new mexico mortgage finance authority board meeting … · hoc investment committee met on august...

NEW MEXICO MORTGAGE FINANCE AUTHORITY Board Meeting

344 4th St. SW, Albuquerque, NM Wednesday, September 19, 2018 at 9:30 a.m.

Agenda Chair Convenes Meeting Roll Call (Jay Czar) Approval of Agenda – Board Action Approval of August 15, 2018 Board Meeting Minutes – Board Action Approval of August 15-16, 2018 Board Retreat Meeting Minutes – Board Action New Employee Introductions: Martha Armijo - Lending Assistant (René Acuña)

Board Action Items Action Required? Finance Committee 1 Low Income Housing Tax Credit Control Procedures Report (Cait Gutierrez & Jessica Bundy, REDW) YES 2 Low Income Housing Tax Credit Project (Claire Hillary & Jessica Bundy, REDW) YES 3 Production Statistics (Gina Hickman & Izzy Hernandez) NO 4 FY 2018-2019 General Fund Budget (Yvonne Segovia) YES

Annual Review of Compensation & Benefits (Compensation Committee) NO 5 FY 2018-2019 NM Affordable Housing Charitable Trust Budget (Yvonne Segovia) YES 6 2019 Areas of Statistically Demonstrated Need for 2019 Qualified Allocation Plan (Shawn Colbert) YES Contracted Services/Credit Committee 7 Request For Proposals (RFP) Mortgage Servicing Legal Services (Jeff Payne) YES Other 8 MFA Strategic Plan, Changes for Year 2 (FY 2019) (Monica Abeita) YES 9 MFA 2019 Legislative Agenda (Monica Abeita) YES Other Board Items Information Only 10 (Staff is available for questions)

Staff Action Requiring Notice to Board Monthly Reports No Action Required 11 (Staff is available for questions)

7/31/18 Financial Statements Communications Department Reports

Announcements and Adjournment Discussion Only Confirmation of Upcoming Board Meetings October 17, 2018 – Wednesday – 9:30 a.m. (Albuquerque – MFA) November 15, 2018 - moved up a week to Thursday – 9:30 a.m. (Albuquerque – MFA) December 19, 2018 - Wednesday – 9:30 a.m. (Albuquerque – MFA)

NEW MEXICO MORTGAGE FINANCE AUTHORITY Board Meeting

344 4th St. SW, Albuquerque, NM Wednesday, September 19, 2018 at 9:30 a.m.

Agenda Chair Convenes Meeting Roll Call (Jay Czar) Approval of Agenda – Board Action Approval of August 15, 2018 Board Meeting Minutes – Board Action Approval of August 15-16, 2018 Board Retreat Meeting Minutes – Board Action New Employee Introductions: Martha Armijo - Lending Assistant (René Acuña)

Board Action Items Action Required? Finance Committee 1 Low Income Housing Tax Credit Control Procedures Report (Cait Gutierrez & Jessica Bundy, REDW) -

REDW will present the report from the Low Income Housing Tax Credit Control Procedures internal audit to the Board for approval. YES

2 Low Income Housing Tax Credit Project (Claire Hillary & Jessica Bundy, REDW) - REDW will present their report on the Low Income Housing Tax Credit Agreed Upon Procedures project requested by the Board. YES

3 Production Statistics (Gina Hickman & Izzy Hernandez) - In conjunction with the FY 2018-2019 General Fund Budget, staff will provide the Board a presentation on MFA production and financial highlights over the last 10-years. NO

4 FY 2018-2019 General Fund Budget (Yvonne Segovia) - MFA’s General Fund proposed budget for FY 2018-2019 is recommended for approval. Revenue is projected at $21,619,000, a decrease of ($2,288,000) or (10%) under projected 9/30/18 actual and an increase of $92,000 or 0% over prior year budget. The expense budget is projected at $17,009,000, an increase of $1,839,000 or 12% over 9/30/18 projected actual and an increase of $1,500,000 or 10% over prior year budget. The FY 2018-2019 budgeted excess revenue over expenses is $4,610,000. The capital budget is $3,088,000, a decrease of ($867,000) or (22%) under projected actual and a decrease of ($800,000) or (21%) under prior year budget. The FY 2018-2019 revenue over total budget including capital items is $1,521,000. YES Annual Review of Compensation & Benefits (Compensation Committee) NO

5 FY 2018-2019 NM Affordable Housing Charitable Trust Budget (Yvonne Segovia) - The NM Affordable

Housing Charitable Trust Budget is recommended for approval. Revenue is projected at $25,100, and the expense budget is projected at $3,000, resulting in a FY 2018-2019 budgeted excess revenue over expenses of $22,100. YES

6 2019 Areas of Statistically Demonstrated Need for 2019 Qualified Allocation Plan (Shawn Colbert) - Staff recommends approval of the attached Selection Methodology and the attached 2019 list of Areas of Statistically Demonstrated Need. YES

Contracted Services/Credit Committee 7 Request For Proposals (RFP) Mortgage Servicing Legal Services (Jeff Payne) - Staff recommends the approval of

the Request for Proposals for Mortgage Servicing Legal Services. Responses will be due to MFA by Wednesday, October 10, 2018. Recommendations for awards will be presented in November 2018 for MFA Board approval. YES

Other 8 MFA Strategic Plan, Changes for Year 2 (FY 2019) (Monica Abeita) - Board approval is requested for changes to

MFA’s FY 2018-2022 Strategic Plan for Year 2 (FY 2019). MFA will complete the first year (FY 2018) of the plan

MFA Board Agenda September 19, 2018 Page 2

Page 2 of 2

on September 30, 2018 and will begin the second year (FY 2019) on October 1, 2018. Year 2 strategic plan changes include new/changed strategic initiatives and benchmarks. YES

9 MFA 2019 Legislative Agenda (Monica Abeita) - Board approval is requested for MFA’s legislative agenda for the 2019 New Mexico Legislative Session. The 2019 legislative agenda includes seven appropriations requests: Regional Housing Authority Oversight, Affordable Housing Act Oversight, the New Mexico Housing Trust Fund, the NM Energy$mart Program, Veteran Home Rehabilitation, Emergency Home Repair and Homebuyer Counseling. YES

Other Board Items Information Only 10 (Staff is available for questions)

Staff Action Requiring Notice to Board Monthly Reports No Action Required 11 (Staff is available for questions)

7/31/18 Financial Statements Communications Department Reports

Announcements and Adjournment Discussion Only Confirmation of Upcoming Board Meetings October 17, 2018 – Wednesday – 9:30 a.m. (Albuquerque – MFA) November 15, 2018 - moved up a week to Thursday – 9:30 a.m. (Albuquerque – MFA) December 19, 2018 - Wednesday – 9:30 a.m. (Albuquerque – MFA)

Minutes

NEW MEXICO MORTGAGE FINANCE AUTHORITY

Board Meeting Minutes Sandia Resort & Casino (Eagle room) - 30 Rainbow Rd, Albuquerque, NM 87113

Wednesday, August 15, 2018 at 9:30 a.m.

Chair Burt convened the meeting on August 15, 2018 at 9:30 a.m. and welcomed Lieutenant Governor Scott Paisano, Pueblo of Sandia. Lieutenant Governor Scott Paisano opened the Board Retreat with a prayer. He welcomed MFA to the Pueblo of Sandia and thanked the Board for selecting this venue to hold their retreat. He indicated that he had researched MFA’s website stating that the pueblo strives to provide similar services. The Pueblo continues to strive to make improvements in their housing authority and housing board. He congratulated MFA on their future endeavors stating that Sandia has the same passion for their members and continues to strive to provide housing services. He informed the Board that he sits as Chairman of Sandia’s Housing Board. Paisano further informed the Board that the Pueblo has approximately 5,000 members and 550 homes. He indicated that the development is not very quick or explosive; they average approximately 5-6 houses a year and spoke to the programs they provide. Secretary Czar called the roll Members present: Chair Dennis Burt, Angel Reyes, Sally Malavé (designee for Attorney General Hector Balderas), Mark Van Dyke (designee for Lieutenant Governor John Sanchez), Treasurer Tim Eichenberg (arrived during tab 1 at 9:49 a.m.) and Randy McMillan. Absent: Steven Smith. Czar informed the Board that everyone had been informed about today’s meeting in accordance with the New Mexico Open Meetings Act. Approval of Agenda - Board Action. Motion to approve the August 15, 2018 Board agenda as presented: Reyes. Second: Malavé. Vote: 5-0. Approval of July 18, 2018 Board Meeting Minutes – Board Action. Motion to approve the July 18, 2018 Board Meeting Minutes as presented: Van Dyke. Second: Malavé. Vote: 5-0. Finance Committee 1 6/30/18 Quarterly Financial Statement Review (Gina Hickman). Hickman presented the Quarterly Financial

Statements packet located behind tab one which will be included in the official board packet. She began her presentation with the Summary of New Bond Issues – informing the Board that bond issuance had really increased this year. Three bond issues have closed through July with a 4th bond issue closing in September. She explained that the economics of the Single Family Program have changed since the beginning of February when MFA began bonding for all First Home Program loans and TBA spreads for the sale of Next Home loans have decreased due to changes in the secondary market and the interest rate environment. Further commenting that MFA’s had record single family mortgage production for the third year in a row and anticipate that MFA will have achieved over $400mm production by the end of the year.

Eichenberg arrived at 9:49 a.m. Hickman reviewed the comparative June 30, 2018 year to date metrics and variances which included the following: Production, Balance Sheet, Income Statement, Moody’s Benchmarks and Servicing. She informed the Board that the General Fund budget amendment approved in July is not reflected in this quarters report. Hickman then reviewed the monthly and quarterly graphs. Motion to approve the 6/30/18 Quarterly Financial Statement Review as presented: McMillan. Second: Reyes. Vote: 5-1 (Eichenberg abstained).

2 6/30/18 Quarterly Investment Review (Kathy Keeler). Keeler presented the Quarterly Investment Review packet behind tab two which will be included in the official board packet. Keeler informed the Board the Ad Hoc Investment Committee met on August 7, 2018. Kathy reviewed the General Fund Investment Compliance Report, the Portfolio Summary-Short & Intermediate Term Investments, the Portfolio Summary-Long Term State Investment Council Investments, the Portfolio Summary-Housing Trust Fund and the General Fund Investment Portfolio Metrics highlighting the asset class balances and yields/rates of returns. Keeler explained the structure of a bond ladder. The Board requested that staff report purchase prices and coupon rates for new bond ladder purchases as part of the investment report in the future. Chair Burt asked a review of calculation on page 28 – Year to Date Rate of Return 2.22%; Keeler stated she would review and get back to the Board.

