seven years, and prime plus 2.75 % if the maturity is seven years or more. o For loans between $25,000 and $50.000, maximum rates must not exceed prime plus 3.25 % if

the maturity is less than seven years, and prime plus 3.75 % if the maturity is seven years or more; and

o For loans of $25,000 or less, the maximum interest rate must not exceed prime plus 4.25 % if the maturity is less than seven years, and prime plus 4.75 %, if the maturity is seven years or more.

Fees: For loans of $150,000 or less, a 2 % guarantee fee will be charged. Lenders are again permitted to retain 25 % of the up-front guarantee fee on loans with a gross amount of $150,000 or less. o For loans more than $150,000 but up to and including $700,000, a 3 % guarantee fee will be

charged; o For loans greater than $700,000, a 3.5 % guarantee fee will be charged; and o For loans greater than $1,000,000, an additional .25 % guarantee fee will be charged for that

portion greater than $1,000,000. The portion of $1,000,000 or less would be charged a 3.5 % guarantee fee. The portion greater than $1,000,000 would be charged at 3.75 %.

The annual on-going servicing fee for all 7(a) Loans approved on or after October 1, 2005 shall be 0.545 % of the outstanding balance of the guaranteed portion of the loan. The legislation provides for this fee to remain in effect for the term of the loan.

QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:


Applications are generally processed by the participating lender and the SBA in 20 working days or less. Certified lenders have a three-day turnaround from SBA and Preferred Lenders may unilaterally decide to originate, guarantee, service and liquidate loans.

For more information on the loan guarantee program, visit http://www.sba.gov/financing/sbaloan/7a.html.

http://www.sba.gov/financing/sbaloan/7a.html

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PROGRAM: SBA Pollution Control Loan Program

AGENCY: Small Business Administration (SBA) DESCRIPTION: Pollution Control Loans are 7(a) Loans with a special purpose of pollution control. The program is

designed to provide financing to eligible small businesses for the planning, design, or installation of a pollution control facility. This facility must prevent, reduce, abate, or control any form of pollution, including recycling.

This program follows the SBA Loan Guarantee Program, also called the 7(a), guidelines with the following exception. Use of proceeds must be for fixed-assets only.

For more information on the pollution control program, visit http://www.sba.gov/financing/loanprog/pollution.html or visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/pollution.html


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PROGRAM: SBA Qualified Employee Trusts Loan Program

AGENCY: Small Business Administration (SBA) DESCRIPTION: The SBA offers guaranteed loans to employee trusts either to (1) help finance the growth of its employer’s small business or (2) to purchase ownership or voting control of the employer. ELIGIBLE USES: The SBA requires that the trust be sponsored by the employer firm and be primarily a source of loans

or investment. The trust must be qualified under either the Internal Revenue Code as an Employee Stock Ownership Plan (ESOP) or the Department of Labor implementation of Employee Retirement Income Security Act (ERISA).

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Guarantees a maximum amount up to $750,000; 80% guarantee on

loans up to $100,000 and 75% on loans greater than $100,000. Maturities: Usually seven years for working capital and up to 25 years for fixed assets. For rates and fees see the SBA Loan Guarantee program, also called the 7(a) Program. QUALIFICATION CRITERIA/COMMENTS: The SBA defines a small business as follows:


For more on the qualified employee trusts, visit http://www.sba.gov/financing/loanprog/trusts.html or visit the SBA homepage at http://www.sba.gov/starting_business/index.html.

http://www.sba.gov/financing/loanprog/trusts.html


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PROGRAM: VA-Guaranteed Home Loan Program

AGENCY: Department of Veterans Affairs (VA) DESCRIPTION: Assists eligible veterans to purchase single-family homes by guaranteeing a lender's mortgage against loss. Each qualified veteran receives a certificate of eligibility which provides a maximum entitlement. ELIGIBLE USES: VA-guaranteed financing may be used to buy a home, townhouse, or condominium unit in a project that has been approved by VA; build a home, repair, alter, or improve a home; simultaneously purchase and improve a home; to improve a home through installment of a solar heating and/or cooling system or other energy efficient improvements; to refinance an existing home loan; to refinance an existing VA loan; to reduce the interest rate and add energy efficiency improvements; to buy a manufactured (mobile) home and/or lot; to buy and improve a lot on which to place a manufactured home which you already own and occupy; or to refinance a manufactured home loan in order to acquire a lot. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits:

VA will guarantee up to 50 % of a home loan up to $45,000. For loans between $45,000 and $144,000, the minimum guaranty amount is $22,500, with a maximum guaranty of up to 40 % of the loan up to $36,000, subject to the amount of entitlement a veteran has available; and

For loans of more than $144,000 made for the purchase or construction of a home or to purchase a residential unit in a condominium or to refinance an existing VA guaranteed loan for interest rate reduction, the maximum guaranty is 25 % up to $60,000.

Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $240,000 because most VA loans are sold in the secondary market, which limits VA loans to that amount.

Equity: A down payment is not required by VA if the purchase price is less than the value of the property as determined by the VA. If the price is more than the established value, the veteran must make up the difference from personal resources.

Maturities: The maximum loan maturity is 30 years and 32 days. Rates: Are negotiated with the lender. Rates are fixed for the life of the loan, however the veteran

may refinance at a lower rate. Fees: A loan origination fee of 1%, a VA funding fee of 1% and reasonable closing costs. Paying

discount points in connection with VA financing is not allowed. QUALIFICATION CRITERIA/COMMENTS: The veteran must serve at least 90 days in active service in wartime or 181 continuous days in

peacetime to be eligible, and discharged under other than dishonorable conditions. If the discharge was in less than the required time of active duty, it must be attributable to a service-connected disability.

World War I service, Reserve active duty training and active duty training in the National Guard, unless activated for regular active duty, is not eligible for the guarantee. These may qualify for HUD assisted loans.

The lender must apply to the VA office for the guarantee. For more information, visit the homepage at http://www.homeloans.va.gov.

http://www.homeloans.va.gov/

6: Subordinated MortgageS


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Subordinated Mortgages DESCRIPTION: A subordinated mortgage is a direct loan which is in a subordinated collateral position to the primary

lender. Some subordinated mortgages are "near equity" in that they may be partially or completely forgiven

over time. FUNCTION: Subordinated mortgages enhance the primary lender's collateral position. Since nonpayment on a mortgage can result in project default, it is important for the first mortgage

holder to ascertain the likely requirements of the subordinated mortgage lender in the event of default. Revolving loan funds operate as subordinated mortgages. QUALIFICATION AND USE CRITERIA: Qualifications depend upon meeting quantifiable social objectives of the program such as housing

low-income people, creating jobs through business expansion, etc. Rules often apply regarding variables such as the portion of the total project eligible for a

subordinated mortgage, minimum equity investment, rental payments of tenants, etc. PROGRAM STRUCTURE: Subordinated mortgages are often used in conjunction with other enhancement programs. Subordinated mortgages often carry an interest rate subsidy. Deep interest rate subsidies may be an

indication that the subordinated mortgage lender is unlikely to foreclose if loan payments are missed.

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PROGRAM: EDA Economic Adjustment Assistance (Title IX)

AGENCY: Economic Development Administration (EDA) DESCRIPTION: This program is also known as the Long-Term Economic Deterioration/Revolving Loan Fund. Grants are provided to economic development intermediaries and non-profit organizations which establish revolving loan funds (RLF) for business expansion opportunities. ELIGIBLE USES: Awards may be used for activities such as developing and updating a CEDS and for implementing the CEDS by carrying out projects for site acquisition and preparation, construction, rehabilitation, and equipping facilities, technical assistance, market or industry research and analysis, and other activities set out in 13 C.F.R. 307.3. APPLICANT ELIGIBILITY: Eligible applicants for EDA investment assistance include a state, city, county, or other political subdivision of a state, including a special purpose unit of a state or local government engaged in economic or infrastructure development activities, or a consortium of such political subdivision, an institution of higher education or a consortium of institutions of higher education, an Economic Development District organization, a private or public non-profit organization or association, including a faith-based non-profit organization, acting in cooperation with officials of a political subdivision of a state, or an Indian Tribe, or a consortium of Indian Tribes. Individuals, companies, corporations, and associations organized for profit are not eligible. As used in this paragraph, 'state' includes the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. PROGRAM/LOAN STRUCTURE: The maximum investment rate will not exceed 50 % of the project cost, except that the project may receive an investment rate up to 80 % based on relative needs as measured by the severity and duration of unemployment and the per capita income level and extent of underemployment in the region. Indian Tribes may be eligible for an investment rate of 100 %. In addition, states or political subdivisions of a state that have exhausted their effective borrowing and taxing capacity or non-profit organizations that have exhausted their effective borrowing capacity may also be eligible for a 100 % rate. On average, EDA investment assistance covers approximately 50 % of project costs. QUALIFICATION CRITERIA/COMMENTS: EDA will assess the economic development needs of the affected region in which the proposed project will be located (or will service) as well as the capability of the proponent to implement the proposed project. EDA will select proposals competitively based on strategic areas of interest and priority considerations identified in the applicable announcement of Federal Funding Opportunity (FFO). EDA may also consider the degree to which an investment in the proposed project will satisfy: (a) Is market-based and results driven; (b) Has strong organizational leadership; (c) Advances productivity, innovation and entrepreneurship; (d) Looks beyond the immediate economic horizon, anticipates economic changes and diversifies the local and regional economy; and (e) Demonstrates a high degree of local commitment. A proposal for investment assistance must meet EDA investment policy guidelines and other requirements as set out in the applicable FFO. For more, visit the home page at www.eda.gov or call (303) 844-4715.

http://www.eda.gov/

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PROGRAM: SBA 504 Loan Program AGENCY: Enchantment Land Certified Development Company (ELCDC) DESCRIPTION: The SBA 504 Program provides “economic development financing specifically designed to stimulate private sector investment in long-term fixed assets to increase productivity, create new jobs, and increase the local tax base”. ELIGIBILITY: Typical candidates for 504 Loans are businesses that are healthy, for-profit and have a track record of

growth. Company must be a small business, with a net worth of less than $7.5 million and an average annual

net profit after taxes of less than $2.5 million. New jobs must be created (or in some instances, job retention will suffice) as a result of the new fixed

assets being financed. The rule-of-thumb is that a project must create one new job for every $65,000 of debenture.

However, projects with a high community impact and low direct job impact may be considered when achieving a Community Development or Public Policy goal.

Manufacturing firms in NAICS 30, 31 and 32 may be eligible for up to $4 million in debenture financing.

A start-up business is eligible if, the small business concern can demonstrate: o That it has qualified management with related industry experience; o A strong business plan backed by thorough research and well-based financial projections; and o Access to an adequate amount of working capital, and a 20 % (or greater) overall equity

contribution. Eligible use of 504 proceeds includes

o Land/buildings - purchase existing building, new construction, remodel/renovations; o Machinery and equipment - minimum useful life of ten years; o 10% contingency for cost overruns; and o Professional fees-appraisal, architect, engineering, environmental report.

STRUCTURE: The SBA 504 Program is a cooperative effort between the ELCDC/SBA, private sector lenders, i.e.,

banks and some non-bank lenders), and New Mexico small business. o Small business: Applicant contributes a minimum of 10% cash toward the total 504-Loan eligible

costs for a project. Single purpose type facilities require an additional 5%, and new/start-up businesses another 5% down; and

o ELCDC: The SBA (via ELCDC) provides up to 40% or $1.5 million ($2 million in certain circumstances), whichever is less.

504 Loan is at a fixed interest rate for 20 years; 10 years for equipment. Private sector lender: provides the balance of the money (50%). The bank loan is at “reasonable”

market rates and terms and at least 10-years when the 504 Loan is 20-years. SBA 504 Loans carry a fixed rate of interest - determined at the time the debentures are sold. 10-year terms are allowed for equipment purchases and 20-year terms for real estate. Private lender’s loan must carry a minimum term of 7 years for projects involving machinery and

equipment, and 10 years for projects involving real estate. The private lender’s loan may be on a fixed or variable interest rate.

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Repayment of Interim Financing:

o Bank points & construction interest; o 504 project cannot include tenant space improvements; and o No debt refinancing in 504 Loan portion but, might be eligible to be structured and included in

bank’s first mortgage. Collateral

o SBA 504 Loans are typically secured by a lien on fixed assets acquired with loan proceeds to reasonably assure loan repayment;

o ELCDC/SBA’s lien is subordinate to the private lender’s position; and o SBA requires the personal guaranties of the principals (with 20% or more ownership and/or a key

management position). QUALIFICATIONS/CRITERIA: Application package should initially contain:

o Description of the project; o Estimate of total project costs, i.e. purchase agreement for real estate and/or equipment and

construction contractor bid(s); o Three years tax returns (and a current interim) financial statement on the small business concern;

and o Personal financial statements of all officers/stockholders with 20% or more ownership in the

business. Visit the ELCDC page at http://www.elcdc.com/504.html or call ELCDC at (505) 843-9232.

http://www.elcdc.com/504.html

7: Technical assisTance


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Technical Assistance

DESCRIPTION: Technical assistance involves improving skills and providing assistance through direct consultation

and specialized training. Technical assistance may focus on broad management issues, as well as specialized issues. Services

provided may include legal and accounting assistance; marketing and business planning assistance; technical assistance on specific product production problems; counseling for potential home buyers; referral to sources of financing; in some instances, in-house financing mechanisms, etc.

FUNCTION: Technical assistance can improve management and technical capacity, and hence the probability of

the project's success. Technical assistance may also improve the quality of available information about the borrower via

improved business plans, financial statements, etc. QUALIFICATION AND USE CRITERIA: Potential users of the assistance qualify by the nature of their project (i.e. non-profit developer), size

of their project (i.e. small business), location of their project (i.e. small business incubator), income of their participants (i.e. low-income homebuyer), etc.

PROGRAM STRUCTURE: Technical assistance providers define who is eligible for the assistance. Space limitations (i.e. small business incubator) or resource limitations (i.e. available consultants)

may cause the service to be rationed as well. Services are widely used with other enhancements.

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AGENCY: ACCION New Mexico

DESCRIPTION: A local non-profit organization, ACCION New Mexico's mission is to provide business credit and training to self-employed individuals and families who have limited or no perceived access to traditional credit sources. ELIGIBLE USE: Eligible businesses may be:

o Informal or formal; o Full or part-time; o Mom and pop types; o Store-front based; or o Home-based.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: ACCION provides lines of credit, fixed asset and working capital loans

from $200 to $50,000. The program operates on a stepped-lending basis with an average first loan of $500. If the loan is

repaid in a timely manner and the entrepreneur remains committed to the business, they may be eligible to apply for larger loans.

Maturities: Short term, dependent on the loan amount. Rates: Market, similar to personal credit card rates. Fees: Closing fees are charged. For some sample figures, visit http://www.accionnm.org/credit_terms.asp. QUALIFICATION CRITERIA/COMMENTS: Eligible applicants must:

o Have an existing entrepreneurial activity, formal or informal, with at least six months of sales; o Be at least 18 years of age; o Be strongly committed to the business and to repaying the loan on time; and o Have limited or no perceived access to bank business credit.

ACCION will provide technical assistance. ACCION works closely with other programs providing financial and technical assistance. Visit the ACCION homepage: www.accionnm.org , or call (505) 243-8844, toll-free: (800) 508-7624.

http://www.accionnm.org/credit_terms.asp

http://www.accionnm.org/

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PROGRAM: First Nations Oweesta Corporation AGENCY: First Nations Financial Project (FNFP), Oweesta Program DESCRIPTION: As part of an ongoing effort to stimulate small businesses, home ownership and economic development in Native Communities, OWEESTA provides the training and technical assistance needed to get Native Community Development Financial Institution (NCDFI) up and running. ELIGIBLE USES: Training and technical assistance programs will address: CDFI basic building blocks and market analysis. The lending process. Board of Directors training. Ongoing operational issues. Institutional structure and policy. Business planning and implementation. Fundraising for Native CDFIs. Financial education programming. QUALIFICATION CRITERIA/COMMENTS: Visit Oweesta homepage at www.oweesta.org.

http://www.oweesta.org/

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PROGRAM: International Trade (State)

AGENCY: Economic Development Department (EDD), International Trade Division DESCRIPTION: The International Trade Division offers export assistance, consultations on business practices, and a wealth of knowledge in doing business internationally. Additionally, they have trade networks throughout the globe available to assist you in a variety of matters. STRUCTURE: The International Trade Division offers trade missions, trade exhibitions, and overseas offices to help

expand your business’s market place. Provides free professional assistance in developing overseas markets for products. Contacts New Mexico’s trade offices in Mexico, Israel, and Japan. Provides representation at international trade fairs. QUALIFICATION CRITERIA/COMMENTS: Visit the Economic Development homepage at www.edd.state.nm.us or

http://www.edd.state.nm.us/index.php?/about/category/International%20Trade/.

http://www.edd.state.nm.us/

http://www.edd.state.nm.us/index.php?/about/category/International%20Trade/

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AGENCY: International Trade Administration (Federal)

DESCRIPTION: Under a cooperative agreement between the district office of the International Trade Administration and the Trade Division of the New Mexico Economic Development Department (EDD), exporters and importers may receive timely assistance with most routine trade issues, as well as assistance with other subjects requiring more in-depth research. ELIGIBLE USES: The U.S. Department of Commerce and Foreign Commercial Service branch offices in Albuquerque

and Santa Fe provide information about export processes and U.S. export regulations, limited trade counseling, access to services for exporters, and foreign buyer and market information.

Technical assistance on export markets is available from a large office library and from U.S. consular offices worldwide.

QUALIFICATION CRITERIA/COMMENTS: Contact: Santa Fe U.S. Export Assistance Center Phone: (505) 231-0075. Email:

[email protected], New Mexico Dept. of Economic Development, P.O. Box 20003, 1100 St. Francis Drive (use only for courier service, Santa Fe, NM 87504-5003.

Visit the home page at http://export.gov/index.asp and http://export.gov/eac/dom_staff_list.asp?PostName=Santa%20Fe for more information.


http://export.gov/index.asp

http://export.gov/eac/dom_staff_list.asp?PostName=Santa%20Fe

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AGENCY: National Economic Development Associates, Inc. (NEDA) DESCRIPTION: NEDA was created to assist existing minority entrepreneurs. ELIGIBLE USES: Assistance is provided in:

Capital development and financing; Marketing and advertising; Procurement and contracting; Construction contracting; Computer networks; Financial management and accounting; and Tax planning.

PROGRAM/LOAN STRUCTURE:

Fees: Fees are charged on an hourly basis and are subsidized for minority-owned businesses by the federal government.

QUALIFICATION CRITERIA/COMMENTS:

An initial interview determines a firm’s goals, present situations and needs. If accepted for NEDA assistance, a specific plan will be agreed upon. Visit the website at www.nedainc.net or call (505) 843-7114.

http://www.nedainc.net/

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AGENCY: New Mexico Community Foundation

DESCRIPTION: The New Mexico Community Foundation offers small grants, technical assistance, "capacity building" workshops, and serves as a convener around important issues for non-profit organizations and communities throughout New Mexico, especially in rural areas. ELIGIBLE USES: Assistance is available for community organizing and development, organizational infrastructure

support, conflict resolution, AIDS education and prevention. The Foundation is especially interested in worthwhile projects which focus on youth, women and girls, environment/ecology issues, Native American community re-investment, innovative arts programs, and "the dreams of the community".

QUALIFICATION CRITERIA/COMMENTS: Communities and organizations throughout New Mexico are eligible, with attention given primarily

to those outside of Albuquerque and Santa Fe. Persons/organizations/communities interested should call to be put on the Foundation's mailing list

for announcements of workshops and the availability of grant funds. Visit the home page at www.nmcf.org.

http://www.nmcf.org/

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AGENCY: New Mexico Manufacturing Extension Partnership (MEP) DESCRIPTION: MEP is a 501(c) 3 non-profit corporation with an industry lead Board of Directors. Its mission is “to help New Mexico’s existing and emerging small and medium manufacturing enterprises strengthen their global competitiveness by extending advanced manufacturing methods, technology, training, marketing, business development, best practices and commercialization services to create economic benefit for the citizens of the State.” STRUCTURE: The MEP “Tool Box” includes: Management systems services. Industrial marketing services. Manufacturing processes services. Information technology services. People systems services. Lean enterprise solutions:

o Lean Enterprise allows manufacturers to produce more with existing resources by eliminating non-value-added activities; and

o Benefits of implementing Lean include increasing productivity up to 35% per year, reducing defects 20% per year, reducing delivery lead times by more than 70%, improving on-time delivery to almost 100%, and reducing inventory reduced by more than 75%.

People systems services. Other services include quick changeover/set-up reduction, transformation management, lean

performance measures, and coaching transformation. QUALIFICATIONS/CRITERIA:

For more, visit the home page at www.newmexicomep.org or call (505) 262-0921.

http://www.newmexicomep.org/

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PROGRAM: New Mexico Small Business Assistance Program (SBAP)

AGENCY: Environment Department, Air Quality Bureau DESCRIPTION: The primary purpose of the SBAP is to assist small businesses which are or will be subject to requirements under the federal 1990 Clean Air Act Amendments or New Mexico Air Quality Regulations. The goal of the SBAP is to help businesses comply through education and technical assistance, not enforcement. This is for a company that complies with what the Air Quality Bureau defines a "small business" in 20.2.75 NMAC. ELIGIBLE USES: The SBAP offers technical assistance through site visits/consultations, preliminary determinations of

emission types and amounts, SBAP library, a toll-free hotline, newsletters and fact sheets, pollution prevention information, an amnesty program, industry specific workshops, information about state and federal air quality requirements, help filling out forms, self-audit compliance checklists, and regulation updates.

QUALIFICATION CRITERIA/COMMENTS: Qualifying small businesses include those that:

o Are owned and operated by a person who employs 10 or fewer individuals; o Do not emit 50 tons or more per year of carbon monoxide, lead, nitrogen oxides, ozone, sulfur

oxides, particulate matter less than 10 micrometers in diameter or volatile organic compounds, or 75 tons per year of all regulated air contaminants for which there are national or New Mexico Ambient Air Quality Standards;

o Emit less than 10 tons per year of each hazardous air pollutant (HAP) listed by the United State Environmental Protection Agency (EPA);

o Emit less than 25 tons per year of all HAPs combined; and o For sources that satisfy the definition of "small business", the permit fee is reduced by 50%.

Because General Construction Permits (GCPs) issued by the Air Quality Bureau allow for up to 95 tons per year of certain regulated air contaminants, fee reduction does not apply to this type of permit.

The SBAP Amnesty Program provides qualifying small businesses relief from enforcement activities while the small business is making good faith efforts to meet air quality requirements.

The SBAP offers assistance to small businesses in New Mexico, with the exception of Bernalillo County and Tribal lands. The City of Albuquerque/Bernalillo Air Quality Assistance Program (AQAP) regulates businesses located in the County of Bernalillo and may be reached at (505) 768-1972. Business located on Tribal land do not fall under state or local jurisdiction.

For more information, visit http://www.nmenv.state.nm.us/aqb/sbap/ or call (505) 476-4300.

http://www.nmenv.state.nm.us/aqb/sbap/

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AGENCY: New Mexico Small Business Development Centers (NMSBDC) DESCRIPTION: The mission of the NMSBDC is to strengthen the economy of New Mexico by providing direct assistance, entrepreneurial education and resource linkages designed to facilitate the retention and expansion of existing small businesses, and the creation of new businesses. ELIGIBLE USES: Writing a business plan. Designing a marketing plan. Assembling a loan package or financing plan. Setting up a bookkeeping system. Using a computer for business applications. Analyzing financial statements. Doing business with the government. Entering global markets. Solving technical problems. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Provide free counseling, low-cost training, access to information

resources (libraries, computer data bases), computer training, referrals, etc. Fees: Minimal fees are charged for some services. QUALIFICATION CRITERIA/COMMENTS: There are centers located in 18 community colleges statewide and one located in Albuquerque's South

Valley. For more information, visit http://www.nmsbdc.org/ or call (800) 281-7232.

http://www.nmsbdc.org/

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AGENCY: New Mexico Technet

DESCRIPTION: Technet is an Albuquerque-based non-profit organization established to develop a state-of-the-art communications network linking major research laboratories, universities, government agencies and businesses throughout the state. ELIGIBLE USES: The network is designed to allow subscribing organizations and individuals access to a wide array of

data for research and other purposes. Information available on Technet includes:

o Electronic mail; o State, federal and local governments information; o Court information; o Technology transfer; o ZiaNet Library Network; o Nationwide and worldwide library connections; o Business directories; o Business opportunities; o Border trade information; o National Science Foundation Internet access; o University information; and o Special programs.

For more information, visit http://www.technet.nm.org/.

http://www.technet.nm.org/

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PROGRAM: New Mexico Workforce Connection

AGENCY: Office of Workforce Training and Development DESCRIPTION: The NM Workforce Connection is a system that is integrated and coordinated through the alignment of economic development, education and job training programs for the purpose of increasing employment, job retention and earnings of the citizens of New Mexico and competitiveness of the state’s economy. ELIGIBILITY: Target career clusters include: Arts and Entertainment. Information and Communication. Business Services. Energy and Environmental Technologies. Health and Biosciences. Engineering, Manufacturing and Construction. Hospitality and Tourism. STRUCTURE: The connection works to: Research the quality of the state’s labor supply. Operates One-Stop Career Centers. Provides business services including assistance:

o Hiring; o Screening potential employees; o Training current employees; o Retaining workers; and o Expanding business opportunities.

QUALIFICATIONS/CRITERIA: One service is the Career Readiness Certificate:

o A portable credential – national /regional /state; o A tool to improve workforce skills and employment opportunities; o Documents foundation skills necessary for workplace success; o Based on Work Keys assessments; o Initiated by OWTD – implementation planning driven by partnership of education, workforce,

and economic development; and o This Certificate provides a portable credential that demonstrates that an individual has achieved

the foundation skills necessary for success in the workplace. One service is the Career Readiness Certificate.