MFA Regular Board Meeting Minutes August 15, 2018 Page 2

Motion to approve the June 30, 2018 Quarterly Investment Review as presented: Smith. Second: Reyes. Vote: 6 - 0.

3 Next Home Program Policy Revisions (Jeff Payne). Payne began his presentation by stating that MFA Staff requests approval of revisions to the Next Home program and new down payment assistance (“DPA”) second mortgage program called Next Down to be used in conjunction with the Next Home program. These changes are intended to improve the long term viability of the Next Home program and allow MFA to offer more competitive rates on Next Home first mortgages. Payne reviewed the background, discussion information and proposed loan terms provided in the memo behind tab three which will be made a part of the official board packet. A lengthy discussion ensued regarding the changes primarily in relation to the reduction in DPA assistance from 3% to 2.5. McMillan moved to approve the changes to the Next Home policy as presented and to approve the new program policy for the Next Down program with the following change to page two of the Next Down Program Policy under Maximum Loan Amount: The maximum loan amount shall be no more than three percent (3.00%) of the Next Home loan balance. Second: Reyes. Vote: 6-0.

Eichenberg left the meeting 11:14 a.m. 4 Capital Magnet Fund Grant Application (Monica Abeita). Abeita began by requesting the Boards approval

to allow MFA to apply for up to $3 million dollars to the Capital Magnet Fund (CMF), U.S. Department of Treasury, for an affordable housing fund to be used as grant gap funding for difficult to develop low-income housing tax credit (LIHTC) projects. She reminded the Board MFA applied and was successfully awarded its first CMF grant to help provide down payment assistance for $3.6 million. She further explained that due to MFA’s ongoing ramp-up for use of the FY 2017 CMF grant for homeownership, MFA has determined that it will not apply for additional money for down payment assistance or homeownership purposes in the FY 2018 round. Motion to approve the Capital Magnet Fund grant application as presented: Reyes. Second: Malavé. Vote: 5 - 0.

Contracted Services/Credit Committee& Housing Trust Fund Committee 5 Approval of 2018 HOME Rehab Request for Proposals (RFP) (Troy Cucchiara). Cucchiara began his

presentation by informing the Board that the purpose of the program is to provide funding for the rehabilitation of homes occupied by eligible low-income homeowners in order to bring their homes back to code and meet safety and habitability standards. MFA allocates a portion of the Federal HOME Investment Partnerships Program (”HOME”) funds to the HOME Rehabilitation Program. The estimated HOME funding available for the 2018 HOME Rehabilitation Program is $3,000,000. MFA also received $60,250 in Community Development Block Grant (CDBG) funding which is administered by the NM State Department of Finance (DFA).

Eichenberg returned 11:21 a.m. The CDBG funding will be used as leverage funding for 10 homes which must be located within the Colonias. Total funding for the program is $3,060,250 and will enable rehabilitation for approximately 46 homes. A block grant will be awarded to service providers based on the outcome of the responses to the RFP. Cucchiara further explained that offerors must meet the minimum qualifications and requirements which are listed in the memo located behind tab five and will be made a part of the official board packet. He also reviewed the scoring criteria and timeline. Motion to approve the 2018 HOME Rehab Request for Proposals as presented: Van Dyke. Second: McMillan. Vote: 6-0.

6 RFP Award or Purchase of Affordable Housing Rental Properties in Clayton, NM (Christi Wheelock).

Wheelock began her presentation by reminding the Board that the RFP for Purchase of Affordable Housing Rental Properties in Clayton was approved by the Board at the May 2018 meeting. No proposals were received by the deadline. An extension to the RFP was granted by the Policy Committee and MFA reissued the RFP on June 27, 2018 with a deadline of July 5, 2018. On July 2, 2018 a proposal was received at MFA from Golden Spread Rural Frontier Coalition. As this was the only proposal that was reasonably likely to be selected, we worked with the respondent to revise their proposal prior to award, for purposes of obtaining the final and best offer. Staff recommends approval for the sale and transfer of the Clayton 5 to Golden Spread Rural Frontier Coalition, as this is in the best interest of MFA due to the ability and local presence of Golden Spread whom has the experience to manage the urgent need for repairs both in the occupied and unoccupied homes. Golden

MFA Regular Board Meeting Minutes August 15, 2018 Page 3

Spread is committed to the preservation of Affordable Housing, has the affordable housing experience to comply with Land Use Restrictions Agreements and the financial means to provide repairs and rehabilitation to maintain habitability requirements for UPCS. Motion to approve the RFP Award or Purchase of Affordable Housing Rental Properties in Clayton, NM to Golden Spread as recommended: Reyes. Second: Malavé. Vote: 6-0.

Other Treasurer Eichenberg recused himself from the three bond resolutions, excusing himself from the meeting for discussion and voting on these three resolutions. Member Eichenberg did not participate in discussions or vote on these three bond resolutions. 7 J.L. Gray NM South 2017 LLLP Bond Resolution- Rio Mimbres I - II, Series A and B (Shawn Colbert).

Colbert began her presentation by informing the Board that the Developer Karen Buckland, Community Preservation Partners known as CPP a subsidiary of WNC and Bobby Griffith, CFO of JL Gray Company, Inc. are present and available to answer questions. Colbert stated that items 8 & 9 mirror this item in that they are all existing LIHTC units and are eligible for the qualified contract process. Colbert further informed the Board that staff requests approval of the attached Bond Resolution for JLG NM South Apartment Projects- Rio Mimbres I - II in order to pursue issuance of up to $2.9mm in tax exempt bonds that are expected to close in late September, 2018. Bond proceeds will fund the completion of the acquisition and rehabilitation of 60 units located on two contiguous sites in Deming, NM. Approval of this Bond Resolution will result in these units remaining affordable for an additional 50 years. Motion to approve the J.L. Gray NM South 2017 LLLP Bond Resolution- Rio Mimbres I - II, Series A and B as presented: Van Dyke. Second: Malavé. Vote: 5-0 (Eichenberg recused).

8 J.L. Gray NM South 2017 LLLP Bond Resolution - Columbus Apartments, Series A and B (Shawn Colbert). Colbert moved onto the next resolution stating that staff requests approval of the attached Bond Resolution for JLG NM South Apartment Projects- Columbus Apartments in order to pursue issuance of up to $550,000 in tax exempt bonds, which bonds are expected to close in late September, 2018. Bond proceeds will fund the completion of the acquisition and rehabilitation of 24 units located in the town of Columbus, NM. Approval of this Bond Resolution will result in these units remaining affordable for an additional 50 years. Motion to approve J.L. Gray NM South 2017 LLLP Bond Resolution - Columbus Apartments, Series A and B as presented: Malavé. Second: Smith. Vote: 5-0 (Eichenberg recused).

9 J.L. Gray NM South 2017 LLLP Bond Resolution - Franklin Vista I – V, Series A and B (Shawn Colbert). Colbert made a final request of the Board for the third Resolution stating that staff requests approval of the attached Bond Resolution for JLG NM South Apartment Projects- Franklin Vista I - V in order to pursue issuance of up to $5.55mm in tax exempt bonds that are expected to close in late September, 2018. Bond proceeds will fund the completion of the acquisition and rehabilitation of 136 units located at five contiguous sites in the town of Anthony, NM. Approval of this Bond Resolution will result in these units remaining affordable for an additional 50 years. Motion to approve the J.L. Gray NM South 2017 LLLP Bond Resolution - Franklin Vista I – V, Series A and B as presented: Malavé. Second: Smith. Vote: 5-0 (Eichenberg recused).

Other Board Items - Information Only 10 Questions were asked of staff regarding the Staff Action Report - Emergency Procurement for MFA Legal

Services. MFA was advised that Attorney under current contract; Weinstein & Riley PA can no longer provide legal services on MFA Down Payment Assistance second mortgage in which they represent the plaintiff. MFA will complete the RFP process and procure three firms to represent MFA in order to avoid this occurrence in the future. The RFP will come to the Board for approval in September.

Staff Action Requiring Notice to Board FY 2018 Q3 Strategic Plan Dashboard 2018 Series B Single Family Bond Pricing Summary

MFA Regular Board Meeting Minutes August 15, 2018 Page 4 Monthly Reports - No Action Required 11 There were no questions asked of staff.

Communications Department Reports Monthly Reports - No Action Required 12 There were no questions asked of staff.

Quarterly Board Report Announcements and Adjournment - Confirmation of Upcoming Board Meetings. Chair Burt informed the Board that the next Board of Directors meeting will be held on September 19, 2018 at the offices of the MFA. There being no further business the meeting was adjourned at 11:50 a.m. Approved: September 19, 2018 Chair, Dennis Burt Secretary, Jay Czar

NEW MEXICO MORTGAGE FINANCE AUTHORITY MFA Board of Directors Retreat

August 15-16, 2018 Sandia Resort, Eagle Room

30 Rainbow Road NE, Albuquerque NM

Chair Burt convened the Retreat at 12:17 p.m. on August 15, 2018. Members present: Chair Dennis Burt, Angel Reyes, Sally Malavé (designee for Attorney General Hector Balderas), Treasurer Tim Eichenberg, Mark VanDyke (designee for Lieutenant Governor John Sanchez) and Randy McMillan. Absent: Steven Smith. Day 2 – Same members present. MFA staff in attendance included: Jay Czar, Gina Hickman, Izzy Hernandez, Dolores Deer, Yvonne Segovia, Shawn Colbert, Leann Kemp, Joseph Navarrete, Jeff Payne, Rose Baca-Quesada, Monica Abeita, and Sandra Marez. General Counsel - Josh Allison. 2nd day – Rose Baca-Quesada was not in attendance. Guests and additional staff included will be listed in the minutes with the topic they presented. On Wednesday, August 15, 2018 the Board of Directors of the New Mexico Mortgage Finance Authority (MFA) conducted its annual Board Retreat at the Sandia Resort - Eagle Room, located at 30 Rainbow Road NE, Albuquerque NM to discuss MFA’s accomplishments, programs, housing needs and related topics. No action was taken by the Board on any items during the retreat. Chair Burt opened the retreat by thanking staff and the board members for their attendance as well as their time and commitment. He began by reflecting on what he’s learned at these events, including MFA’s servicing expansion, how MFA is in the top running for the PBCA contract, the $400 million we’ve generated in mortgage loans this year, and all of the Low Income Housing Tax Credits and funds we’ve handled for the federal government. We are helping to solve housing problems. We need to start letting our community know about these things. When he tells people what MFA does, people want to know why we don’t talk about organizations like MFA that do things well. Chair Burt stated he is proud to work with all the people here and all the people on the Board. He looks forward to another great year. Czar made a few opening remarks beginning with thanking staff, including those back at the office who worked on this retreat. Staff wants to make it the best we can for the Board. Every year it gets better. We can’t control all the problems, but we can control housing and affordable housing. We can take disadvantages and replace them with advantages. Every time we have a ribbon cutting like we just did at Sterling Downtown, we know that 80 more families will have safe, affordable housing. Czar thanked the board members for their commitment, advice and investment on this Board. The Board represents MFA wherever they go. We appreciate that. The following topics were presented on day one of the MFA Board of Directors Retreat and will be made a part of the official board retreat packet. Our Journey Together and the Road Ahead (Jay Czar). Czar reflected on MFA’s accomplishments during the past eight years, which included the following total housing dollars produced, total additional economic impact, total Housing Opportunity Fund expenditures and households Benefitted. He commented on the contributions from the Board in their tenure. He further stated that we have been on a journey with this Board for almost eight years. During that time, we have helped 34,189 households with an average of 2.7 people in each family. Czar spoke of the new and evolving challenges that lie ahead and how