For more information, visit http://www.dws.state.nm.us/wc/ or call (505) 841-8405.

http://www.dws.state.nm.us/wc/

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PROGRAM: RD Cooperative Development Assistance Program AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Business-Cooperative Service (RBS) DESCRIPTION: The Cooperative Development Assistance Program helps rural residents form new cooperative businesses and improve the operations of existing cooperatives. ELIGIBLE USES: Technical assistance. Cooperative development assistance. Education and information. Statistics. Conduct cooperative-related research. Produce information products to promote public understanding of cooperatives. SERVICES: The Co-op Program also has some grants available. Assistance with initial feasibility studies, and the creation and implementation of a business plan. Visit the website at http://www.rurdev.usda.gov/rbs/.

http://www.rurdev.usda.gov/rbs/

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PROGRAM: RD Self-Help Technical Assistance Grant Program - Section 523

AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: RD Self Help provides grants for technical assistance in building low-income housing. ELIGIBLITY: Uses include technical assistance that will help very low- and low-income families build homes in rural areas by the self-help method. The program often pays a construction supervisor to supervise the families while they build their

homes. Section 523 Grant funds may not be used for the purchase of land or for actual construction costs. Eligible entities include: states or political subdivisions, public or private non-profit corporations,

and Indian Tribes. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Grants must have prior funding authorization from the National Office.

The term is two years. QUALIFICATION CRITERIA/COMMENTS: For more information, visit http://www.rurdev.usda.gov/rbs/.

http://www.rurdev.usda.gov/rbs/

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PROGRAM: New Mexico Small Business Assistance Program (NMSBA) AGENCY: Los Alamos & Sandia National Laboratories DESCRIPTION: The New Mexico Small Business Assistance Program solves small business challenges through national laboratory expertise. ELIGIBLE USES: Los Alamos and Sandia National Laboratory scientists and engineers provide technical assistance at

no cost to small businesses. Technical assistance may be provided on testing and design consultation. Access to special equipment or facilities may also be provided. QUALIFICATIONS/CRITERIA: Small businesses may request assistance anytime. Leveraged projects are considered once a year. Leveraged projects involve multiple businesses

seeking to collectively address a shared challenge. To qualify, a business must be certified as a New Mexico small business (generally less than 500

employees) and provide New Mexico tax identification. Applicants will be expected to:

o Explain the problem faced by the small business; o What expertise NMSBA offers that can’t be found in the private sector at a reasonable

cost; and o The expected benefit to the participating small business.

For more information visit the website at http://www.nmsbaprogram.org/ or call Los Alamos National Laboratory at (505) 667-1710 or Sandia National Laboratory at (505) 844-9623.

http://www.nmsbaprogram.org/

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PROGRAM: Santa Fe Community Loan Fund

AGENCY: Enchantment Land Certified Development Company (ELCDC) DESCRIPTION: The ELCDC provides free, personalized pre-loan and post-loan advice and training to borrowers. ELIGIBLE USES: The fund’s training and technical services include, but are not limited to: Small Businesses:

o Developing business plans; o Financial planning and analysis; o Completing the Loan Fund's application; o Marketing planning and promotion; o Record keeping and accounting systems; and o Legal and tax referrals.

Non-profit organizations: o Board development; o Organizational development; o Systems management; o Strategic planning; o Program planning; o Filing for non-profit status; o Referrals and resources; and o Benefits management planning.

The Loan Fund also has funds to lend/guarantee ($5,000 to $100,000) to for-profit small businesses and corporations as well as non-profits, has services for borrowers.

QUALIFICATION CRITERIA/COMMENTS: Call (505) 843-9232.

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PROGRAM: SBA Service Corps of Retired Executives (SCORE) AGENCY: Small Business Administration (SBA) DESCRIPTION: SCORE is a volunteer program sponsored by the SBA. The program matches volunteers with small business owners who need advice. ELIGIBLE USES:

In-depth counseling and training in a variety of subjects is provided to existing businesses, including: o Identification of basic management problems; o Review of distribution channels; o Expansion evaluation; o Modification of products; and o Other business challenges.

Consultation and counseling may also be provided to prospective business owners. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Most SCORE volunteers are retired. They possess a variety of

management and technical skills. Counselor's offer individual counseling for the purpose of analyzing and defining business problems and finding solutions.

Fees: Nominal fees for training programs. No fees for counseling. QUALIFICATION CRITERIA/COMMENTS: The approach is confidential and person-to-person. Business owners do not have to have an SBA loan to participate. For more on SCORE, http://www.score.org/explore_score.html, homepage at

http://www.sba.gov/starting_business/index.html, or call (800) 659-2955.

http://www.score.org/explore_score.html


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AGENCY: Space Alliance Technology Outreach Program DESCRIPTION: The Space Alliance Technology Outreach Program provides a free service designed to speed the transfer of space technology to the private sector by assisting small businesses facing technical challenges. ELIGIBILITY: Businesses include but are not limited to consumer goods, technology, manufacturing, distribution, safety and protection, electrical, transportation and more. STRUCTURE: A Request for Technical Assistance (RTA) can be accepted from a small business, an entrepreneur,

an inventor or any other general organization (public, not-for-profit, etc.). The RTA must have a distinct and identifiable problem. For each request, the technical problem must appear to be solvable in the 40-hour time allotment. For non-developed products, the company requesting must have a prototype or specific drawings. PROCESS: A company submits a request for Technical Assistance (RTA) submitted to SATOP which is then

evaluated. SATOP Partners distribute RTA’S to technical contacts who determine their level of assistance. SATOP Partners contact requestor and provide up to 40 hours of assistance. The partner informs

SATOP when the project is complete. Most requests are fulfilled within 90 days. QUALIFICATIONS/CRITERIA: An RTA cannot be accepted from a company or business outside of the United States. The requester cannot seek technical assistance if the solution can be provided by existing products,

technologies and services. For more information, visit www.spacetechsolutions.com, [email protected], or call

(505) 428-7762.

http://www.spacetechsolutions.com/


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PROGRAM: Technology Transfer

AGENCY: Los Alamos National Laboratory, Phillips Laboratory, Sandia National Laboratory and University of New Mexico (UNM) DESCRIPTION: Technology transfer is now a mission of all Department of Energy Laboratories. The labs and UNM have expressed their eagerness and ability to develop cooperative agreements with industry. ELIGIBLE USES: Through mutually beneficial agreements, business owners may access:

o Facilities; o Proprietary intellectual property through government waivers, licensing, and cooperative research

and development agreements; o Joint and cooperative research and development; o Personnel exchanges; o Consulting agreements; individual and institutional; o Informal, short-term advice and problem solving; o On and off-site training seminars and colloquy; and o Participation with the extensive and active chapters of scientific engineering and professional

associations. FURTHER INFORMATION ON TECHNOLOGY TRANSFER: Los Alamos National Laboratories http://www.lanl.gov/opportunities/. Sandia National Laboratories http://www.sandia.gov/bus-ops/index.html. Philips Laboratory http://www.afrl.af.mil/xp_xptt_home_page.asp. University of New Mexico http://stc.unm.edu/.

http://www.lanl.gov/opportunities/

http://www.sandia.gov/bus-ops/index.html

http://www.afrl.af.mil/xp_xptt_home_page.asp

http://stc.unm.edu/

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AGENCY: UNM Bureau of Business and Economic Research (BBER), University of New Mexico

DESCRIPTION: Provides research and information services for businesses and economic development organizations. BBER maintains a socioeconomic data bank and serves as a repository for U.S. Census Bureau data. ELIGIBLE USES: Types of data available include:

o Data Bank; o UNM Economic Forecasting Service; o Contract Research Demography; o Econometrics/forecasting; o Population studies; o Regional economics; o Statistics; and o Taxes and taxation.

PROGRAM/LOAN STRUCTURE: Fees: A minimal fee may be charged for some services. Visit the website at http://bber.unm.edu/ or call (505) 277-2216.

http://bber.unm.edu/

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AGENCY: Utility Companies

DESCRIPTION: Because a healthy business environment is important to utility companies, most have business development specialists on staff. ELIGIBLE USES: Most utility companies provide rate incentives to their industrial users. In addition, most utility companies provide referrals to:

o Sources of financing and incentives; o Information on state licenses, applications, permits and other requirements; and o Information on applicable taxes.

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PROGRAM: Wal-Mart Stores, Inc., Minority and Women-Owned Business Vendor Program

AGENCY: National Minority Suppliers Development Council (NMSDC) or Small Business Administration (SBA) DESCRIPTION: The primary objective of the National Minority Supplier Development Council is to provide a direct link between corporate America and minority-owned businesses. The Minority and Women-Owned Business Vendor-Partner Program facilitates the process of providing goods and services for sale in Wal-Mart, Sam’s Club, and McLane Company stores. PROGRAMS AND SERVICES: Certification of minority business enterprises (Asian, Black, Hispanic and Native American) after

screening, interviews and site visits. MBISYS®, a national computerized database of more than 15,000 certified minority suppliers. Referrals to corporate buyers of minority suppliers capable of providing quality goods and services at

competitive prices, and in a timely fashion. Working capital loans and access to specialized financing to certified minority businesses which have

supplier / vendor relationships with NMSDC national and regional corporate members, through the Business Consortium Fund, as well as longer-term financing through Triad Capital Corporation, the BCFs Specialized Small Business Investment Company (SSBIC), and professional consulting services through BCF Business and Financial Advisory Services, Inc.

Educational seminars, training and technical assistance for buyers and suppliers to assist in personal and professional growth.

Advanced Management Education Program, customized executive education, with highly intensive training and technical assistance for CEOs of minority-owned firms.

Networking opportunities, organized by purchasing categories, at which suppliers speak directly to appropriate purchasing agents.

QUALIFICATION CRITERIA/COMMENTS: Minority and women-owned businesses must be certified to participate by nationally certified

agencies such as the National Minority Suppliers Development Council or the Small Business Administration (8A) Program. Certification requires at least 51% minority or female ownership, control or operation.

Price structure, product competitiveness, deliverability, lead time, packaging/labeling, and quality assurance and testing are considered when selecting new goods and services:

In addition, the prospective vendor-partner must: o Be financially sound; o Be willing to enter into a legal agreement with Wal-Mart; o Meet insurance requirements; and o Become a member of the Universal Product Code Council.

Visit the homepage at http://howtosellyourproducttowalmart.com/walmartlocalvendorprogram.htm.

http://howtosellyourproducttowalmart.com/walmartlocalvendorprogram.htm

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AGENCY: Women's Economic Self-Sufficiency Team (WESST)

DESCRIPTION: WESST is a non-profit organization whose purpose is to help create economic security by reducing the risks of starting and owning a business. ELIGIBLE USES: WESST will assist a business owner in:

o Assessing new business ideas; o Determining financial options; o Pricing products and services; o Developing market research; o Developing effective sales strategies; and o Building income and cash flow projections.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: WESST offers its clients three core programs:

o Business Consulting Series which consists of individual consultations that mentor a client through planning and growing a business in areas such as finance, marketing and management;

o Entrepreneurial Program which offers small group workshops on basic business topics; and o Financial Assistance Program which consists of a revolving loan fund designed to lend small

amounts of money to qualified clients unable to obtain financing through conventional sources. WESST also assists clients to access financing through other sources.

Fees: Sliding scale fee for all services. QUALIFICATION CRITERIA/COMMENTS: WESST serves anyone who is exploring a business idea or who seeks assistance growing an existing

business. The primary focus is on low-income, unemployed and underemployed women, and people of color

throughout New Mexico. A loan of up to $50,000 may be available to:

o Those who receive regular assistance from WESST, both before and after the loan is extended; o Those who develop a business plan with the assistance of WESST business consulting service; o Those able to present a final loan package to the Loan Fund Committee; and o Those willing to submit financial statements to WESST on a regular basis.

Visit the homepage at http://www.wesst.org/, http://www.wesst.org/services/services.html, or call (800) GO-WESST.

http://www.wesst.org/

http://www.wesst.org/services/services.html

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PROGRAM: Workforce Training Center

AGENCY: Albuquerque Technical Vocational Institute (TVI) DESCRIPTION: The Workforce Training Center provides innovative, customized training, skill development, and business consulting of the highest quality in order to foster and enhance economic development in New Mexico. The Workforce Training Center at TVI is dedicated to helping businesses, professional organizations and government agencies develop and deliver programs that increase productivity and profitability. Through ongoing collaboration, they are able to design a program to meet your specific needs. ELIGIBLE USES: Customized training. Job profiling. Employee assessment. Small business development. RESOURCES: Computer labs (open to the public). CURRICULA INCLUDE: Arts and sciences. Business occupations. Adult and developmental education. Training for health occupations. Technology. Trades and services. PROGRAM/LOAN STRUCTURE: The Workforce Training Center works closely with the business client to identify training needs and

to develop the appropriate curriculum. Customized as well as pre-designed training is offered both on-site or at the TVI campus. Visit the website at http://www.hotfrog.com/Companies/Tvi-Workforce-Training-Center or call

(505) 224-5220.

http://www.hotfrog.com/Companies/Tvi-Workforce-Training-Center

8: Maturity Linked Funding


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Maturity Linked Funding

DESCRIPTION: Maturity linked funding provides a lender with a source of funds for a length of time that matches the

maturity of the qualifying loan. FUNCTION: By providing lenders with a longer term source of funds at a fixed rate, maturity linked funds often

make longer term, fixed rate financing possible. In times of heavy loan demand, maturity linked funds ensure a source of available loan funds. QUALIFICATION AND USE CRITERIA: The project must produce public benefits such as creating or retaining jobs. Loan proceeds must be used for specific eligible purposes such as fixed asset financing, working

capital, etc. Interest rate caps may apply, usually in the form of limits on markups over the cost of the funds. PROGRAM STRUCTURE: Rules pertaining to jobs created, etc. usually define funding limits. Maturity linked funding programs often involve an interest rate subsidy. Maturity linked funds can generally be used with other enhancements.

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PROGRAM: Farmer Mac Programs

AGENCY: Federal Agricultural Mortgage Corporation (Farmer Mac) DESCRIPTION: Farmer Mac is America’s secondary market for first mortgage agricultural real estate loans. Farmer Mac was created by Congress to improve the availability of long-term credit at stable interest

rates to America's farmers, ranchers and rural homeowners, businesses and communities. Farmer Mac accomplishes its public policy mission primarily by purchasing, or committing to

purchase, qualified loans from agricultural mortgage lenders, thereby replenishing their source of funds to make new loans.

QUALIFICATION CRITERIA/COMMENTS: Farmer Mac has services available for:

o Borrowers at http://www.farmermac.com/Borrowers/Full_time_Farm/Program_Desc/fulltime_main.asp;

o Lenders at http://www.farmermac.com/Lenders/Program_Desc/fmac_main.asp; and o Investors at, http://www.farmermac.com/Investors/FMI/fm1_main.asp.

http://www.farmermac.com/Borrowers/Full_time_Farm/Program_Desc/fulltime_main.asp

http://www.farmermac.com/Lenders/Program_Desc/fmac_main.asp

http://www.farmermac.com/Investors/FMI/fm1_main.asp

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PROGRAM: Ginnie Mae Programs AGENCY: Government National Mortgage Association (Ginnie Mae or GNMA) DESCRIPTION: Ginnie Mae makes affordable housing a reality for millions of low- and moderate-income households across America by channeling capital into the nation's housing markets. ELIGIBLE USES: The Ginnie Mae guaranty allows mortgage lenders to obtain a better price for mortgage loans in the

secondary market. Lenders can then use the proceeds to make new mortgage loans available. Ginnie Mae guarantees investors the timely payment of principal and interest on federally insured or

guaranteed loans, mainly loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

Other guarantors or issuers of loans eligible as collateral for Ginnie Mae include the Department of Agriculture's Rural Housing Service (RHS) and the Department of Housing and Urban Development's Office of Public and Indian Housing (PIH).

CONTACT INFORMATION: For more information on Ginnie Mae, visit http://www.ginniemae.gov/ or call (202) 708-1535.

http://www.ginniemae.gov/

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PROGRAM: Purchase of SBA/RD/BIA Guarantee Obligations

AGENCY: New Mexico State Investment Council (SIC) DESCRIPTION: Severance Tax Permanent Fund (STPF) investment in the U.S. government guaranteed portion of business and/or agriculture loans by financial institutions. ELIGIBLE USES: The STPF serves as a secondary market. Loan proceeds may be used to:

o Purchase land; o Purchase and/or construction of buildings; o Purchase of machinery and/or equipment; and o Working capital.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The borrower receives a fixed interest rate. Maturities: The loan amortization/maturity periods are limited to five, seven, 10, 15, 20 and 25 years. Rates: The yield from the investment is set at the yield of the Planned Amortized Class (PAC) of

collateralized Mortgage Obligations (CMO's) guaranteed by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC) of comparable maturity.

Fees: The cost of funds to the borrower is the rate shown under "rates" above plus 1.5%. QUALIFICATION CRITERIA/COMMENTS: Upon approval of a loan by the SBA/RD/BIA, the originating financial institution desiring to sell the

loan should contact the SIC by telephone or in writing to request a commitment. Each request for a commitment must include the following information:

SBA GP number or RD case number; Maximum amount the loan is approved for; Loan maturity; Guarantee portion of the loan as a percent to be purchased by the SIC; Nature of the loan; and Commitment period.

Visit www.sic.state.nm.us.

http://www.sic.state.nm.us/

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PROGRAM: Real Property-Related Business Loan Participations

AGENCY: New Mexico State Investment Council (SIC)

DESCRIPTION: Often referred to as the "Oregon Plan". The Severance Tax Permanent Fund (STPF) may be invested in participations of real estate loans made by financial institutions. ELIGIBLE USES: Loan proceeds may be used:

Purchase land and attached buildings; and Refinance existing debt if the loan is for expansion purposes.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The program allows up to an 80% participation in loans between

$500,000 and $2 million. The minimum loan amount may be met by packaging up to five separate loans. Maturities: Not less than five years or more than 15 years. Rates: Fixed for five years and adjusted at every fifth anniversary. QUALIFICATION CRITERIA/COMMENTS: Visit www.sic.state.nm.us.

http://www.sic.state.nm.us/

9: Community AssistAnCe


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Community Assistance

DESCRIPTION: This section includes initiatives and programs available to communities to promote community and

economic development. QUALIFICATION AND USE CRITERIA: These initiatives and programs are designed to help communities attract, create and retain economic

base jobs.

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PROGRAM: Aviation Funding Program AGENCY: Transportation Department, Aviation Division DESCRIPTION: The purpose of the New Mexico Aviation Funding Program is to assist communities financially with their airport facilities. ELIGIBLE USE: Funding may be used to:

o Construct new facilities; o Improve existing facilities; or o Maintain existing facilities.

PROGRAM/LOAN STRUCTURE: Financial assistance is provided through a combination of:

o 95% Federal Aviation Administration funds; o 2.5% New Mexico aviation program funds; and o 2.5% community funds, if possible.

QUALIFICATION CRITERIA/COMMENTS: The Aviation Division facilitates the application process through the Federal Aviation Administration

on behalf of a community. Funds are dispersed based on the needs of an aviation facility and the states fiscal budget beginning in

July of each year. Visit the Aviation Division’s webpage at http://nmshtd.state.nm.us/main.asp?secid=10871 or call

(505) 244-1788.

http://nmshtd.state.nm.us/main.asp?secid=10871

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PROGRAM: Business Improvement District

AGENCY: New Mexico incorporated municipalities and counties DESCRIPTION: A Business Improvement District is a special taxing district implemented to generate revenue for infrastructure improvements necessary for economic development projects. PROGRAM/LOAN STRUCTURE: Local governments are empowered to create a Business Improvement District. In some cases local

residents must ratify the creation. Generally, bonds are issued to pay for infrastructure development and taxes are increased to pay off the bonds. Affected voters must approve the issuance of the bonds and the imposition of the tax.

QUALIFICATION CRITERIA/COMMENTS: A Business Improvement District may be created pursuant to the Business Improvement District Act

(3-63-1 to 3-63-16 NMSA 1978).

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PROGRAM: Certified Communities Initiative (CCI)

AGENCY: Community Development Team, Economic Development Division, NMEDD ELIGIBILITY: The initiative rewards any New Mexican community that can demonstrate broad local, involvement, wishes to empower its citizens, wishes to build on existing resources, and wishes to expand its capacity to facilitate economic growth. The definition of community as referenced in the CCI includes municipalities, counties, federally recognized Indian Tribes, as well as unincorporated municipalities. DESCRIPTION: CCI’s objective is to facilitate the recruitment, retention and expansion, or creation of economic-base jobs. The Certified Communities Initiative (CCI) encourages and supports New Mexico communities in their efforts to create new jobs STRUCTURE: Regional Representatives from NMEDD will assist communities with their applications. Secondary educational institutions can identify local workforce strengths and weaknesses, and

develop training programs consistent with targeted industries. Mandatory Requirements (Nine):

o Establish a local economic development organization; o Develop a three-year community business plan; o Develop a land and building inventory; o Develop a Retention/Expansion Program; o Adopt the Local Economic Development Act (LEDA) or Native American Economic

Development Ordinance; o Complete a Community Profile; o Develop a marketing plan; o Create and maintain a website that will be linked to the Department’s website; and o Attend mandatory Local Economic Development Act (LEDA) and Potential Recruitment

Opportunity (PRO) training. Elective Requirements (At least Two):

o Pass the Local Options Gross Receipts Tax; o Designate industrial park(s); o Establish a business incubator; o Develop a professional site selection proposal (fact book); o Develop a local incentive package; o Establish a fast track development process; o Develop a workforce inventory; or o Identify local workforce development programs.

CCI communities can expect to receive the following benefits: o Contractual funding of up to $5,000 per year for three years for special projects tied to the three

year business and /or marketing plan such as workforce study, grant writer, aerial photographs, economic development impact analysis, etc., training expenses, and recognition: - Award ceremony, media exposure, recognition in NMEDD marketing materials, recognition

on NMEDD web site, recognition on NMEDD trade show booth display, and a plaque and official certification document for display.

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QUALIFICATIONS/CRITERIA: Completed applications must be received at NMEDD by a yearly deadline. Communities are certified through a competitive process. Certification expires after three years; a community may apply for re-certification a year later. Economic-base jobs are those created by businesses that export a percentage of their products or

services outside the State of New Mexico. Economic-base businesses include, but are not limited to:

o Agriculture - food processing, food packaging, distribution; o Automotive - component manufacturing, sub-assembly, distribution; o Aviation - component manufacturing, sub-assembly, distribution; o Call Centers - inbound and technical support, back office; and o High Technology - research and development, manufacturing.

Applications are available on the NMEDD website at www.goNM.biz and are to be returned to NMEDD by the yearly deadline, Mail to: CCI Program Attn: Steven Gonzales, 1100 St. Francis Drive, Joseph M. Montoya Bldg. Santa Fe, NM 87505, Ph:(505) 827-2642.

Visit the economic development homepage at www.edd.state.nm.us or call (505) 827-0300, (800) 374-3061.

http://www.gonm.biz/


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PROGRAM: Community Adjustment and Investment Program AGENCY: North American Development Bank (NADBank). DESCRIPTION: The Community Adjustment and Investment Program was created in connection with the passage of the North American Free Trade Agreement (NAFTA) to provide credit to new or expanding businesses in communities with significant job losses due to changes in trade patterns with Canada and Mexico. The program will combine the efforts of NADBank, federal agencies, local financial institutions and financing intermediaries. ELIGIBLE USE: Assists where shortfalls exist in capital availability in commercial lending markets for start-up or

expansion efforts within communities that have experienced significant job losses. Available for commercial projects that create new private sector jobs. There is a partial county eligibility option for counties in which only a part is experiencing negative

effects of NAFTA. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: NADBank financing is limited to loans, guarantees and loss reserve

funds. Borrowers must provide evidence that the desired credit is unavailable from other sources. There is also money set aside for a grant program. As of December 19, 2005, the allowable cost per job created is $50,000. Equity: At least 50% from other sources. Maturities, Rates, and Fees: Reasonable; based on the source of financing. QUALIFICATION CRITERIA/COMMENTS: Applicants must provide information that demonstrates significant economic impact within the

community: o Evidence of significant job losses associated with the passage of NAFTA. This means 300 or

more NAFTA related job losses for a rural area and 500 or more for an urban area; and o Evidence that the community has not adjusted to the job losses through the existence of other

employment opportunities. For more information, visit http://www.nadbank-caip.org/. Also, visit http://www.nadbank.org/english/program_service/program_frame.htm for an exhaustive

list of all the programs NADBank has to offer.

http://www.nadbank-caip.org/

http://www.nadbank.org/english/program_service/program_frame.htm

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PROGRAM: Community Development Incentive Act AGENCY: New Mexico incorporated municipalities and counties DESCRIPTION: The governing body of a county or a municipality may, by a majority vote of the elected members, adopt a resolution exempting commercial personal property of a new business facility located in the county or municipality from the imposition of any property tax on commercial personal property authorized to be imposed by the respective governing body. QUALIFICATIONS/CRITERIA: The exemption authorized by 3-64-3A NMSA of this section may be for up to 100% of the value for

property taxation purposes of the property exempted. The exemption may not exceed more than 20 years. For definitions see 3-64-2 NMSA.

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PROGRAM: Community Development Programs AGENCY: Economic Development Department (EDD), Economic Development Division DESCRIPTION: The Role of the Rural, Business & Community Economic Development (RBCED) Team is to

facilitate economic growth. The RBCED Team is part of the Economic Development Division. The key programs for Community Development are: MainStreet, Native American Liaison, Land Grants, and Regional Representatives.

STRUCTURE: MainStreet fosters economic development in New Mexico by supporting local MainStreet downtown

revitalization organizations. The Program provides resources, education, training and services that preserve local historic culture and heritage and stimulate the economic vitality of each participating community. Contact Director Rich Williams

Native American Liaison provides partnering opportunities by NMEDD with Pueblos and Tribal Nations focusing on workforce development, infrastructure, information technology, identifying barriers to economic development, adapt existing EDD programs for Tribes & Pueblos, and creating new EDD programs. Contact Native American Liaison Jerry Sandoval

Land Grants o Working with historic Land Grant communities to identify appropriate development strategies to

provide workshops, trainings, technical, and support advocacy. Contact Community Development Team Leader Steve Gonzales

Regional Representatives were created by the State Legislature to support communities with their community/economic development initiatives. There are currently seven regional representatives. See below for contact information.

GOALS: o Access resources to retain and grow the number of sustainable jobs; o Assist communities to create infrastructure and capacity that result in job retention and growth;

and o Build strong collaboration with local and regional economic developers.

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To Reach Your Regional Representative,

Contact the Economic Development Department Economic Development Division

Rural, Business & Community Development Team 1100 St. Francis Dr.