MFA Board Retreat Meeting Minutes August 15-16, 2018 Page 2 leadership from the Board of Directors continues to move us forward. He introduced our next speaker Brian Sanderoff, President, Research & Polling Inc. New Mexico Demographic and Political Trends (Brian Sanderoff, President, Research & Polling Inc.). Sanderoff’s presentation explored changes in demographic and political trends and what they mean for New Mexico. Leveling the Playing Field: Addressing Disparate Housing Needs Across the State – (Monica Abeita, Laura Chavez). Increasingly, housing needs in New Mexico are diverging based on the growth potential of communities and their ability to attract investment. After reviewing the assessment provided, the Board was informed that this information will be used to help communities and governments with affordable housing plans and ordinances by providing them with some base data. Discussion ensued in what MFA and our partners can do to provide affordable housing opportunities for all New Mexicans, to ensure that small, rural communities are not left behind. Tribal Housing Roundtable – (Marvin Ginn and Rose Marquez, Native Community Finance; Isaac Perez, San Felipe Pueblo; Floyd Tortalita, Acoma Housing Authority). With the second highest percentage of Native Americans in the U.S., it is fitting that New Mexico is a national leader in tribal housing. This panel of leaders walked us through the breadth of tribal housing initiatives, including mortgage financing, the New Mexico Tribal Homeownership Coalition, native Community Development Financial Institutions, innovative development approaches and groundbreaking rental projects on tribal lands. Affordable Housing Priorities in a Changing Federal Landscape (Stockton Williams, Executive Director, NCSHA). Federal action affects almost every aspect of the housing market, presenting an ever-changing environment of opportunities and occasional threats. This presentation provided insights into the latest developments in Washington that could impact MFA and the communities it serves. Thursday, August 16 Staff continued with day two of the presentations which will be made a part of the official board retreat packet: Organizational Impacts of Servicing Expansion (Gina Hickman, Rene Acuna, Theresa Laredo-Garcia, Olivia Martinez, Jeff Payne, Robyn Powell, Anita Rehm-Racicot, Yvonne Segovia). Two years after implementation of the first phase of servicing expansion, staff discussed outcomes, financial impacts, and plans for the future. Trends, Challenges and Opportunities for Residential Development (Garret Price, Price Land & Development Group). Price addressed current dynamics of residential development and its impact on housing supply trends and affordability. Development: At What Cost? Moderator: Shawn Colbert (Jim Tofel, Managing Member, TofelDent Construction; Ed Romero, Executive Director, Santa Fe Civic Housing Authority; Robin Pelton, Project Manager, New Mexico Division, Chelsea Investment Corp.). The experienced panel informed the Board of what’s happening in the construction industry and how it affects development costs, including decisions made in structuring a LIHTC project. They explored the differences in assembling projects for non-profit/public entities and for profit/private entities, and between 9% and 4% projects in regard to costs and/or deal structuring. The panelists also shared lessons learned along the way.

MFA Board Retreat Meeting Minutes August 15-16, 2018 Page 3 HopeWorks (Formerly St. Martin’s) Presentation (Greg Morris, Executive Director, HopeWorks). Morris informed the Board that HopeWorks has grown to become the largest provider of services for people experiencing or at risk of homelessness in Albuquerque. He also discussed the challenges, successes and rewards of providing a wide array of services and shared HopeWorks vision. Board Retreat Discussion and Wrap-Up (Jay Czar). Czar thanked the Board, stating MFA can’t do what it does without you. The Board has an impact through conversations and through constructive criticisms. We’re never going to make quantum leaps in this business. It will always be incremental steps. That’s what we do through our meetings and travels around the state. We have a lot of work to do, and we are enthusiastic, motivated and inspired. Czar thanked the Board, the staff and everyone back at the office for making MFA what it is.

Board Retreat Discussion and Wrap-Up (Chair Dennis Burt). Chair Burt concluded by thanking staff for putting together a fabulous retreat. The materials and presentations were illustrative of what we’ve been trying to do. Burt stated he has been in business for 50 years and has never seen an environment that changes quicker than this one. We have to ask if we’re creating a sustainable biz model. Even gigantic businesses are now gone: Sears, Polaroid, and Kmart - even at Calibers we’re changing because the Internet has changed everything. What will tomorrow look like for us in this business? Our challenge is to continually look forward to the things that will affect our business model and stay vigilant and change in order to remain viable. We have an amazing team and an amazing intellect that runs this team. Burt stated he enjoys very much what we’ve done these last two days. He asked fellow board members for their feedback on the retreat. Some of the comments made included the following statements:

• Overwhelmed by the two days of information that the staff has provided. • When I travel around New Mexico, I’m impressed to see the things we’ve accomplished and done and the

results of what we’ve approved over the last couple of years. • Thank you for what you do. I’m grateful for all the time and energy and planning that goes into these

retreats. • I’m happy with all the content of this retreat — it helps connect the dots in a lot of ways. • Staff comes together to meet the mission and to take care of one another. You have created careers and

opportunities for each other. It’s a meaningful and sincere relationship that you all have. We have not just what people want but what they need.

• Given the current environment, in some ways it will only get harder. • Having a group of people like this is really inspiring. What a great lineup! I’ve learned so much. And it

helps me not only as a board member, but in my job. • Like the others, I am so impressed with how you all care for each other. I’m very happy to be on this

Board. There being no further business, the meeting was adjourned at 3:00 p.m. Approved: September 19, 2018

Chair, Dennis Burt Secretary, Jay Czar

New Mexico Mortgage Finance Authority

Low Income Housing Tax Credit Control Procedures

Executive Summary

July 2018

1


Low Income Housing Tax Credit Control Procedures Executive Summary


Board of Directors

We performed the internal audit services described below to assist New Mexico Mortgage

Finance Authority (MFA) in evaluating the compliance of the organization’s Low Income

Housing Tax Credit (LIHTC) control procedures.

PURPOSE AND OBJECTIVES

Our internal audit focused on evaluating the internal processes surrounding the LIHTC

application, scoring process, and monitoring to determine if applications were completed in

accordance with internal policies and procedures, relevant IRS Code sections and Housing and

Urban Development (HUD) guidance.

SUMMARY OF PROCEDURES

In order to gain an understanding of the LIHTC process, we read relevant sections of the 2018

MFA Qualified Allocation Plan (QAP), relevant sections of the Internal Revenue Code Section

42, Form 8823 Guidebook and the Housing and Urban Development (HUD) UPC Guidelines

Checklist. Additionally, we obtained an understanding of the Application Checklist development

and review processes. Using this information, we determined if:

The QAP contained significant elements of IRS Code Section 42,

9% tax credit applications submitted to MFA contained all items required by the Application

Checklist and were appropriately reviewed,

Sufficient documentation existed to support application point deductions and if deficiencies

were communicated to the Super Policy Committee and developers within the appropriate

time-limit,

Initial site and resident income inspections were performed in accordance with HUD and IRS

guidelines; and,

Project Owners submitted annual audited financial statements and Owner Certifications

timely.

2

SUMMARY OF RESULTS

During the audit, we found that most areas tested appeared to have functioning internal controls

and established procedures were followed. The Application Checklists utilized during the

application process appeared to be followed and all necessary documentation was obtained for

each application tested. The scoring process appeared to be functioning appropriately and

applications were awarded to the highest scoring applicants in each category. Scoring

deficiencies, where applicable, were documented and appropriately communicated to the Policy

Committee, General Counsel and Developer. In addition, the QAP appeared to be developed in

accordance with Section 42 requirements of the IRS Code.

There were no reportable observations identified during the course of the audit. However, we did

identify certain process improvements for consideration.

* * * * *

Further detail of our purpose, objectives, procedures, and recommendations is included in the full

internal audit report.

Albuquerque, New Mexico

August 27, 2018


Low Income Housing Tax Credits Project

August 2018



Table of Contents

Page

Introduction 1

Purpose and Objectives 1

Scope and Procedures Performed 1

Results and Recommendations 3

Future Approach 6

1



Report


Board of Directors

INTRODUCTION

The New Mexico Mortgage Finance Authority (MFA) Board engaged REDW to develop an

audit program that could be used for current and future Low Income Housing Tax Credit

(LIHTC) projects to assess for specific risks related to the appearance of collusion, inflated costs,

or related party transactions between Developers, General Contractors and subcontractors. This

request was triggered by the discovery of fraud in the Florida Housing LIHTC programs where

millions of dollars in federal tax credit subsidies were stolen when a Developer inflated

construction contracts. REDW met with MFA management to discuss the internal processes

surrounding the LIHTC application and selection process, as well as to develop an understanding

of the documentation requirements for the program. From this information, an audit program was

developed and REDW attempted to execute this audit program on a small sample of past LIHTC

projects that were either completed or in process as of 2018.

PURPOSE AND OBJECTIVES

This engagement focused on evaluating the internal controls surrounding the LIHTC program to

assess if past projects conformed to selected Qualified Allocation Plan (QAP) requirements,

project costs reported during the Carryover Certification and Final Certification processes were

fully supported and appeared reasonable, and all related parties were properly disclosed.

Additionally, we evaluated the 2018 QAP to determine if any additions or clarifying language

could be added to reduce difficulties encountered from less stringent QAP requirements in

previous years.

SCOPE AND PROCEDURES PERFORMED

Interviews and Policy Understanding

In order to gain an understanding of the processes and operations, we read the applicable

portions of the following:

MFA Qualified Allocation Plans 2014 – 2018

Internal Revenue Code Section 42, Low-Income Housing Credit

2

In order to gain an understanding of the processes and operations, we also interviewed the

following individuals:

Gina Hickman, MFA Deputy Director of Finance

Susan Biernacki, J.D., MFA Tax Credit Program Manager

Shawn M. Colbert, CPM, COS MFA Director of Housing Development

Holly Barela, CPA, YES Housing Senior Vice President/CFO

Brian Gerritz, Pavilion Construction, President

Justin Evans, CIA, CFE, CPM, Florida Housing Director of Auditing

Melissa Levy, Florida Housing Auditor

In addition, to gain an understanding of the fraud issue, we watched:

Frontline – Poverty, Politics and Profit (PBS)

We performed the following testwork:

Using the listing of LIHTC projects from 2001 through 2017 REDW randomly selected two

projects including one project from 2015 in the carryover period and one finalized project from

2014. We performed the following steps:

1) Carryover Period Project

A. We assessed if the Carryover Allocation Package was complete. This included, but was

not limited to:

1. Completed project plans, specifications and construction documents.

2. Evidence that project basis exceeded 10% of the total anticipated project costs via

an Independent Auditors Report and the Developers Cost Certification.