Joseph M. Montoya Bldg. Santa Fe, N.M. 87505

(505)-827-0300 www.goNM.biz

Or…

Region 1 (McKinley, Cibola and Socorro

Counties) Contact Tim Hagaman

[email protected] (505) 862-2322

Region 2 (Los Alamos, Rio Arriba and Taos

Counties) Contact Steve Gonzalez


Region 3 (Bernalillo, Guadalupe, Torrance

and Valencia Counties and Rio Rancho) Contact Kathy McCormick


Region 4 (Colfax, Harding, Mora, San

Miguel and Union Counties) Contact Antoinette Vigil


Region 5 (San Juan, Sandoval and Santa Fe Counties)

Contact Nancy Baker [email protected]

(505) 827-0228

Region 6 (Chaves, Curry, De Baca, Eddy, Lea, Roosevelt, and Quay Counties)

Contact Mark Roper [email protected]

(575) 624-7038

Region 7 & 8 (Catron, Dona Ana, Grant, Hidalgo, Lincoln, Luna, Otero, Sierra and

Socorro Counties) Contact Steven Montano


Native American Communities Liaison

Contact Jerry Sandoval [email protected]

(505) 827-0230

Program Manager

Contact Tanya Ortiz [email protected]

(505) 827-1699










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PROGRAM: Efficient Use of Energy Act

AGENCY: Commission on Energy Efficiency and Load Management Programs DESCRIPTION: This Act encourages utility investment in energy efficiency and load management programs by allowing public utilities recovery of reasonable and prudently incurred expenses for such programs in an expedited manner. STRUCTURE: Before the Commission approves an energy efficiency and load management program for a public

utility, it must find that the portfolio of programs is cost-effective and designed to provide every affected customer class with the opportunity to participate and benefit economically.

Public utilities must obtain Commission approval of energy efficiency and load management programs before they are implemented. The Commission will identify any disincentives or barriers that may exist for public utility expenditures on energy efficient and load management and, if found, ensure that they are eliminated so public utilities are financially neutral in their preference for acquiring demand or supply-side utility resources.

A public utility that undertakes cost-effective energy efficiency and load management programs will recover the costs of all the programs implemented after the effective date of the Efficient Use of Energy Act through an approved tariff rider.

The Commission will ensure there are no cross- subsidies between a public utility’s energy efficiency and load management activities and the public utility’s supply-side activities and that the tariff rider does not permit an excessive rate of return.

A large customer can receive approval for a credit expenditures at its facilities on and after January 1, 2005. Approval will be granted to those who demonstrate the reasonable satisfaction of the utility or self-direct program administrator that its expenditures are cost-effective.

The credit may be used to offset up to 70% of the tariff rider until the credit is exhausted. A large customer can be exempted from paying 70% of the tariff rider if the customer demonstrates

the reasonable satisfaction of the utility program administrator that it has exhausted all cost-effective energy efficiency measures at its facility.

QUALIFICATIONS/CRITERIA: A large customer is a utility customer at a single, contiguous field, location or facility, regardless of

the number of meters with electricity consumption greater than 7,000 megawatt-hours per year or natural gas use greater than 360,000 decatherms per year.

To be cost effective, the Commission applies the total resource cost test. This test is a standard that is met if on a life-cycle basis the avoided supply-side monetary costs are greater than the monetary costs of the demand-side programs borne by both the utility and the participants.

The tariff rider for any utility customer will not exceed the lower of 1.5% of the customer’s bill or $75,000 per year except upon application by application as follows: o With the advice and consent of the entity designated by law to represent residential and

commercial utility customers, the Commission may approve a tariff rider in excess of the above specifications for a large or other than large customer that consents.

See SB 644 2005. Visit the Energy, Minerals, and Natural Resources Department’s homepage at

http://www.emnrd.state.nm.us/EMNRD/MAIN/index.htm, or call (505) 476-3200.


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PROGRAM: Environment Department Programs AGENCY: Construction Programs Bureau, New Mexico Environment Department DESCRIPTION: The Bureau has money to lend as part of its mission to protect human health and the environment via its administration of drinking water and wastewater projects. ELIGIBILITY: Eligible public entities include municipalities, counties, special districts, Indian Tribes, and mutual domestic associations (Incorporated under the Sanitary Projects Act). Eligible projects for the Special Appropriations Program include facility plans and environmental

reviews, engineering design, construction, modification, and rehabilitation of wastewater collection and treatment facilities, redevelopment of contaminated sites (Brownfields) to protect groundwater, storm water management facilities to protect water quality, non-point source pollution abatement, and landfill closures and other modifications that protect groundwater.

Eligible projects for the Revolving Loan Funds include, but are not limited to, the construction of wells, storage tanks, distribution systems, water treatment facilities, wastewater treatment facilities, and related equipment. Eligible Expenses include engineering services, preliminary engineering and feasibility reports, acquisition of easements, rights-of-way, water rights, construction costs, purchase of equipment, and related legal costs.

STRUCTURE: The Bureau finances low interest loans and grants, works with other agencies to obtain full funding

for projects, assists communities with preparation of financial forms, monitors and administers obligated State and federal funds.

The Bureau reviews engineering reports for feasibility, reviews construction plans and specifications, assists communities with the preparation of requests for proposal and construction bids, monitors construction, and approves reimbursements.

The Bureau administers: o Special Appropriations Program

- New Mexico Legislature provides grants through special appropriations for water and wastewater projects; approved by the Governor; typically funded by General Fund appropriations or by proceeds generated by the sale of Severance Tax Bonds (STB).

o Clean Water State Revolving Fund Program - Loan program funded by U.S. Environmental Protection Agency (80%) and State match

(20%); appropriated through Legislature; maximum loan term of 20 years, base interest rate is 3%, (0% to 3% available to eligible communities below median household income criteria); loan is not executed until environmental review is complete; first loan payment is due one year after completion of project; payments due in annual installments.

o Rural Infrastructure Revolving Loan Program - Maximum term of 20 years; 3% fixed interest rate; maximum loan amount of $500,000;

funding typically available within four-six weeks after completed application; first payment due one year after completion of project; payments are due in annual installments.

o EPA State and Tribal (STAG) Grants also available. QUALIFICATIONS/CRITERIA: STB grantees are required to certify need for issuance of bonds. Formal agreement is required between the community and the NMED (currently limited to four

years). Administrative requirements include engineering reports, plan specifications, bid tabulations, and

reimbursements. STB projects are restricted to two disbursement periods per month. Visit the homepage at www.edd.state.nm.us or http://www.nmenv.state.nm.us/cpb/cpbtop.html.


http://www.nmenv.state.nm.us/cpb/cpbtop.html

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PROGRAM: Industrial Revenue Bonds (IRBs)

AGENCY: New Mexico incorporated municipalities and counties DESCRIPTION: Pursuant to the Industrial Revenue Bond Act, New Mexico municipalities and counties are authorized to issue IRBs to stimulate the expansion and relocation of commercial and industrial projects in the state. ELIGIBLE USE: IRB financing for land, buildings and equipment is available for:

o Headquarter office buildings; o Warehouses; o Manufacturing facilities; o Service-oriented facilities not primarily engaged in the sale of goods and commodities at retail; o A 501(c)3 non-profit organization; and o All expenses, attorneys’, engineering and architects' fees, premiums and commissions deemed

necessary. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: IRB financed projects are exempt from ad valorem tax for as long as

the bonds are outstanding and title to the project is held by the issuing agency New Mexico law exempts governmental agencies from paying property taxes. The IRB financing

mechanism provides for an installment sales agreement or lease agreement whereby the issuer acquires the project and then sells or leases the project to the business. At the end of the installment sale or lease, the project is conveyed by the issuer to the business. For exemptions see 4-59-12 NMSA.

Bonds may be issued in different series with variable principal amounts, interest rates and maturities to accommodate the acquisition of assets with different useful lives.

The State Investment Council’s direct investments in New Mexico companies may represent no more than 51% of the investment capital in a business and must be made in conjunction with one or more qualified co-investors.

QUALIFICATION CRITERIA/COMMENTS: The municipality or county must approve the project and introduce an inducement resolution. The issuing agency is not responsible for the indebtedness; it serves only as a conduit to the

financing. In addition to a property tax exemption, personal property in facilities financed with IRBs is exempt

from gross receipts and compensating tax. IRBs may be taxable or tax free. Tax free lRBs only apply to manufacturing facilities and must meet

certain tests set out by the Internal Revenue Service. The State Investment Council may also make equity and /or debt investments directly in New Mexico

businesses. See 4-59 et. al. NMSA. For more information, visit http://legis.state.nm.us/lcs/ or call your local government office.

http://legis.state.nm.us/lcs/

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TEN BASIC STEPS IN THE NEW MEXICO “TAXABLE” IRB PROCESS (Brownstein, Hyatt Farber):

1. The company identifies a site in the city or with in 15 miles from the city limits and the company “ties up” the site; this is usually done through option or purchase contract subject to future IRB issuance by the city.

2. The company meets with city and state officials, and economic development groups seeking information, support, cooperation, and identification of potential concerns.

3. The company identifies a purchaser for the proposed bonds. This may simply be an affiliate of the company where the company has sufficient corporate funds to finance the project.

4. The company prepares a project description, including construction or expansion details, site plan, proposed use, zoning, utility, and environmental matters, potential new employment, and existing completion, if any.

5. A package is then submitted to the local city development commission of finance committee containing the project description as indicated in paragraph 4 above, and financial information concerning the company.

6. The local city development commission or finance committee holds a public hearing after notice is given, and makes a recommendation that the city should issue the IRB.

7. The company finds a councilor (usually the councilor for the district the project will be located in) to sponsor and introduce an inducement resolution in the city council. The city council may refer the resolution to the finance committee of the city for a recommendation before taking action. The inducement resolution expresses the intent of the city to issue the bonds, but does not legally commit the city to do so.

8. Upon passage of an inducement resolution, bond counsel working with counsel to the city and the company prepares a bond resolution for adoption by the city council. Upon introduction in the city council, the resolution may be referred to the finance committee or may be set for a hearing by the full city council.

9. Upon passage of the bond resolution, closing documents are completed. These include (i) an assignment of the interest of the company in the site and any construction contracts to the city; (ii) a lease of the site back to the company with the obligation of the company to pay rentals equal to the debt service on the bonds and the obligation of the company to pay all other expenses relating to the project; (iii) a trustee indenture and mortgage whereby the city assigns to the trustee as collateral for the bonds the interest of the city in the project and lease; (iv) a contract from the bond purchaser to purchase the bonds from the city; (v) bond counsel’s.

10. At closing, (i) the bond purchaser busy the bonds; (II) the bond proceeds are delivered to the trustee; (iii) the trustee sues the bond proceeds to pay the remaining acquisition costs of the site, to reimburse the company for previously incurred site and project costs, to pay costs of issuance of the bonds, and to pay construction costs and equipment purchases in connection with the construction of the project; (iv) title to the state is transferred to the city; (v) the lese with the company is signed; (vi) the site and lease are pledged to the trustee; and (vii) closing documents are exchanged.

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PROGRAM: Local Economic Development Act (LEDA)

AGENCY: New Mexico incorporated municipalities and counties DESCRIPTION: The Local Economic Development Act allows communities the option of offering local government aid to qualifying business entities for economic development projects. STRUCTURE: One of LEDA’s advantages is that it allows municipalities and counties to enter into joint powers

agreements to plan and support regional economic development projects. The source of public money used to fund economic development projects can come from up to 5% of

the annual General Fund (GF) expenditures of the local government in that fiscal year. New revenue can be generated through the imposition of the Local Options Gross Receipts Tax

(LOGRT) specifically designed for economic development projects. Local government revenues dedicated for funding economic development projects are deposited into

a separate account. Separate accounts for each individual project are also established. After a local government creates and adopts an economic development plan, a qualifying entity is

required to submit a project application including all information the local government deems necessary. o Projects are approved by ordinance, and the local government may negotiate with a qualifying

business on the type or amount of assistance that will be provided for the economic development project; and

o The local government also has the power to enact an ordinance terminating the economic development plan and any projects, but only if the ordinance satisfies existing contracts and the rights of the parties arising from those contracts.

QUALIFICATIONS/CRITERIA: Economic development projects must create new job opportunities and result in facilities to support

new or expanding businesses. Development plans or ordinances adopting plans must include safeguards including specific ways

local government will recover costs, land, buildings, or other thing of value if the business quits, leaves area, or otherwise fails to live up to contractual or implied obligations.

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PROGRAM: Local Options Gross Receipts Tax (LOGRT)

AGENCY: New Mexico incorporated municipalities and counties ELIGIBILITY: Communities that have already passed the Local Economic Development Act (LEDA) are able to pass a LOGRT. STRUCTURE: The community votes to raise its LOGRT. The rate is set at 1/8 of 1%. Revenue must be used for economic development projects. The LEDA - LOGRT allows communities the option of designating two of its four increments of the

MIGR for economic development plans, payment of bonds, and infrastructure improvement. In the event a community passes a LEDA and allocates 5% of the General Fund for economic

development, LOGRT provides the community with a source of additional revenue to completely fund the economic development project.

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PROGRAM: MainStreet Program

AGENCY: Economic Development Department (EDD), Economic Development Division DESCRIPTION: MainStreet provides technical assistance, services and resources to its affiliated non-profit organizations for downtown revitalization and redevelopment. It does so through the Four Point Approach™ of the National Trust Main Street Center, providing strategic planning and implementation in Design, Organization, Economic Positioning and Promotions. ELIGIBILITY: MainStreet requires a public / private partnership between the municipality and a downtown revitalization organization. When openings are announced for state program affiliation, the applicant community needs to file a letter of interest, go through an evaluation and assessment process and ranked based on the community’s readiness to be accepted into the state program.