B. We agreed the Developers general ledger detail to the Independent Auditors Report and

selected a judgmental sample of 12 of the largest expenditures. For each expenditure

tested, we requested an invoice and cancelled check, or other evidence of payment, to

assess if the costs appeared to be properly supported and the payee name on the check

agreed to the invoice or statement. Because this project was in a carryforward stage,

many of the transactions tested related to banking or loan fees; thus, the payment

evidence was a closing statement or other banking document versus a vendor invoice.

C. We assessed if related party relationships appeared to exist with any of the

companies/individuals associated with the project through performing online

vendor/company research.

2) Finalized Project

A. Assessed if the Final Allocation Package was complete. This included, but was not

limited to:

1. All items on the Application Checklist were present.

2. Evidence that all final costs were audited and the Independent Auditor’s Report

provided a clean opinion. In the 2014 QAP, a Cost Certification at the General

Contractor level was not required; certifications were only completed at the

Developer level.

3

3. Evidence that a robust Request for Proposal (RFP) and proposal process was used

for the selection of the General Contractor and subcontractors.

B. We materially agreed the Developers general ledger detail to the Independent Auditors

Report and selected a random sample of 12 expenditures to determine if the costs were

supported by an underlying invoice and/or other document, such as a loan document,

and the payee name on the check agreed to the invoice or statement.

C. Seven of the 12 expenditures tested at the Developer level were monthly payments to

the General Contractor that were supported by a monthly Schedule of Values

Continuation Sheet. Using these monthly statements, we judgmentally selected 20

expenditures that were identified in the “Expenses Incurred in this Period” column for

detailed testing.

1. For each expense selected, we requested invoices, lien release waivers, and copies

of the cancelled checks from the General Contractor. We attempted to tie the

amounts paid to the subcontractors, for the work performed to the Schedule of

Values Continuation Sheet.

D. For all subcontractors identified in the sample of 20 expenditures, we assessed if related

party relationships existed with any of the companies/individuals associated to the

project.

3) Additional Procedure

We performed phone interviews with individuals at Florida Housing to gain an

understanding of how fraud was discovered in the Florida projects, and the measures

they implemented to reduce the chances of it happening again.

RESULTS AND RECOMMENDATIONS

Results:

1) Carryover Period Project

A. The Carryover Period Project tested utilized the 2015 QAP. Because all expenditures at

the Carryover certification period related to development costs, bank fees etc. (i.e. not

construction related) all amounts could be easily traced to an invoice or other official

banking document. Further, the payees and amounts on the cancelled checks also agreed

without exception. REDW did not identify any undisclosed related parties; however,

our searches were limited to what information was available on public websites such as

the Secretary of State website and vendor websites.

2) Finalized Project

A. The Finalized Project utilized the 2014 QAP, which lacked detailed guidance and

requirements necessary to perform many of the audit steps initially planned for testing

detailed construction costs. The Developer and General Contractor, for the project

tested, were either unable or unwilling to provide additional documentation beyond

what the QAP required, which limited much of the testing. REDW identified the

following areas for improvement:

1. The 2014 QAP did not require cost certifications be completed at the General

Contractor level. As a result, REDW was unable to:

4

i. Determine if any one subcontractor was used excessively (i.e. more than 20%

of total costs), which may be an indicator of collusion, or provide increased

opportunities for inflated contracts to occur.

ii. Assess if any one subcontractor was over/under paid based on bid amounts.

iii. Tie out total costs of the project to a detailed expense listing.

2. Invoices provided by the subcontractors lacked adequate information on materials

and labor used and/or purchased to determine if the pricing appeared reasonable

and/or was at market rates. Many of the invoices inspected appeared to be from

canned accounting systems and would only denote the total amount and a brief

description of the related work performed. Without details of quantity, material

used or work performed REDW was unable to assess if pricing was reasonable.

3. Subcontractor bid submissions, in response to the construction RFP advertised by

the General Contractor, were not retained. Bid requests were solicited through an

online list-serve website called Prime Bid, but REDW was unable to substantiate

how many bids were received for each area, or if the lowest bid was selected or if

selecting another higher bidder appeared to be justified. Additionally, the final

project selected was an unusual instance where the original General Contractor

selected was subsequently dismissed. It was unclear of the documentation

requirements necessary when switching General Contractor’s mid-project.

Recommendations:

1) Qualified Allocation Plan

A. Based on reading the 2018 QAP, MFA has made significant improvements with

documentation requirements. The 2018 QAP now requires Cost Certifications be

completed at both the Developer and General Contractor levels. MFA should also

consider adding the following requirements in future QAP’s:

1. Documentation of the General Contractor Cost Certification should be required to

be submitted in an Excel format at both a detailed invoice level and at a subtotaled

level by vendor name. This will allow MFA to assess any irregularities with

individual invoice amounts and/or excess costs attributed to individual vendors

more quickly.

i. The QAP should also disclose that MFA will be performing its own audit of

costs by randomly selecting either a specified number of the largest vendors or

testing 40% of total costs. The language should include a disclaimer that an

audit may take place at any point within five years after the final cost

certification and General Contractors will be responsible for providing

documentation to support all amounts paid (including, but not limited to,

invoices, lien waivers and copies of cancelled checks etc.).

2. The QAP should restrict the use of any one subcontractor doing more than 20% of

the total project cost. If this arrangement is unavoidable due to rural location and/or

specialty work, documentation should be submitted to MFA to substantiate the

reasons, and a more comprehensive assessment of related parties should be

completed on the subcontractor and General Contractor relationship.

3. The QAP should stipulate that the subcontractor’s invoices should contain enough

information to assess cost reasonableness in relation to market prices.

5

4. The QAP should provide specific guidance on RFP and Proposal documentation

requirements. Specifically, the QAP should require bid documentation be retained

for subcontractors to substantiate the lowest bidder was selected; or, if the lowest

bidder was not selected, the reasons for the selection. Additionally, the QAP should

outline what documentation must be provided and retained in instances when key

members of a LIHTC project must be removed and/or replaced. An additional

assessment of costs and quality of material should be examined to ensure the

company change has no negative impact on the project that was initially approved.

5. MFA should consider adding a fraud hotline, and posters of the hotline number, for

each project as a QAP requirement. Based on discussions with Florida Housing, the

fraud discovered in the Florida LIHTC projects was a result of a whistleblower.

Requiring a fraud hotline and posting the number in and around the jobsite will

provide individuals working on projects a way to confidentially inform MFA of

any unusual business dealings. Because each contractor conducts its business

differently, having a hotline is an essential monitoring control.

Managements Response: Management agrees changes should be made to the QAP. Staff

will conduct an “After Action Review” with Developers and General Contractors to solicit

feedback and generate buy-in before implementing recommendations which are feasible in

the 2020 QAP. MFA’s fraud hotline will be posted at project work sites as soon as practical.

2) Related Parties

In addition to the QAP enhancements, MFA should consider increasing its work around

assessment of related parties. One of the primary ways to mitigate kickback schemes is to

assess the relationships of all companies and individuals within a transaction. All individuals

who are involved in an application (i.e. Developer, Architect, General Contractor, etc.)

should be required to sign an affidavit affirming they have no related party relationships; or,

that all related party relationships have been properly disclosed. For all projects selected for

tax credits, an analysis of companies should be conducted; including research on the

applicable Secretary of State websites, as well as searches of companies, to help ensure all

related parties have been properly disclosed. This evaluation can be completed on a

sampling basis to include the largest vendors in the project or on a judgmental basis, as long

as the reasoning is adequately documented. This is particularly important at the

subcontractor level as shell companies may be used to artificially inflate prices on goods or

services.

Managements Response: Management agrees. The requirement that all individuals

involved in the application sign a Related Party affidavit will be added to the 2019 QAP.

Those related parties will then be researched on the Secretary of State website. Staff will

further investigate processes for obtaining subcontractor level detail and establish

procedures for conducting further research to ensure related parties have been properly

disclosed.

3) Capital Needs Assessments

Lastly, MFA should consider either contracting out, or employing, an architect who will be

responsible for independently evaluating the Capital Needs Assessments (CNA’s) for

rehabilitation projects. Currently, the CNA’s are drafted by architects affiliated with the

development and provide guidance on what must be done and the timing of the activities

(i.e. within one year, five years etc.). It is unclear whether the recommendations in the CNA

6

are necessary and/or if they have missed any critical needs. This recommendation comes

from discussions held with MFA staff who are unclear of the appropriateness of the

comments made in the CNA, as MFA personnel lack the technical background to properly

evaluate the observations.

Management’s Response: Management does not agree. Staff will instead determine the

appropriate credentials, qualifications and/or certifications that will be required of the

professionals preparing the Capital Needs Assessment for rehabilitation projects. Staff will

then verify that the professional preparing the CNA meets the requirements so that the CNA

submitted can be relied upon.

FUTURE AUDIT APPROACH

Many of the recommendations presented above will require additions to future QAP’s and

testing will be contingent on projects being finalized that utilized the 2018 QAP requirements.

Below are some limited testing and oversight procedures that could be done in the interim for the

LIHTC projects. These procedures are contingent on cooperation from Developers and General

Contractors.

Test a sample of costs from the Developer general ledger detail to ensure expenses are

properly supported and agree to the Independent Auditor Report.

Assess projects for undisclosed related parties.

Evaluate the RFP processes at the Developer and General Contractor levels to determine if

adequate controls are in place for evaluating proposals/bids.

Determine if bid documentation at the subcontractor level is adequately retained and

selection criteria were properly documented.

Evaluate the advertising and effectiveness of the fraud hotline marketing for current

projects.

* * * * *

This report is intended solely for the information and use of MFA management, the finance

committee, members of the Board and others within the organization. If additional procedures

had been performed, other matters might have come to our attention that would have been

reported to you.

We sincerely appreciate the courtesy extended to our personnel.

Albuquerque, New Mexico

September 4, 2018

Production Statistics Actual 9/30/09 through 9/30/17

and Projected 9/30/18 and 9/30/19

Production & Financial Highlights

1

2009 2010 2011 2012 2014 2015 2016 2017 2018

2010 HISTORICAL LOW MORTGAGE RATES: •High Single Family Prepayment Activity (-2013) Assets Managed, Revenue •Historical low mortgage rates (2010-2018) Production/Assets Managed, Revenue

2012 FEDERAL BUDGET REDUCTIONS: •High Multi-family loan payoffs Assets Managed, Revenue •HUD HOME funding reductions (-2014) Production/Assets Managed, Revenue •DOE Weatherization Assistance Program funding reductions (-2013) Production/Assets Managed, Revenue •Increase in rental demand (-2016) Production/Assets Managed, Revenue •HUD Section 8 Project Based Contract Administration (PBCA) program scope changes (-2016) Revenue, Expenses

2014 INNOVATION & NEW RESOURCES: • Decrease in Single Family Prepayment Activity (-2018)

Revenue, Assets Managed • Ventana Fund Contribution (-2018) Expense,

Production for NM •Small Business Investment Council loan funding for Housing Opportunity Fund (-2018) Production/Assets Managed, Revenue

2011 INNOVATION & NEW RESOURCES: •Wells Fargo & USDA-Rural Development loan funding for Housing Opportunity Fund Production/Assets Managed, Revenue

IMPACT LEGEND: Red : Negative Impact Green: Positive Impact

2015 STABILIZED HOUSING MARKET & ECONOMY: •Increase in Single Family Mortgage Production (-2018) Revenue, Production/Assets Managed •40th Anniversary Celebration

2013 INNOVATION & NEW RESOURCES : •To Be Announced (TBA) Single Family Loan Execution (-2018) Production, Revenue

2016 PROGRAM EXPANSION: • HUD Section 8 PBCA Management Occupancy Reviews

reinstated (-2018) Revenue, Expenses • Servicing Expansion implemented-Milestone 1 Revenue,

Expenses Assets Managed • National Housing Trust Fund Program (-2018) Revenue,

Expenses Production/Assets Managed • Increase in Qualified Contracts (-2018) Revenue,

Expenses, Assets Managed

2017 MANAGING GROWTH & OPPORTUNITY: • Record year in Single Family Mortgage

Production (-2018) Revenue, Production/Assets Managed

• First full year of Servicing Expansion implementation Revenue, Expenses, Assets Managed

• Selected as SW Regional Lead for HUD PBCA Procurement

• Secured $500k of CDBG funding Revenue, Expenses, Assets Managed

2018 POSITIVE MARKET TRENDS: •Third record year of Single Family Mortgage Production Revenue, Production/Assets Managed •New Funding from Capital Magnet Fund Revenue, Production/Assets Managed, Expenses •Stabilized/increasing federal funding Revenue, Production/Assets Managed •Viable Single Family bonding execution Revenue, Production/Assets Managed

2013

2009 FEDERAL STIMULUS: •ARRA Funds for Weatherization Assistance Program, Tax Credit Assistance Program, Tax Credit Exchange Program, Homelessness Prevention & Rapid Rehousing Program (-2012) Production/Assets Managed, Revenue •Tax Credit Loan Program Production/Assets Managed, Revenue •New Issuance Bond Program (-2011) Production/Assets Managed, Revenue

Assets Managed: Average Financial Assets

vs. Average Assets Under Management FY 2009-2019

2

0

500

1,000

1,500

2,000

2,500

3,000

3,500

'09 '10 '11 '12 '13 '14 15 16 '17 '18Proj

'19Proj

$ m

illio

ns

Average Financial AssetsAssets Under Management

Financial Data: General Fund Excess Revenue Over Expenses vs.

Combined Excess Revenue Over Expenses FY 2009-2019

3

0

2

4

6

8

10

12

14

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18Proj

'19Proj

$ m

illio

ns

GF Excess Revenue Combined Excess Revenue

Financial Data:

General Fund Revenue Analysis 2012-2019 (Projected)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

2012 2013 2014 2015 2016 2017 2018(Proj)

2019(Proj)

Other Income(2%)

Housing ProgramIncome (6%)

Servicing Income( 13%)

Interest-Investments(8%)Interest-Loans(25%)

Admin Fees(46%)

$ th

ousa

nds

4

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

2012 2013 2014 2015 2016 2017 2018(Proj)

2019(Proj)

Admin Expenses(90%)

Provision for LoanLoss (5%)

Int. Expense ( 2%)

Other Expense (3%)

$ th

ousa

nds

Financial Data:

General Fund Expenditure Summary 2012-2019 (Projected)

5

Expenditure Category

• Compensation • Travel & Public Information • Office Expenses • Other Operating Expenses Contractual Services and Direct Servicing

• Non-Operating Expenses Training & Technical Assistance, Program

Development, Capacity Building • Capital and Servicing • Non-Cash

% of Total Expenses 39% 2% 5% 28%

2% 16%

8%

Financial Data: Detailed Administrative Expense Breakout

General Fund (FY19 Budget)

6

Financial Data: Loan Loss Provision Allowance vs Annual Expense and Annual Write Offs

FY 2009 - 2019

7

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Proj 2019 Proj

$ th

ousa

nds

Prov Exp

Allowance forLoan Loss

Write Offs

Production Data: Number of Multifamily,

Single Family 1st Mortgage and Single Family Homeowner Rehab Units FY 2009-2019

8

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18Proj

'19Proj

# U

nits

Multifamily units Single family units Homeowner rehab units

Production Data: Funds Disbursed-Federal & State Programs

FY 2009-2019

9

- 10 20 30 40 50 60 70 80 90

100

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Proj '19 Proj

$ m

illio

ns

Production Data: Funds Disbursed-Housing Opportunity Fund

FY 2009-2019

10

-

2

4

6

8

10

12

14

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18Proj

'19Proj

$ m

illio

ns

Appropriated to date: $105mm Committed to date: $156mm including repayments of $66mm = $15mm available

Production Data: TBA vs Bond Production

FY 2009 – 2019

11

0

50

100

150

200

250

300

350

400

450

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Proj 2019 Proj

$ m

illio

ns

TBA

Bond

MFA Total Housing Dollars Produced FY 2009-2019

12

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18Proj '19Proj

$ m

illio

ns

Housing Dollars ProducedIncludes: GF Non-Operating funds disbursed; Single family loans purchased; Multifamily loans/subsidies; federal & state programs disbursed; and Housing Opportunity Fund disbursed

Economic Impact of MFA Programs FY2009 - 2019

13

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2009 2010 2011 2012 2013 2014 2015 2016 2017 Proj 2018 Proj 2019

$ m

illio

ns

Savings realized throughHousing First Model forHomeless

Local income generatedfrom new rental unitconstruction

Local income generatedfrom new SF homeconstruction

Economic impact ofexisting SF home sales

Production Statistics (10 years)($ in millions)

Budget 2018-2019

H:\Cgerwin\Budget 18-19\Production Stats19 14

Projected Budget9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016 9/30/2017 9/30/2018 9/30/2019

FINANCIAL DATAAverage Financial Assets ($) 1,663.443 1,669.110 1,556.397 1,387.923 1,229.385 1,090.640 994.829 961.381 938.573 953.006 1,034.690$ Change 18.161 5.667 (112.713) (168.474) (158.538) (138.746) (95.811) (33.448) (22.809) 14.434 81.684% Change 1.10% 0.34% -6.75% -10.82% -11.42% -11.29% -8.78% -3.36% -2.37% 1.54% 8.57%

Average Assets Under Management ($) 2,805.001 3,009.226 2,910.113 2,770.325 2,687.314 2,583.285 2,564.577 2,596.522 2,876.475 3,379.216 3,705.442$ Change 121.907 204.225 (99.113) (139.788) (83.011) (104.029) (18.708) 31.945 279.953 502.741 326.226% Change 4.54% 7.28% -3.29% -4.80% -3.00% -3.87% -0.72% 1.25% 10.78% 17.48% 9.65%

Combined Excess Revenue over Expenses ($) 1.485 6.643 4.115 8.989 7.471 7.897 4.806 9.352 12.259 10.603 9.199$ Change (7.313) 5.158 (2.528) 4.874 (1.518) 0.426 (3.092) 4.546 2.906 (1.655) (1.405)% Change -83.12% 347.34% -38.05% 118.44% -16.89% 5.71% -39.15% 94.60% 31.08% -13.50% -13.25%

General Fund Excess Revenue Over Expenses ($) 1.802 4.653 3.439 4.549 3.234 5.006 3.238 7.686 9.732 8.737 4.610$ Change (2.346) 2.852 (1.214) 1.110 (1.315) 1.771 (1.768) 4.448 2.046 (0.995) (4.128)% Change -56.57% 158.29% -26.09% 32.26% -28.90% 54.77% -35.31% 137.37% 26.62% -10.22% -47.24%

General Fund Revenue Actual ($) 10.828 13.470 12.689 13.559 12.278 15.238 13.173 18.209 22.680 23.907 21.619$ Change (1.084) 2.642 (0.781) 0.870 (1.281) 2.960 (2.065) 5.036 4.470 1.227 (2.288)% Change -9.10% 24.40% -5.80% 6.86% -9.45% 24.11% -13.55% 38.23% 24.55% 5.41% -9.57%

General Fund Expenses Budget ($) 9.352 9.638 12.652 9.404 9.297 10.789 10.649 12.157 14.350 15.509 17.009$ Change 0.942 0.286 3.014 (3.248) (0.107) 1.492 (0.140) 1.508 2.193 1.159 1.500% Change 11.21% 3.06% 31.28% -25.67% -1.13% 16.04% -1.30% 14.16% 18.04% 8.07% 9.67%

General Fund Expenses Actual ($) 9.027 8.817 9.250 9.011 8.581 10.232 9.935 10.523 12.947 15.170 16.637$ Change 1.262 (0.210) 0.433 (0.239) (0.430) 1.651 (0.297) 0.588 2.424 2.222 1.467% Change 16.25% -2.33% 4.91% -2.58% -4.77% 19.24% -2.90% 5.92% 23.04% 17.16% 9.67%Percent Actual less than Budget 3.47% 8.51% 26.89% 4.18% 7.70% 5.16% 6.71% 13.44% 9.77% 2.19% 2.19%5-year average percent underbudget 10.33% 8.39% 10.47% 10.14% 10.15% 10.49% 10.13% 7.44% 8.56% 7.45% 7.89%

General Fund Operating Expenses ($) 8.087 7.372 7.656 7.353 7.153 7.494 7.737 8.466 11.554 13.552 14.997$ Change 1.181 (0.715) 0.284 (0.303) (0.200) 0.341 0.243 0.729 3.088 1.998 1.445% Change 17.10% -8.84% 3.85% -3.96% -2.72% 4.77% 3.25% 9.42% 36.47% 17.30% 10.66%