STRUCTURE: The Program has salaried employees, as well as a contract staff of professionals bringing expertise, skills and knowledge into the affiliated communities to implement projects, programs and activities in the MainStreet District.

QUALIFICATIONS/CRITERIA:

o New Mexico MainStreet Program works with communities of all population sizes. o Communities must raise funds for the general operations of the organization and paid staff. o Visit the Mainstreet page at

http://ww1.edd.state.nm.us/index.php?/community/category/Join%20New%20Mexico%20MainStreet/, the homepage at www.edd.state.nm.us, or call (505) 827-0168.

http://ww1.edd.state.nm.us/index.php?/community/category/Join%20New%20Mexico%20MainStreet/

http://ww1.edd.state.nm.us/index.php?/community/category/Join%20New%20Mexico%20MainStreet/


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PROGRAM: New Mexico Community Development Revolving Loan Fund (CDRLF) AGENCY: Economic Development Department (EDD), Development Division DESCRIPTION: The primary objective of the CDRLF is to provide assistance to political subdivisions of New Mexico to construct or implement projects necessary to provide services that will encourage the location of industry. ELIGIBLE USE: Loan funds may be used for

Infrastructure improvements; Acquisition of real property; and Construction, reconstruction, rehabilitation or installation of public facilities, site improvements

and utilities. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: This program provides loans up to $250,000. There is no minimum. Equity: Additional sources of funding are required. Maturities: The term is negotiable, not to exceed 10 years Rates: Loans are fixed at one half the Treasury bond equivalent rate. QUALIFICATION CRITERIA/COMMENTS: An applicant must be a political subdivision (incorporated municipality or county unit of government. The applicant must pass a Resolution authorizing submission of the application and an Ordinance

authorizing repayment of the loan with a set-aside of gross receipts taxes. The project must be located on publicly owned property. For additional information, contact Mayling Armijo at [email protected] or call (505)

827-0264. Visit the economic development homepage at www.edd.state.nm.us.



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AGENCY: New Mexico Finance Authority (NMFA)

DESCRIPTION: The NMFA is dedicated to improving the lives of New Mexicans by planning and financing infrastructure, strengthening the economy through public/private partnerships and setting the standard for superior, diverse, innovative and solution-driven financing. ELIGIBILITY: Programs include a Public Project Revolving Fund, Drinking Water State Revolving Loan Fund, Local Government Planning Fund, Water Trust Board, Primary Care Capital Fund, Behavioral Health Capital Fund, Child Care Facility Loan Fund, Smart Money Initiative, Local Transportation Infrastructure Fund, Energy Efficiency & Renewable Energy Bond Fund and New Market Tax Credits. QUALIFICATION CRITERIA/COMMENTS: Higher education institutions, federally chartered colleges in the state, Indian Nations, Tribes or

Pueblos located wholly or partially in New Mexico, consortia of Tribes, the State of New Mexico, state agencies, state institutions, counties, municipalities, special districts, community water associations, land grant corporations, and school districts all qualify for NMFA programs.

In general, the process includes: o Meet with the NMFA; o The community meets and issues a resolution, submitted with the application; o Categorical exclusion request; o Categorical request document; o Budgets; o Financial audits; o Accounts receivable aging; o Annual financial reports; o Debt summary; o Environmental information document; and o Preliminary engineering report.

Visit www.nmfa.net/Funding/DWRLF.html or www.nmenv.state.nm.us/dwb/dwbtop.html. Also visit www.nmfa.net or call (505) 984-1454.

http://www.nmfa.net/Funding/DWRLF.html

http://www.nmenv.state.nm.us/dwb/dwbtop.html

http://www.nmfa.net/

10: AdditionAl ProgrAms


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Additional Programs DESCRIPTION: There are numerous other programs which may be applied to making a business or housing project

work, including direct loans, equity financing, accounts receivable financing, technical assistance, etc.

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PROGRAM: Angel Investments

DESCRIPTION: Angel investors and angel investor groups are sources of private capital. Most investors keep their information and operations private. However, certain non-profit intermediary groups are often set up to screen businesses before requests are presented to angel investors. ELIGIBLE USE: Fund raising. Generally require less control of business than venture capital. Generally require a slower return on investment than venture capital. Invest in both technology and non-technology businesses. Invest across stages-early stage seed venture to later stage mezzanine financing. NM Angels: New Mexico Angels, Inc. is a not-for-profit [501(c)(6)] affiliation of accredited private investors and

members of venture capital companies working together to invest in New Mexico-based, high growth potential early stage and seed companies.

Visit their investor site at http://www.nmangels.com or call (505) 843-4206.

http://www.nmangels.com/

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PROGRAM: EDA Revolving Loan Fund (RLF)

AGENCY: North Central New Mexico Economic Development District (NCNMEDD) DESCRIPTION: The NCNMEDD through its RLF program seeks to assist small businesses within a defined area with their financing needs. The intent of the program is to create and/or save jobs in economically disadvantaged areas, and thereby increase the local tax base through expanded business ownership opportunities. ELIGIBLE USE: Loan funds may be used for acquisition of land, building construction, expansion and renovation,

purchase of equipment, and limited working capital. Priority projects are generally considered for funding. Eligible counties: Colfax, Los Alamos, Mora, Rio Arriba, San Miguel, Santa Fe, Taos and Sandoval. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: This program provides loans up to $100,000. There is no minimum,

though loans of at least $10,000 are preferred. Equity: A minimum 10%. Maturities: The term varies based on the items being financed, generally five to seven years on

building and equipment, and shorter periods for working capital. Rates: Loans are fixed at or below the prevailing prime rate, generally between 7%-9%. Fees: An origination fee of 1% of the loan amount will be charged, with a minimum of $250. If the

loan is not approved, the fee will be refunded. QUALIFICATION CRITERIA/COMMENTS: An applicant is eligible only when credit is not otherwise available on terms and conditions which

would permit completion and/or successful operation of the project. The loan may not exceed 50% of total project cost. It is desired to match every $1.00 of RLF funds

with $3.00 from other sources whenever possible. The NCNMEDD will require endorsements, collateral, insurance on key people and such other means

of protecting its investment. Application forms are available at the NCNMEDD. A pre-application conference is recommended. Processing time is approximately three weeks. With the application, the borrower must include a personal financial statement, a list of collateral

offered, tax returns for the previous three years, cash flow projections for two years, balance sheets, income statements, lists of accounts receivable and payable, an appraisal, articles of incorporation, board resolutions, a purchase agreement, and a short historical narrative of the business.

The company must comply with various laws and executive orders detailed in the application. For additional information, visit the NCNMEDD website at http://www.ncnmedd.com or call (505)

827-7313.

http://www.ncnmedd.com/

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PROGRAM: Employee Stock Ownership Plan (ESOP)

DESCRIPTION: An ESOP is classified as an employee benefit plan that can be used for corporate debt financing. ELIGIBLE USE: ESOPs are empowered to fulfill many different financing roles for a business:

o Buy out shareholders; o Finance capital expansion; o Refinance existing debt; o Sell off divisions; o Acquire new operations; and o Take a company private.

ESOPS may also be used to save a failing business or avert a plant closing. PROGRAM/LOAN STRUCTURE: The financial and tax advantages to the business and employees of structuring an ESOP include:

o Employer tax deduction - up to 25% of participants’ payroll can be claimed as a deduction to pay principal on an ESOP loan, all interest payments are deductible;

o Employee tax deferral - annual amounts that the business can allocate tax-free to each participants account; usually cannot exceed the lesser of 25% of salary or $30,000;

o Lender interest exclusion - lenders may exclude 50% of interest earned on ESOP loans from taxable income;

o Deferral or roll-over gain on sale - sellers who sell their business to another business where at least 30% of the stock is held by an ESOP can defer any tax on gains if sale proceeds are reinvested within 12 months in securities of another operating business;

o Dividend deductions - companies can deduct dividends paid on ESOP, held stock as long as dividends are used to repay an ESOP loan or paid to employees;

o 50% estate tax exclusion - an estate selling stock to an ESOP can exclude 50% of the value received from sale for estate tax purposes;

o Excise tax exclusions - ESOPs are not subject to excise tax charged on distributions; and o Excess assets tax - ESOPs are exempted from paying a tax on excess assets received from

terminated benefit plans. QUALIFICATION CRITERIA/COMMENTS: ESOPs are comprised of individual employee accounts into which are deposited either stock or the

money used to purchase stock. The business accounts are managed by an Employee Stock Ownership Trust (ESOT) directed by

banks, major shareholders or other authorized personnel, who are responsible for operating the ESOT for the benefit of plan participants.

For information on how ESOPs work, visit http://www.nceo.org/library/esops.html. For information on how to set up an ESOP, visit http://www.nceo.org/library/steps.html. For information in general visit http://www.nceo.org/esops/esop_articles.html.

http://www.nceo.org/library/esops.html

http://www.nceo.org/library/steps.html

http://www.nceo.org/esops/esop_articles.html

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PROGRAM: Equipment Leasing DESCRIPTION: Leasing is an alternative to purchasing general equipment, furniture, medical equipment, office machines, typewriters and computers. ELIGIBLE USE: Leasing provides the following benefits:

o A tax advantage through accelerated depreciation; o Frees up cash for other uses; o Allows lines of credit to be used for other purposes; o Provides a hedge against equipment obsolescence; and o Provides a method of spreading the cost of equipment purchases over the useful life of the

equipment. PROGRAM/LOAN STRUCTURE: Operating lease: The term is shorter than the expected useful life of the lease. This type of lease is

popular for high-tech equipment because short-term leases help equipment users prevent equipment obsolescence.

Finance lease: The term is longer and matches the useful life of the equipment. The rental rate is usually lower because of the longer term and less residual risk.

Sale-leaseback: Equipment is purchased, used for a period of time and sold to a lessor. The equipment is subsequently leased from the lessor, freeing up operating capital.

QUALIFICATION CRITERIA/COMMENTS: Interest rate, tax consequences and end use of equipment should be taken into consideration before

leasing. One site for some additional information is http://www.elaonline.org/.

http://www.elaonline.org/

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PROGRAM: Factoring

DESCRIPTION: Factors purchase invoices at a discount, i.e. they receive the payments and advance funds on a purchase basis, as opposed to a loan basis. ELIGIBLE USE: Factoring provides the following benefits:

o Reduces time and expense of collecting receivables; and o Provides immediate cash flow to meet critical expenses and finance new orders.

PROGRAM/LOAN STRUCTURE: Advance Factoring: Allows a business to obtain cash from a receivable before the invoice is actually

due for payment. Over-advances may also be available to ease business growing pains. Spot Factoring: Allows a business to enter into a short-term contract with the factor; a one-time

transaction with no future commitment restraints applied. Maturity Factoring: Allows a business to receive payments on the average maturity dates of each

month’s sales. Non-Notification Factoring: Is an arrangement in which the business maintains the bookkeeping and

collection function, while the factor guarantees the credit and may be formally assigned to carry out the collection function.

Importing and Exporting Factoring: Relevant only when dealing with foreign customers. The factor performs the credit approval process on foreign customers on behalf of the business. Cash is provided to the business when the goods are shipped.

QUALIFICATION CRITERIA/COMMENTS: May be more expensive than bank financing. One possible source for more information is

http://www.business.com/directory/financial_services/commercial_finance/factoring/.

http://www.business.com/directory/financial_services/commercial_finance/factoring/

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PROGRAM: Flywheel Ventures AGENCY: Flywheel Ventures DESCRIPTION: Flywheel Ventures is a seed and early-stage venture capital firm focused on information technology and physical sciences ventures in the Southwest/Rockies region. The firm matches talented entrepreneurs with market opportunities where Flywheel’s capital, entrepreneurial experience and industry relationships help accelerate innovations into profitable companies. Flywheel’s goal is to be the premier early-stage technology venture capital firm in the Southwest/Rockies region and a catalyst for its emergence as a world-class technology center. Flywheel has offices in Santa Fe, Albuquerque and Silicon Valley. ELIGIBILITY: Flywheel’s investment strategy is to make seed- and early-stage private equity investments in high technology ventures located primarily in the Southwest/Rockies region, with an emphasis on emerging innovation centers in New Mexico, Colorado and Arizona. PROGRAM LOAN/STRUCTURE: The fund targets initial investments of $100,000-$1 million in new and emerging innovations and entrepreneurs arising out of the region’s research universities, R&D organizations and national laboratories. As lead investors, Flywheel expects to take board positions on investments, with no more than five active board seats per Flywheel team member at any given time. With respect to seed investments in its target region, Flywheel expects to reserve capital in a ratio of at least 3:1 for follow-on investments. Flywheel team members aim to be active investors, applying a traditional portfolio management approach with a focus on governance, investment oversight and hands-on support to assist companies in achieving milestones. QUALIFICATIONS/CRITERIA: The fund focuses on the region’s key sector drivers, including software, telecommunications,

semiconductors, clean technology, and advanced materials. In addition, Flywheel looks for ventures that meet the following criteria:

Product/services that re-segment existing markets or leverage disruptive technologies; Business models that offer a capital efficient path to profitability and/or shareholder liquidity; and Ventures in which Flywheel team’s expertise, experience and relationships can add concrete and

significant value. Visit www.flywheelventures.com or call (800) 750-7870.

http://www.flywheelventures.com/

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PROGRAM: FSA Indian Tribal Loan for Purchase of Land AGENCY: Farm Services Agency DESCRIPTION: Provides loans to Indian Tribes to purchase land within their reservations. Authorized under Public Law 91-229 (Loans to Indian Tribes and Tribal Corporations). ELIGIBLE USES: Land acquisitions must benefit tribal members. Funds may be used to buy lands, or acquire interest in

lands within: (1) an Indian reservation; or (2) an Alaskan Indian community incorporated in conformity with the Indian Reorganization Act. Funds may be used to pay expenses incidental to the purchase of land, including costs of appraisals, title and legal services, surveys and loan closings.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: $1 million national budget; the amount available for each state varies. Term: Maximum of 40 years. Interest: Based on cost of borrowing to the U.S. government and subject to change if the cost of

borrowing changes. QUALIFICATION CRITERIA/COMMENTS: Land must be within the boundaries of the reservation. Applicants must be federally recognized Indian Tribes or Tribal corporations established in

accordance with the Indian Reorganization Act. Applicants must establish that they do not have uncommitted funds sufficient to buy the land that they

seek to recover and cannot obtain sufficient credit at reasonable rates/terms from a source other than FSA.

Plan requires approval by the authorized Tribal governing body, the Bureau of Indian Affairs and the FSA.

Prospective applicants should contact the FSA County Supervisor serving the area in which the Tribe's reservation is located.

Visit the loan services website at http://www.fsa.usda.gov/dafl/default.htm, the home page at http://www.fsa.usda.gov/pas/, or call the Washington office at (202) 720-7809.



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PROGRAM: FSA Limited Resource Farm Loan Program

AGENCY: Farm Services Agency (FSA) DESCRIPTION: The Limited Resource Farm Loan Program provides direct loans to low-income farmers and ranchers to buy improve or enlarge family farms. ELIGIBLE USE: Loan funds may be used to buy land, build or improve existing structures and facilities, and improve

farmland and forests. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: This program provides direct loans up to $200,000. Maturities: The term may not exceed seven years for working capital and 40 years for fixed assets.

Terms will vary depending on the borrower's ability to repay and use of the loan proceeds. Rates: Loans are provided at reduced interest rates and may be fixed or variable. Rates are later

adjusted to reflect changes in the borrower's resources. QUALIFICATION CRITERIA/COMMENTS: An applicant must be the owner/operator of a family farm and have limited income to buy or make

necessary improvements. Applicants who have current FSA farm ownership, soil and water, recreation or operating loans are

not eligible for this program. Applicants should contact a private lender or the FSA District Office serving the area where the

property is located. Visit the loan services website at http://www.fsa.usda.gov/dafl/default.htm, the home page at

http://www.fsa.usda.gov/pas/, or call the Washington office at (202) 720-7809.



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PROGRAM: HUD HOME Program

AGENCY: Mortgage Finance Authority (MFA) DESCRIPTION: The objective of the HOME Program is to expand the supply of decent and affordable housing for low- and very low-income residents. HOME is authorized under Title II of the Cranston-Gonzalez National Affordable Housing Act, as amended. Program regulations are at 24 CFR Part 92. ELIGIBLITY: Participating jurisdictions may choose among a broad range of eligible activities, using HOME funds

to provide home purchase or rehabilitation financing assistance to eligible homeowners and new homebuyers; build or rehabilitate housing for rent or ownership; or for "other reasonable and necessary expenses related to the development of non-luxury housing," including site acquisition or improvement, demolition of dilapidated housing to make way for HOME-assisted development, and payment of relocation expenses.

PJs may use HOME funds to provide tenant-based rental assistance contracts of up to two years if such activity is consistent with their Consolidated Plan and justified under local market conditions. This assistance may be renewed. Up to 10 % of the PJ's annual allocation may be used for program planning and administration.

Program funds may be used for grants, direct loans, loan guarantees or other forms of credit enhancement, or rental assistance or security deposits.

States are automatically eligible for HOME funds and receive either their formula allocation or $3 million, whichever is greater. Local jurisdictions eligible for at least $500,000 under the formula ($335,000 in years when Congress appropriates less than $1.5 billion) can receive an allocation.

For rental housing and rental assistance, at least 90 % of benefiting families must have incomes that are no more than 60 % of the HUD-adjusted median family income for the area. In rental projects with five or more assisted units, at least 20% of the units must be occupied by families with incomes that do not exceed 50% of the HUD-adjusted median. The incomes of households receiving HUD assistance must not exceed 80 % of the area median.

PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: HOME provides assistance in the form of grants, deferred loans and

low interest loans. The minimum amount of funding per unit is $1,000. Maturities: Dependent on the type of funding provided. Rates: Dependent on the type of funding provided. QUALIFICATION CRITERIA/COMMENTS: HOME uses the Department of Housing and Urban Development definition of low- and very low

income. HOME's requires that participating jurisdictions (PJs) match 25 cents of every dollar in program

funds. The match requirement may be reduced if the PJ is distressed or has suffered a Presidentially declared

disaster. In addition, PJs must reserve at least 15 % of their allocations to fund housing to be owned, developed, or sponsored by experienced, community-driven non-profit groups designated as Community Housing Development Organizations (CHDOs).

For more information, visit http://www.hud.gov/offices/cpd/affordablehousing/programs/home/, the homepage at www.hud.gov or call (202) 708-1112.

http://www.hud.gov/offices/cpd/affordablehousing/programs/home/

http://www.hud.gov/

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AGENCY: Loan Fund

DESCRIPTION: NMCDLF’s mission is to provide loans and assistance to improve the economic and social conditions of New Mexicans. NMCDLF programs are designed to alleviate the high poverty rate in the state and to assist New Mexicans in becoming economically self-sufficient. The organization is a 501(c)(3) non-profit with bilingual loan officers. ELIGIBILITY: Non-profit organizations involved in affordable housing, daycare, health care, cultural organizations,

cooperatives, youth organizations are eligible. Eligible small businesses include start-ups and expansions, entrepreneurs and family-owned

businesses. STRUCTURE: Loan terms:

o Loan amounts based on need, average $5,000 to $100,000; o Collateral required; and o Competitive interest rates.

Funding sources include investments, grants, program fees and interest, and contributions. Business and advertising assistance is available for:

o Financial management and bookkeeping; o Marketing and promotion; o Board development; o Strategic planning; and o Legal and tax referrals.

QUALIFICATIONS/CRITERIA: Documentation of credit history. Sustainable enterprise. Meets “social benefit” criteria. For more information, visit the website at www.nmcdlf.org or call (505) 243-3196.

http://www.nmcdlf.org/

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AGENCY: Mesa Capital Partners DESCRIPTION: Mesa Capital Partner’s mission is to grow small businesses by providing equity capital for expansion, investment and restructuring. ELIGIBILITY: Early stage and small business sector located in geographic areas underserved by other capital providers. STRUCTURE: Focuses on cash flow generation and sustainability where traditional venture capital focuses on

explosive, breakout opportunities. Targets a 70% success rate where traditional venture capital focuses on a 10-20% success rate. Three to five year investment cycle. Investments of $500,000 to $2 million in low-tech manufacturing, service and distribution. QUALIFICATIONS/CRITERIA: For investment, Mesa looks for: High potential small businesses. Proven product and revenue. A sizeable and dynamic market. A competitive differentiation. An unrealized growth potential. Multiple exit opportunities. For more information, visit www.mesacapitalpartners.us or call (505) 428-2990.

http://www.mesacapitalpartners.us/

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AGENCY: New Mexico Community Capital DESCRIPTION: New Mexico Community Capital’s mission is “to improve the lives of New Mexicans, particularly those in rural and economically under-served areas, by investing in New Mexican businesses, helping those companies prosper, and contribute to their communities.” STRUCTURE: The average investment of NMCC is $500,000 to $1m targeted at businesses with sales of at least

$500,000, with a positive cash flow and sales growth, experienced management, and at least five full time employees.

40% of investment is targeted outside the Rio Grande corridor. NMCC looks for underserved businesses and communities with businesses in light manufacturing,

consumer business & services, consumer products, food processing, artisan and tourism, and sustainable energy and environmental remediation.

QUALIFICATIONS/CRITERIA: For more information, visit the website at www.nmcap.org, call (505) 924-2820.

http://www.nmcap.org/

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PROGRAM: New Mexico Private Equity Investment Program AGENCY: New Mexico State Investment Council (SIC) DESCRIPTION: The SIC invests in private equity through limited partnerships to enhance the economic climate in the State of New Mexico. ELIGIBLE USE: The SIC, through the Private Equity Investment Program, provides a source of equity to finance: Start-up of new businesses. Expansion or turn around of existing businesses. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Equity investments provide the potential for a higher rate of return and

portfolio diversification, while facilitating job creation. SIC invests in private equity through limited partnerships. Investment is long-term, normally 12 to 15 years. QUALIFICATION CRITERIA/COMMENTS: SIC is a silent investor, providing investment capital, but not making investment decisions. General partners of the limited partnerships are responsible for choosing and monitoring individual

investments. The State Investment Officer may give consideration to investments in private equity funds whose

investments enhance the economic development objectives of the state; provided such investments offer a rate of return and safety comparable to other private equity investments currently available.

No more than 10% of the allocation may be invested in any one private equity fund. The SIC investment may not exceed 20% of the committed capital of any private equity fund. Visit http://www.state.nm.us/nmsic/private_equity.htm or call (505) 424-2500.

http://www.state.nm.us/nmsic/private_equity.htm

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PROGRAM: Office of Business Advocacy

AGENCY: New Mexico Economic Development Department

DESCRIPTION: The Office of Business Advocacy advances New Mexico business and enterprise with expansion, retention and growth.

ELIGIBLE USE: Enables business owners to break through regulatory roadblocks and red tape. Helps navigate state government with assistance for permitting or licenses, inspections, taxation and

customized research reports. Resolves challenging bureaucratic, intergovernmental and public policy problems affecting

businesses in New Mexico. QUALIFICATION CRITERIA/COMMENTS: Any New Mexico business may receive assistance. Visit http://www.NMforBusiness.com or call (505) 827-0089 for assistance.

http://www.nmforbusiness.com/

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PROGRAM: Production Credit Association (PCA)

DESCRIPTION: Production Credit Associations are customer-owned, credit cooperatives established by farmers and ranchers to provide themselves a source of reliable credit. PCAs form a nationwide system operated under the Farm Credit System created by Congress in 1917. ELIGIBLE USE: PCAs may offer

o Short-, intermediate- and long-term financing at variable and fixed interest rates; o Operating loans; o Rural housing loans; and o Farm-related loans.

Loan proceeds may be used for feed, fertilizer, labor, harvesting expenses, fencing and other improvements, chemical sprays, spraying equipment, livestock, poultry, machinery, processing equipment, storage facilities, farm buildings, insurance, autos and trucks, and almost anything directly or indirectly involved in the operation of a farm or ranch, as well as family needs of the member-stockholder.

QUALIFICATION CRITERIA/COMMENTS: Eligible borrowers include:

o Anyone actively engaged in farming or ranching, or certain agriculture-related businesses. This includes individuals, partnerships or corporations. People who farm part-time are also eligible; and

o Individuals may also obtain financing for rural residences. A PCA requires a plan on the use of the credit, a repayment plan and a current financial statement.

Additional information may be required as determined by loan size and complexity. Visit http://www.webref.org/agriculture/p/production_credit_association.htm for more information on

PCAs.

http://www.webref.org/agriculture/p/production_credit_association.htm

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PROGRAM: Regional Revolving Loan Fund

AGENCY: Cibola Communities Economic Development Foundation DESCRIPTION: A variety of incentives offered to encourage economic development in Cibola County. PROGRAM/LOAN STRUCTURE: Financial assistance is provided through gap financing and small business loans. QUALIFICATION CRITERIA/COMMENTS:

Available to qualified manufacturing and processing businesses located or willing to locate in Cibola County.

The foundation has also developed an industrial park. Visit http://www.ciboled.org/ and call (505) 287-4802.

http://www.ciboled.org/

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PROGRAM: RD Intermediary Re-Lending Program (IRP)

AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Business-Cooperative Service DESCRIPTION: The purpose of the program is to finance business facilities and community development projects in rural areas. This is achieved through loans made by USDA Rural development to intermediaries. Intermediaries re-lend funds to ultimate recipients in rural areas (under 25,000 population). ELIGIBLE USE: All IRP loan funds received by an intermediary must be re-loaned to ultimate recipients. Interest

income and fees may be used for administrative costs, technical assistance to borrowers or debt retirement. All collections from the operation of the IRP revolving loan fund that are not used for these authorized expenses must be available for re-lending to eligible ultimate recipients.

Loans from intermediaries to ultimate recipients must be for the establishment of new businesses and/or the expansion of existing businesses, creation of employment opportunities, and/or saving existing jobs, or community development projects.