Funds Disbursed GF Non-Operating ($) 0.321 0.730 0.709 0.585 0.476 1.920 1.479 0.965 0.793 0.787 0.450$ Change 0.014 0.409 (0.021) (0.124) (0.109) 1.444 (0.441) (0.514) (0.172) (0.006) (0.337)% Change 4.56% 127.41% -2.82% -17.53% -18.63% 303.28% -22.95% -34.76% -17.81% -0.76% -42.80%

PERSONNEL DATAEmployees

Full-time Equivalent 66.63 69.79 70.58 67.67 67.67 67.71 65.60 68.38 72.75 76.75 80.25Active 65.08 67.96 69.75 64.92 62.92 65.92 63.46 64.50 68.92 71.50 80.25

Compensation Costs ($)Salary & Benefits 4.733 5.139 5.342 4.909 4.882 5.299 5.301 5.578 6.198 6.418 7.501Incentives 0.171 0.249 0.235 0.197 0.255 0.161 0.234 0.346 0.322 0.375 0.438

Production Statistics (10 years)($ in millions)

Budget 2018-2019

H:\Cgerwin\Budget 18-19\Production Stats19 15

Projected Budget9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016 9/30/2017 9/30/2018 9/30/2019

PRODUCTION DATASingle Family 1st Mtg LoansNumber of Units Reserved (unduplicated) 2,011 1,568 1,226 1,128 1,330 1,117 1,777 2,526 2,929 3,151 2,912 Dollar of Loans Reserved 239.145 194.553 149.224 135.958 164.362 136.235 230.211 351.511 422.544 465.307 330.000Number of Units Purchased (unduplicated) 1,313 1,451 999 896 1,143 939 1,188 2,264 2,426 2,808 2,185 Dollar of Loans Purchased 161.733 180.483 123.343 106.948 141.817 114.276 153.207 307.572 348.015 413.749 300.000

Multi-Family Loans/Bonds Closed & Tax Credits AllocatedNumber of Units (unduplicated) 1,441 1,524 752 1,351 1,750 975 782 1,614 1,594 593 1,192 Dollar of Loans/Subsidies 82.651 129.612 45.177 54.763 77.762 13.939 33.184 25.966 41.092 21.895 48.934

Housing ProgramsHomeless Persons Served (#) 18,365 18,964 16,871 15,004 11,134 6,925 6,394 5,866 8,820 8,800 8,800 Single Family Homeowner Rehab (#) 2,135 2,913 2,817 2,707 1,070 1,108 978 1,444 954 1,037 1,050

Funds Disbursed ($)Federal & State Programs 42.781 89.368 81.611 57.690 47.174 42.223 44.031 42.970 43.095 49.561 50.061MFA Housing Opportunity Fund 6.237 8.741 5.032 6.496 5.814 6.804 8.625 10.908 13.014 13.898 13.025

FUNDS OBTAINED 20.052 10.920 6.265 9.524 15.076 12.601 11.319 13.271 17.864 19.666 15.420

TOTAL FAMILIES SERVED 4,889 5,888 4,568 4,954 3,963 3,022 2,948 5,322 4,974 4,438 4,427 TOTAL HOUSING DOLLARS PRODUCED 293.723 408.934 255.872 226.482 273.043 179.162 240.526 388.381 446.009 499.890 412.470

New Mexico Mortgage Finance Authority 344 Fourth St. SW, Albuquerque, NM 87102 tel. 505.843.6880 toll free 800.444.6880 housingnm.org

MEMORANDUM

TO: Board of Directors

Through: Finance Committee – September 11, 2018

Through: Policy Committee – September 4, 2018 FROM: Yvonne Segovia, Controller DATE: September 19, 2018 SUBJECT: Fiscal Year (FY) 2018-2019 General Fund Budget

Recommendation: Staff recommends approval of the budget as reflected on the attached schedules. Discussion: Attached is MFA’s General Fund proposed budget for FY 2018-2019. Revenue is projected at $21,619,000, a decrease of ($2,288,000) or (10%) under projected 9/30/18 actual and an increase of $92,000 or 0% over prior year budget. The expense budget is projected at $17,009,000, an increase of $1,839,000 or 12% over 9/30/18 projected actual and an increase of $1,500,000 or 10% over prior year budget. The FY 2018-2019 budgeted excess revenue over expenses is $4,610,000. The capital budget is $3,088,000, a decrease of ($867,000) or (22%) under projected actual and a decrease of ($800,000) or (21%) under prior year budget. The FY 2018-2019 revenue over total budget including capital items is $1,521,000. The changes are primarily a result of the implementation of the Mortgage Operations servicing expansion model, as well as the addition of three full-time equivalent (FTE) staff positions.

1

ANALYSIS OF SIGNIFICANT INCREASES (DECREASES) IN PROPOSED BUDGET TO PROJECTED ACTUAL AND PRIOR YEAR (PY) BUDGET REVENUE: DECREASE UNDER PY ACTUAL ($2,288,298) (10%); INCREASE OVER PY BUDGET $91,900 0% The decrease under prior year actual and budget is primarily a result of a reduction in To Be Announced (TBA) pool transaction fees, offset by increases in interest on the down payment assistance loan portfolio, and servicing fees. Production is estimated to be at normal levels of $300mm rather than $375mm budgeted for FY2018. In addition, TBA revenue is decreasing based on the assumption that 40% of mortgage loan production will be originated through the TBA market, as opposed to 70% in FY2018. OPERATING EXPENSES: INCREASE OVER PY ACTUAL $1,444,654 11%; INCREASE OVER PY BUDGET $1,177,807 9% Salaries: Increase over PY Actual $773,845 18%; Increase over PY Budget $417,616 9% - See Attached Organization Chart Regular merit increases are budgeted at 3.50% next year. In addition, the increase in actual and budget includes an estimate for market adjustments as well as three additional full-time equivalent (FTE) positions: Management Trainee, Accountant, Secondary Market Processor to begin 7/1/2019 and a 3/4-time Lending Assistant. Incentives: Increase over PY Actual and Budget $62,525 17% Incentives under the Incentive Compensation Plan were increased from 9% to 10%. Payroll Taxes, Employee Benefits: Increase over PY Actual $308,337 15%; Increase over PY Budget $170,992 8% The increase in taxes and benefits over actual and budget is primarily due to salary increases and increases in staffing. In addition, the increase includes an overall increase in benefit premiums of approximately 1%. Out-of-State Travel: Increase over PY Actual $69,861 55%; Increase over PY Budget $18,766 11% The increase is primarily due to attendance at partner conferences, partner visits related to servicing expansion and specialty trainings for staff. Repairs, Maintenance & Leases: Increase over PY Actual $62,003 11%; Increase over PY Budget $87,305 16% The increase over prior year actual and budget is for increases in copier maintenance and software maintenance for various systems, including Servicing Expansion software, data warehouse, SSL Certificates, Network domain name, and antivirus software.

2

Interest Expenses: Increase over PY Actual $118,468 20%; Decrease under PY Budget ($92,986) (12%) The increase over prior year actual is due to the increase in the borrowing rate anticipated for FHLB Advances to support the mortgage loan warehouse. The decrease under prior year budget is due to the decrease in mortgage loan warehouse production, which decreases the FHLB advances required. Professional Services-Program: Increase over PY Actual $86,711 302%; Increase over PY Budget $83,275 259% The increase over prior year actual and budget is primarily due to a Consolidated Plan Consultant $53,500, Capital Magnet Fund consultant $15,000, and an increase in Section 8 Rent Comparability Studies $12,500. Direct Servicing Expenses: Decrease under PY Actual ($124,200) (4%); Increase over PY Budget $404,664 14% The decrease under prior year actual is for subservicing fees and lender compensation related to the decrease in projected production from prior year levels. Production is estimated to be at normal levels of $300mm rather than $375mm budgeted for FY2018. The increase over prior year budget is due to an increasing servicing portfolio and because a budget amendment was not done for the subservicing fee line item in FY2018 to reflect record production levels. NON-OPERATING EXPENSES: DECREASE UNDER PY ACTUAL ($336,894) (43%); DECREASE UNDER PY BUDGET ($415,900) (48%) Program Training & Technical Assistance: Increase over PY Actual $73,100 56% Increase over PY Budget $3,600 2% The increase over prior year actual is primarily due to budget not spent for Affordable Housing Act housing plans and T&TA initiatives. Capacity Building & Program Development: Decrease under PY Actual ($409,994) (62%); Decrease under PY Budget ($419,500) (63%) The decrease under prior year actual and budget is primarily the contribution made to Ventana Fund in prior year, which is not budgeted to occur next year. NON-CASH EXPENSES: INCREASE OVER PY ACTUAL $790,785 114%; INCREASE OVER PY BUDGET $745,401 101% The increase over prior year actual and budget is related to an increase in the Provision for Loss expense related to implementation of the new non-performing loan policy and an increase in the amortization of mortgage servicing rights due to the growing portfolio. PURCHASED SERVICING & CAPITAL OUTLAY: DECREASE UNDER PY ACTUAL ($867,192) (22%); DECREASE UNDER PY BUDGET ($799,742) (21%) Purchased Servicing Rights: Decrease under PY Actual ($700,000) (19%); Decrease under PY Budget ($700,000) (19%)

3

The decrease under prior year actual and budget is due to the decrease in production levels. Production is estimated to be at normal levels of $300mm rather than $375mm budgeted for FY2018. Capitalized Assets: Decrease under PY Actual ($167,192) (65%); Decrease under PY Budget ($99,742) (53%) The decrease under prior year actual and budget is due to the building remodel included in FY2018. Summary: MFA’s General Fund proposed budget for FY 2018-2019 is recommended for approval. Revenue is projected at $21,619,000, a decrease of ($2,288,000) or (10%) under projected 9/30/18 actual and an increase of $92,000 or 0% over prior year budget. The expense budget is projected at $17,009,000, an increase of $1,839,000 or 12% over 9/30/18 projected actual and an increase of $1,500,000 or 10% over prior year budget. The FY 2018-2019 budgeted excess revenue over expenses is $4,610,000. The capital budget is $3,088,000, a decrease of ($867,000) or (22%) under projected actual and a decrease of ($800,000) or (21%) under prior year budget. The FY 2018-2019 revenue over total budget including capital items is $1,521,000.

4

NEW MEXICO MORTGAGE FINANCE AUTHORITYGENERAL FUND

Fiscal Year 2018-2019 Budget

Proposed Mortgage Operations Budget

2019

Proposed Operational Budget

2019 Total Proposed

Budget 2019

9/30/2018 Projected

Actual Approved Budget

2018

Inc(Decr) Budget '19 to

Actual '18

% Inc(Decr) Budget '19 to

Actual '18

Inc(Decr) Budget '19to Budget '18

% Inc(Decr) Budget '19 to

Budget '18

TOTAL PROJECTED REVENUE 7,885,634 13,733,116 21,618,750 23,907,048 21,526,850 (2,288,298) -10% 91,900 0%

PROJECTED EXPENSESCOMPENSATION

Salaries 1,261,108 3,872,730 5,133,838 4,359,993 4,716,222 773,845 18% 417,616 9%Overtime 3,271 3,558 6,829 5,227 7,403 1,603 31% (574) -8%Incentives - 437,525 437,525 375,000 375,000 62,525 17% 62,525 17%Payroll taxes, Employee Benefits 547,957 1,812,852 2,360,809 2,052,472 2,189,817 308,337 15% 170,992 8% TOTAL COMPENSATION 1,812,336 6,126,665 7,939,001 6,792,692 7,288,442 1,146,309 17% 650,559 9%

TRAVEL & PUBLIC INFORMATIONBusiness Meals Expense 950 4,260 5,210 3,693 4,775 1,517 41% 435 9%Public Information 1,150 145,855 147,005 162,792 164,959 (15,787) -10% (17,954) -11%Housing Conference - 20,000 20,000 28,148 20,000 (8,148) -29% - 0%In-State Travel 18,037 91,389 109,426 73,708 109,421 35,718 48% 5 0%Out-of-State Travel 35,933 161,281 197,214 127,354 178,448 69,861 55% 18,766 11% TOTAL TRAVEL & PUB. INFO. 56,070 422,785 478,855 395,694 477,603 83,161 21% 1,252 0%

OFFICE EXPENSESUtilities/Property Taxes 20,017 50,624 70,640 63,177 73,136 7,463 12% (2,496) -3%Leasehold Expense - (800) (800) (798) (650) (2) 0% (150) 23%Insurance, Property & Liability 1,618 124,676 126,294 122,600 122,597 3,693 3% 3,697 3%Repairs, Maintenance & Leases 163,743 457,073 620,816 558,812 533,511 62,003 11% 87,305 16%Supplies 11,928 30,168 42,097 34,883 34,883 7,214 21% 7,214 21%Postage/Express mail 39,283 717 40,000 39,681 36,782 319 1% 3,218 9%Telephone 22,911 57,943 80,853 80,000 78,862 853 1% 1,991 3%Janitorial 8,064 20,395 28,460 30,533 28,408 (2,074) -7% 52 0% TOTAL OFFICE EXPENSES 267,564 740,795 1,008,359 928,888 907,529 79,471 9% 100,830 11%

OTHER OPERATING EXPENSESInterest Expense 0 711,363 711,363 592,895 804,349 118,468 20% (92,986) -12%Dues & Periodicals 0 56,867 56,867 57,328 57,328 (461) -1% (461) -1%Education & Training 48,380 96,458 144,838 118,058 135,582 26,780 23% 9,256 7%Contractual Services 278,038 1,053,238 1,331,275 1,307,359 1,296,982 23,916 2% 34,293 3%Professional Services-Program 0 115,400 115,400 28,689 32,125 86,711 302% 83,275 259%Rebate Analysis Fees 0 0 0 0 1,500 - 0% (1,500) -100%Direct Servicing Expenses 3,188,969 7,500 3,196,469 3,320,669 2,791,805 (124,200) -4% 404,664 14%Program Expense-Other 0 14,500 14,500 10,000 25,875 4,500 45% (11,375) -44%Miscellaneous 0 0 0 0 0 - 0% - 0% TOTAL OTHER OPER. EXP. 3,515,387 2,055,325 5,570,712 5,434,999 5,145,546 135,713 2% 425,166 8%

TOTAL OPERATING EXPENSES 5,651,356 9,345,571 14,996,927 13,552,273 13,819,120 1,444,654 11% 1,177,807 9%

NON-OPERATING EXPENSESProgram Training & Technical Assistance 7,800 195,600 203,400 130,300 199,800 73,100 56% 3,600 2%Capacity Building Costs & Program Development - 246,800 246,800 656,794 666,300 (409,994) -62% (419,500) -63%

TOTAL NON-OPERATING EXPENSES 7,800 442,400 450,200 787,094 866,100 (336,894) -43% (415,900) -48%

TOTAL OPERATING & NON-OPERATING EXPENSES 5,659,156 9,787,971 15,447,127 14,339,367 14,685,220 1,107,760 8% 761,907 5%

EXPENSED ASSETS - 75,170 75,170 134,369 82,220 (59,199) -44% (7,050) -9%

NON-CASH EXPENSES 17,082 1,469,581 1,486,663 695,878 741,262 790,785 114% 745,401 101%-

TOTAL EXPENSES & NON-CASH OUTLAY 5,676,239 11,332,721 17,008,960 15,169,614 15,508,702 1,839,346 12% 1,500,258 10%

EXCESS REVENUE OVER EXPENSES 2,209,395 2,400,395 4,609,790 8,737,434 6,018,148 (4,127,644) -47% (1,408,358) -23%

PURCHASED SERVICING & CAPITAL OUTLAYPurchased Servicing Rights 3,000,000 - 3,000,000 3,700,000 3,700,000 (700,000) -19% (700,000) -19%Capitalized Assets - 88,397 88,397 255,589 188,139 (167,192) -65% (99,742) -53%

TOTAL PURCHASED SERVICING & CAPITAL OUTLAY 3,000,000 88,397 3,088,397 3,955,589 3,888,139 (867,192) -22% (799,742) -21%

TOTAL INCLUDING CAPITALIZED ITEMS (790,605) 2,311,998 1,521,393 4,781,845 2,130,009 (3,260,452) -68% (608,616) -29%

5

Proposed Organizational Chart9/19/2018

81.50

6

MEMORANDUM

To: Board of Directors

From: MFA Board Compensation Committee

Date: September 19, 2018

Re: Annual Review of Compensation and Benefits

BACKGROUND:

In October of 2012 Board Chair Dennis Burt established the MFA Board Compensation Committee. The purpose of the committee is to provide the appropriate oversight and transparency over MFA compensation and benefits. The Compensation Committee was asked to meet at least annually and to report the results of its assessment back to the full Board in conjunction with the annual General Fund budget approval. Members are as follows:

Steven Smith, MFA Board Member, Committee Chair Angel Reyes, MFA Board Vice Chair John Sanchez, Lt. Governor, State of New Mexico

ITEMS FOR DISCUSSION:

The committee met August 21, 2018 and reviewed the following:

• Benefits Summary

o Healthcare Strategy o 3rd Annual Benefits Fair

• 2018-2019 Budget Outlook • Compensation Survey Update • Incentive Compensation Plan • 401(k) Conversion Update

The Compensation Committee discussed the General Fund compensation and benefits budget outlook for FY2019. The committee also discussed medical/dental/vision strategy and changes to premiums, update on compensation study and current/future staffing levels.

RECOMMENDATION:

The Committee believes that MFA’s compensation and benefit programs and the approach to the FY2019 compensation and benefits budget are reasonable and fair. In addition the committee believes that MFA has comprehensive policies and procedures related to the compensation and benefit processes.

7


MEMORANDUM

TO: Board of Directors

Through: Finance Committee – September 11, 2018

Through: Policy Committee – September 4, 2018 FROM: Yvonne Segovia, Controller DATE: September 19, 2018 SUBJECT: FY 2018-2019 NM Affordable Housing Charitable Trust Budget

Recommendation: Staff recommends approval of the budget as reflected on the attached schedules. Background: The New Mexico Affordable Housing Charitable Trust is a legally separate trust for which the MFA Board provides oversight. Discussion: Attached is the proposed budget for the New Mexico Affordable Housing Charitable Trust for FY 2018-2019. Revenue is projected at $25,100, and the expense budget is projected at $3,000, resulting in a FY 2018-2019 budgeted excess revenue over expenses of $22,100. The expense budget includes salaries and indirect costs provided by MFA to support the non-profit organization. It also includes program and advertising funds to support the Strategic Plan initiatives.

Summary: The NM Affordable Housing Charitable Trust Budget is recommended for approval. Revenue is projected at $25,100, and the expense budget is projected at $3,000, resulting in a FY 2018-2019 budgeted excess revenue over expenses of $22,100.

Summary NMCAHT19 9/5/2018

NEW MEXICO AFFORDABLE HOUSING CHARITABLE TRUSTFiscal Year 2018-2019 Budget

Proposed Budget 2019

9/30/2018 Projected

Actual Approved

Budget 2018


Actual '18


Budget '18

TOTAL PROJECTED REVENUE 25,154 54,667 25,100 (29,513) 54

PROJECTED EXPENSESCOMPENSATION

Salaries 361 679.44 2,005 (318) (1,644) Payroll taxes, Employee Benefits 157 304.05 871 (147) (714) TOTAL COMPENSATION 518 983.49 2,876 (465) (2,358)

TRAVEL & PUBLIC INFOCustomer Relations - - - - - Public Information/Advertising - 5,000 5,000 (5,000) (5,000) TOTAL OFFICE EXPENSES - 5,000 5,000 (5,000) (5,000)

OFFICE EXPENSESUtilities/Property Taxes 6 12 35 (6) (29) Leasehold Expense 5 10 30 (5) (25) Insurance, Property & Liability 0 1 3 (0) (3) Repairs, Maintenance & Leases 2 20 16 (18) (14) Supplies 3 6 17 (3) (14) Postage/Express mail 0 5 18 (5) (18) Telephone 7 6 20 0 (13) Janitorial 2 4 14 (2) (12) TOTAL OFFICE EXPENSES 26 64 153 (38) (127)

OTHER OPERATING EXPENSESInterest Expense - 0 - (0) - Dues & Periodicals - 0 - (0) - Education & Training - 0 - (0) - Contractual Services - 90 - (90) - Professional Services-Program - 0 - (0) - Bank Charges - 4 - - Trustee Fees - 0 - (0) - Program Expense-Other 2,500 3,000 3,000 (500) (500) Miscellaneous - - - - - TOTAL OTHER OPER. EXP. 2,500 3,095 3,000 (590) (500)

TOTAL OPERATING EXPENSES 3,044 9,142 11,029 (6,094) (7,985)

NON-OPERATING EXPENSESCapacity Building & Prog Dev - - - - - TOTAL CAPACITY BUILDING COSTS - - - - - TOTAL OPERATING & NON-OPERATING EXPENSES 3,044 9,142 11,029 (6,094) (7,985)

EXCESS (DEFICIT) REVENUE OVER EXPENSES 22,110 45,524 14,071 (23,419) 8,039


MEMORANDUM

TO: MFA Board of Directors

Through: Finance Committee – September 11, 2018 Through: Policy Committee – September 5, 2018

FROM: Shawn Colbert, Director of Housing Development DATE: September 19, 2018 SUBJECT: Areas of Statistically Demonstrated Need for 2019 QAP

Recommendation:

Staff recommends approval of the attached Selection Methodology and the attached 2019 Areas of Statistically Demonstrated Need.