PROGRAM/LOAN STRUCTURE: Terms: Loans to intermediaries are scheduled for repayment over a period of up to 30 years. The

term of loans to ultimate recipients is set by the intermediary. Rates: The interest rate on loans to intermediaries is 1% per annum. The interest rate on loans to

ultimate recipients is negotiated by the intermediary and the ultimate recipient. QUALIFICATION CRITERIA/COMMENTS: Intermediaries:

o Must be private non-profit corporations, public agencies, federally recognized Indian groups or cooperatives;

o Have the legal authority to carry out the proposed loan purposes; and to incur and repay the debt; o Have a proven record of successfully assisting rural business and industry, normally including

experience in making and servicing commercial loans; and o Provide adequate assurance of payment.

Ultimate recipients may be private or public organizations, or individuals. Applications for intermediaries will be filed with the USDA Rural Development national office in

Washington, DC. Collateral is required. For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-4730.

http://www.rurdev.usda.gov/

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PROGRAM: RD Multi-Family Program AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service DESCRIPTION: This program, also known as the Rural Rental Housing or Section 515 Loan Program, was developed by the RD. The Multi-Family Program offers direct and guaranteed loans for purchasing, constructing and/or repairing multi-family housing units for households with very low-, low- and moderate-incomes. ELIGIBLE USE: The purchase, construction or repair of multi-family housing units, including duplexes, garden

apartments and similar type units are eligible. Purchase and improvements of the land on which housing units will be located. Improvement of on-site streets, water and waste disposal systems. Development of recreational and service facilities. Install laundry facilities and equipment. Provide landscaping. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The Direct Loan finances up to 100% of the appraised value or

development cost, whichever is less, for non-profits, and state and local public agencies. Up to 95% or 97% financing on the lesser of appraised value or development cost is available to private, for-profit developers, depending on whether tax credits will be available.

Equity: Eligible borrowers must demonstrate and provide initial operating capital equal to at least 2% of the total development cost. Non-profits and public agencies may include the 2% in the financing, but may also have to finance up to 5% of initial cost.

Maturities: Up to 30 years maximum, with 50-year amortization. Rates: One% minimum interest rate, below market rates are available for borrowers in accordance

with the market rent structure. Fees: The borrower is responsible for closing costs and other fees. Such costs may be loan eligible. QUALIFICATION CRITERIA/COMMENTS: Eligible borrowers include individuals, trusts, associations, partnerships, corporations, state and local

public agencies, consumer cooperatives, for-profit and non-profit organizations, and Indian Tribes. Projects located in communities with populations of less than 20,000 are eligible. Ineligible uses of the program include commercial properties and communities over 20,000 in

population. A complete loan application must include financial information, market feasibility plans and

specifications, ownership and management experience, and demonstration of financial need. Applications are accepted under a NOFA process for designated states. RD Area Offices and the State Office receive and review applications. For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-1522.


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PROGRAM: RD Rural Economic Development Loan Program

AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Utility Service (RUS) DESCRIPTION: The purpose is to provide zero interest loans to electric and telephone utilities financed by the Rural Utility Service (RUS) to promote sustainable rural economic development and job creation projects. ELIGIBLE USE: RUS utility:

o Must not be delinquent on federal debt or in bankruptcy proceedings; o Is required to re-lend the loan proceeds, at zero percent interest, to an eligible third-party

recipient. Priority is given to projects that are physically located in rural areas having a population of less than 2,500 people; and

o Is responsible for repaying the loan to Rural Business-Cooperative Service in the event of delinquency or default by the third-party recipient.

Third-party recipients: o Business expansions and start-ups, including cost of buildings, equipment, machinery, and land

site development and working capital; o Community infrastructure necessary for economic development and job creation purposes; o Community facilities and services necessary for economic development and job creation

purposes; o Facilities and equipment to provide medical care to rural residents; o Education facilities and equipment to provide training and job enhancement skills to rural

residents; and o Business incubator projects to assist in developing emerging enterprises.

PROGRAM/LOAN STRUCTURE: Terms: RUS utility will repay the principal amount of the loan within 10 years. Terms for the third –

party recipient is similar. QUALIFICATION CRITERIA/COMMENTS: Eligibility is limited to Rural Utility Service (RUS) electric and telephone utilities, and third-party

recipients having corporate and legal authority to incur debt. For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-1522.


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PROGRAM: RD Rural Housing Insured Loan Program - Section 502

AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: Program provides loans for very low- and low-income families who are without adequate housing and live in rural areas. ELIGIBLE USES: Home acquisition, construction, improvement and relocation. Also the acquisition of adequate

building sites, home refinancing, and the purchase of new manufactured homes through an approved dealer/contractor.

PROGRAM/LOAN STRUCTURE: Term: 30 years. Rates: The promissory note interest rate is set by the lender. Applicants for loans may have an income of up to 115% of the median income for the area. QUALIFICATION CRITERIA/COMMENTS: The program assists very low- and low-income families who are without adequate housing and

related facilities and cannot obtain credit from other sources; and will become the owner occupants. Housing must be located in rural areas (i.e., any place which is not part of or associated with a non-

rural area, is rural in character and has a population not in excess of 10,000, or 25,000 under certain conditions.)

For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-1522.


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PROGRAM: RD Rural Housing Site Loan Program - Sections 523 & 524

AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Housing Service (RHS) DESCRIPTION: Loans for public or private non-profit organizations to buy and develop building sites. ELIGIBLE USES: Construction of access roads, streets and utilities. Section 523 Loan funds may be used to purchase land to be used by mutual self-help participants. Sites must be developed for low- and moderate-income families. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Loans in excess of $200,000 must have prior approval of the National

Office. Maturities: Two years on Direct Loans or Self-Help Loans. Rates: 3% on direct loans for self-help sites only (523) and the rate for 534 Loan is determined

annually. QUALIFICATION CRITERIA/COMMENTS: Limited to public or private non-profit organizations. Sites developed with a Section 524 Loan must be for low- and moderate-income housing, and may be

sold to families, non-profit organizations, public agencies and cooperatives. Sites developed with a Section 523 Loan can only be used for housing of low-income families

participating in the mutual self-help program. Sites developed with a Section 523 Loan may be sold only to qualified families who will build homes

by the self-help method. Sites developed with a Section 524 Loan may be used for dwellings for low and moderate income

families and may be sold to families, non-profit organizations, public agencies and cooperatives eligible for assistance under any law which provides financial aid for housing. Such agencies include USDA Rural Development, HUD, VA, private lenders, non-profit organizations funded by federal, state or local governments, or state and local public agencies.

For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-1533.


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PROGRAM: SBA Section 8(a) Program

AGENCY: Small Business Administration (SBA) DESCRIPTION: Through the 8(a) Program, small businesses owned by socially and economically disadvantaged persons may obtain federal government contracts and other assistance in developing their business. ELIGIBLE USE: The SBA acts as a prime contractor and enters into all types of federal government contracts with

other government departments and agencies, and negotiates subcontracts for small business owners accepted into the 8(a) Program.

Government contracts include, but are not limited to: o Supply; o Services; o Construction; and o Research and development.

PROGRAM/LOAN STRUCTURE: Term: Every 8(a) participant is subject to a Program Participation Term (PPT). This term will be

nine years from the date an applicant is certified as a program participant. QUALIFICATION CRITERIA/COMMENTS:

Applicants must meet certain program requirements, including: o Ownership: An applicant concern must be one which is at least 51% owned by an individual who

is a citizen of the U.S. and who is determined to be socially and economically disadvantaged; o Social disadvantage: Socially disadvantaged individuals are those who have been subjected to

racial or ethnic prejudice or cultural bias because of their identity as a member of a group, without regard to their individual qualities;

o Economic disadvantage: Economically disadvantaged individuals are socially disadvantaged and whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities, control, and management. An applicant concern's management and daily business operations must be controlled by an individual(s) determined to be socially and economically disadvantaged, and who is engaged in the daily management and operation of the business;

o Size standard: Must qualify as a small business as defined by the SBA; and o Potential for success: An applicant must be determined, with support, to be able to successfully

perform on contracts awarded and will have a reasonable prospect for success in competition in the private sector.

For more on the 8a program, visit http://www.sba.gov/ or call (800) 827-5722.

http://www.sba.gov/

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PROGRAM: SBA Small Business Investment Company (SBIC)

AGENCY: Small Business Administration (SBA) DESCRIPTION: SBIC's are privately-owned and operated investment companies licensed by the SBA to provide equity, venture capital and/or loans to small businesses and minority-owned businesses. ELIGIBLE USE: The SBIC must provide equity capital to small businesses. The SBIC may loan money to small businesses in the form of debt securities. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: Small businesses qualifying for assistance benefit from equity capital,

long-term loans and expert management assistance. Venture capitalists participating in the SBIC program can supplement their own private investment

capital with funds obtained at favorable rates through assistance from the federal government. U.S. taxpayers also benefit. Tax revenues generated each year from successful SBIC investments

more than cover the cost of the program and SBIC-financed businesses create jobs. Equity: Variable. Maturities: Generally five to 20 years. Rates: Are regulated by the SBA in the interest of the small business. The cost of money is limited

to the applicable state regulations governing such loans and debt securities, or by SBA regulations, whichever is lower.

Fees: Variable. QUALIFICATION CRITERIA/COMMENTS: Private capital must be sufficient for the SBIC to be operated soundly and profitably. SBIC's in good standing receive financial leverage from the SBA. For more on the SBIC, visit http://www.sba.gov/ or call (202) 205-6510.

http://www.sba.gov/INV/mission.html

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AGENCY: Technology Ventures Corporation (TVC)

DESCRIPTION: TVC is incorporated as a non-profit company in New Mexico to support start-up and expanding technology-based companies. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: The operating concept of TVC is to:

o Develop linkages between investment sources such as venture capital funds and entrepreneurs, or start-up and expanding companies;

o Locate applicable technologies resident in the laboratories, universities and other sources; o Coordinate business and management support for entrepreneurial companies; and o Assist in the relocation or expansion of existing technology-based companies.

TVC also recognizes the top 40 technology companies in the state with its Flying 40 Program. QUALIFICATION CRITERIA/COMMENTS: For additional information, visit the TVC website at http://www.techventures.org or call (505) 246-

72891.

http://www.techventures.org/

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PROGRAM: Tri-County Regional Revolving Loan Fund

AGENCY: North Central New Mexico Economic Development District (NCNMEDD) DESCRIPTION: The Tri-County Regional Revolving Loan Fund is an incentive implemented to assist counties impacted by program changes experienced by Los Alamos National Laboratory (LANL). ELIGIBLE USE: The types of organizations and projects that may be financed include:

o Locally-owned enterprises in which a major portion of revenue accrues to the business and employment opportunities are expanded;

o Newly established businesses with a financial condition unsuitable of accessing traditional financing sources;

o Small manufacturing, technology-based or service businesses representing a realistic and demonstrated potential for economic growth;

o Enterprises that export products nationally or internationally, or further process raw materials indigenous to northern New Mexico;

o Projects that diversify the economy or substantially enhance the regional tax base; and o Projects not requiring loan guarantees available from other sources.

Eligible uses of funds include: o Acquisition of land and buildings; o Building construction or modification; and o Purchase of equipment; and working capital.

Eligible counties include Los Alamos, Rio Arriba, Santa Fe, and parts of Sandoval and Taos. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits: There are no fixed loan limits; however loans up to $100,000 and at

least $10,000 are preferred. Equity: A minimum 10%. Maturities: Generally five to seven years for capital assets and shorter periods for working capital. Rates: Loans are fixed during the loan term at a level of near (within 100 to 200 basis points) the

prevailing prime rate. Fees: An origination fee of 1% of the loan amount will be charged, with a minimum of $250. If the

loan is not approved, the fee will be refunded. QUALIFICATION CRITERIA/COMMENTS: All loans must have no less than a one-to-one match from other private sources. One job must be created or retained for every $25,000 loaned. Collateral, endorsements and key person insurance is required. A pre-application conference with NCNMEDD staff is recommended to discuss eligibility and any

special requirements. For additional information, visit the NCNMEDD website at http://www.ncnmedd.com or call (505)

827-7313.

http://www.ncnmedd.com/

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PROGRAM: Venture Capital

DESCRIPTION: Venture capital is a source of private capital. ELIGIBLE USE: Fund raising technique. Generally requires the exchange of equity in return for funding. Generally requires a high rate of return on investment (20% per annum). Typical investment ranges from $500,000 to many millions of dollars. Invest in both technology and non-technology businesses. Invest across stages-early stage seed venture to later stage mezzanine financing. QUALIFICATION CRITERIA/COMMENTS: For more information on venture capital see 7-2D-1 NMSA or visit the New Mexico Venture Capital

Association (NMVCA) website at http://nmvca.org.

http://nmvca.org/

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PROGRAM: Worker Cooperative

DESCRIPTION: A legal structure for employee ownership of a business. ELIGIBLE USE: A worker cooperative will credit members with a portion of net earnings and use the funds as tax-free

money to finance growth. PROGRAM/LOAN STRUCTURE: Maximum Program Benefits:

o Net earnings are shared with workers based on a percentage, usually equal to the number of hours an employee worked; and

o Worker cooperatives are accorded special tax status based on the fact that they are not designed to make a profit.

QUALIFICATION CRITERIA/COMMENTS: Worker cooperatives are democratically managed:

o Only workers can be members; and o Each member has one vote.

Members pay membership fees that entitle them to join the cooperative and purchase a share of stock: o Share values can be set at any level; and o Members can hold their shares individually or put them in an account.

Members can receive the funds allocated to an account when they leave the worker cooperative.