Background:

Each year, areas in need of additional rental housing opportunities are identified and are incorporated into the Selection Criteria of the Housing Tax Credit Qualified Allocation Plan (QAP) as Areas of Statistically Demonstrated Need. Projects located in areas of high need (Tier 1 areas) are awarded 10 points and areas of medium need (Tier 2 areas) are awarded 5 points.

The selection methodology is set forth in the attached table and generally involves analyzing population growth and vacancy rental rates. In order for an area to be considered as an Area of Statistically Demonstrated Need, the area must be part of a County or Metropolitan Statistical Area (MSA) with a population greater than 10,000 people. In order for an area to qualify as a Tier 1 area, it must also have population growth greater than the state’s growth rate for the past five years (0.14%) and a rental vacancy rate less than the state average (4.86%). In order for an area to qualify as a Tier 2 area, it must have population growth greater than the state’s growth rate for the past five years (0.14%) or a rental vacancy rate less than 4.86%. An area identified as an area of need will retain their Tier status for a minimum of two years. Consequently, counties identified with an asterisk (*) in the attached chart are areas which remain areas of need for a second year although they do not meet current criteria for 2019.

Data sources used to compile population, population growth and vacancy rates include the U.S. Census Bureau, as well as vacancy surveys performed by BBER in April, 2018, and the May, 2018 Apartment Market Summary performed by CB Richard Ellis Multi-Housing Group.

Projects on tribal trust lands have been included as Tier 1 Areas of Statistically Demonstrated Need.

Discussion:

TIER 1

The areas which qualify as Tier 1 (10 points) will include the following thirteen (13) counties:

Bernalillo* Cibola* Dona Ana Eddy

Los Alamos Luna* McKinley*

Otero Rio Arriba* Sandoval

Santa Fe Taos* Valencia*

Note: Counties identified with an asterisk (*) will remain as Tier 1 based on last year’s data and will be removed from the Tier 1 list next year unless qualified based on next year’s data.

TIER 2

The areas which qualify as Tier 2 areas (5 points) include the following nine (9) counties:

Chaves Colfax* Curry*

Grant Lea

Roosevelt* San Miguel*

Sierra Socorro*

Note: Counties identified with an asterisk (*) will remain as Tier 2 based on last year’s data and will be removed from the Tier 2 list next year unless qualified based on next year’s data.

In addition to the above Tier 1 and Tier 2 counties, any project located within a Tier 2 or non-qualifying county may petition MFA, through a narrative discussion attached in their Application, to include a particular town or municipality within one of the above Tier classifications or to re-classify a Tier 2 county to a Tier 1 county. Applicant will be required to provide MFA with specific verifiable and measurable data in support of their request, which data should address data for the particular town or municipality. MFA will consider measurable and verifiable data evidencing vacancy rates, population growth, waiting lists, and other applicable data regarding the market (e.g. market studies, PHA waiting lists) when making the determination whether to classify a town or municipality as a tier area.

Summary:

Staff recommends approval of the attached Selection Methodology and the attached 2019 list of Areas of Statistically Demonstrated Need.

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Bernalillo 673,914 676,773 0.42% Y Y 5.39% N H H*Catron 3,587 3,587 0.00% N N N/A NChaves 65,836 64,866 -1.47% N Y 4.30% Y M MCibola 27,341 26,853 -1.78% N Y 3.40% Y H H*Colfax 13,055 12,174 -6.75% N Y 8.10% N M M*Curry 50,494 49,812 -1.35% N Y 5.50% N M M*De Baca 1,921 1,829 -4.79% N N N/A NDona Ana 213,425 215,579 1.01% Y Y 4.80% Y H HEddy 55,518 56,997 2.66% Y Y 1.10% Y H* HGrant 29,047 27,687 -4.68% N Y 2.20% Y M MGuadalupe 4,533 4,429 -2.29% N N 7.50% NHarding 694 692 -0.29% N N N/A NHidalgo 4,619 4,305 -6.80% N N 8.10% NLea 68,173 68,759 0.86% Y Y 5.30% N M MLincoln 19,953 19,395 -2.80% N Y 6.60% N M*Los Alamos 17,830 18,738 5.09% Y Y 1.30% Y H HLuna 24,562 24,078 -1.97% N Y 3.60% Y H H*McKinley 72,604 72,564 -0.06% N Y 2.90% Y H H*Mora 4,697 4,551 -3.11% N N N/A NOtero 65,677 65,817 0.21% Y Y 3.80% Y H HQuay 8,669 8,306 -4.19% N N 6.20% NRio Arriba 40,003 39,159 -2.11% N Y 7.50% N H H*Roosevelt 19,969 18,847 -5.62% N Y 5.50% N M M*Sandoval** 136,151 142,507 4.67% Y Y 4.12% Y H HSan Juan 129,324 126,926 -1.85% N Y 6.30% NSan Miguel 28,749 27,748 -3.48% N Y 5.60% N M M*Santa Fe 146,616 148,750 1.46% Y Y 1.49% Y H HSierra 11,524 11,116 -3.54% N Y 3.80% Y M MSocorro 17,477 16,798 -3.89% N Y 5.40% N M M*Taos 32,840 32,795 -0.14% N Y 2.30% Y H H*Torrance 15,704 15,506 -1.26% N Y 8.10% N M*Union 4,341 4,187 -3.55% N N 8.10% NValencia 76,314 75,940 -0.49% N Y 2.70% Y H H*

2,085,161 2,088,070 0.14% 4.86%Tier 1 - High

Tier 2 - Medium

*Remains on list for second year

**Vacancy rate for Sandoval County is an average of Rio Rancho (4.64%) and Sandoval (3.6%) data

N/A - Counties did not report data

Counties combined due to limited number of affordable housing developments

Sources:

(a) U.S. Census Bureau, Annual Estimates of the Resident Population for New Mexico: April 1, 2010 to July 1, 2017 (PEPANNRES)

(b) Vacancy Surveys: (1) Performed by BBER April, 2018, (2) Apartment Market Survey Summary, May 2018, CB Richard Ellis Multi-Housing Group

2019 Areas of Statistically Demonstrated Need

2018 2019 Areas of Statistically Demonstrated Need Selection Methodology

Areas of Statistically Demonstrated Need

A county that loses its Tier 1 or Tier 2 status will retain their Tier status for a second year even though it did not meet the criteria in the current year. Additionally, if a Tier 1 county would drop to Tier 2 based on current data, it will remain Tier 1 for an additional year. Counties identified with an asterisk (*) in the table above will be removed from the list next year unless qualified by next year’s data. All Projects on Native American Trust Lands or Native American-owned lands within the tribe’s jurisdictional boundaries are eligible for Tier 1 points.

In addition to the above Tier 1 and Tier 2 counties, any project located within a Tier 2 or non-qualifying county may petition MFA, through a narrative discussion attached in their Application, to include a particular town or municipality within one of the above Tier classifications or to re-classify a Tier 2 county to a Tier 1 county. Applicant will be required to provide MFA with specific verifiable and measurable data in support of their request, which data should address data for the particular town or municipality. MFA will consider measurable and verifiable data evidencing vacancy rates, population growth, waiting lists, and other applicable data regarding the market (e.g. market studies, PHA waiting lists) when making the determination whether to classify a town or municipality as a tier area.

Tier 1 1) County or MSA with a population greater than 10,000; and 2) Growth rate greater than State average for last five years (-2.600.14%); and 3) Vacancy rate below State average (5.314.86%).

Tier 1 Counties: Bernalillo*, Cibola*, Dona Ana, Eddy, Los Alamos, Luna*, McKinley*, Otero, Rio Arriba*, Sandoval, Santa Fe, Taos*, and Valencia*.

Tier 2 1) County or MSA with a population greater than 10,000; and 2) Growth rate greater than State average for last five years (-2.600.14%); or 3) Vacancy rate below State average (5.314.86%).

Tier 2 Counties: Chaves, Colfax*, Curry*, Grant, Lea, Lincoln, Roosevelt*, San Miguel*, Sierra, and Socorro*., and Torrance

Areas of Statistically Demonstrated Need


MEMORANDUM TO: MFA Board of Directors

Through: Contracted Services Committee – September 11, 2018 Through: Policy Committee – September 4, 2018

FROM: Jeff Payne, Senior Director of Mortgage Operations

DATE: September 19, 2018

SUBJECT: Request For Proposals for Mortgage Servicing Legal Services Recommendation: Staff recommends the approval of the Request for Proposals (“RFP”) for Mortgage Servicing Legal Services. Responses will be due to MFA by Wednesday, October 10, 2018. Recommendations for awards will be presented in November 2018 for MFA Board approval.

Background: MFA issued an RFP for Single Family Mortgage Servicing Legal Services in 2014. The current contract will expire on May 17, 2019. There are no extensions remaining on the contract. MFA entered a temporary, emergency procurement contract with a second legal services provider in July of 2018. MFA was notified on June 12, 2018 by our current provider, Weinstein & Riley, P.S. (“W&R”), that the firm could no longer represent MFA in any case where the firm represents the plaintiff. Although this has been a practice for a number of years through the acknowledgement and signing of a waiver of potential conflict of interest between MFA and the first mortgage servicer(s), it was recently ruled by the New Mexico Disciplinary Board, an arm of the New Mexico Supreme Court, that effective immediately this practice can no longer take place. Therefore, in order to continue to protect MFA’s interest on open cases and recent referrals currently with W&R, MFA procured a second law firm to provide legal services. The current RFP anticipates that three offerors will be selected for this reason.

Discussion: MFA is recommending we issue a Request for Proposal for Single Family Mortgage Servicing Legal Services. The term is for three years with two one-year extensions at the Board’s option. The RFP was reviewed by MFA’s legal counsel, who has updated the document to clarify language throughout the RFP. Following is a summary of the major changes from the RFP issued in 2014.

Page Category 2014 RFP 2018 RFP 1 Purpose “Offerors” defined

in footnote • Added language to further describe

purpose of RFP. • “Offerors” was defined for use

throughout the RFP. 1 Proposal Submission March 10, 2014 • Updated the RFP submission deadline to

October 10, 2018. 4 Part II: Minimum

Qualifications and Requirements

• Clarified requirement for attorneys to be “in good standing”

• Removed requirement for attorneys to be listed in the most recent edition of the Martindale-Hubbell Law Directory with a rating of AV or BV.

• Require Offerors to provide evidence of professional liability insurance.

5 Part III: Services to

be Performed • Added paragraph to expand on specific

services provided as “end to end” default related services for first and second mortgages such as representing MFA’s interests in foreclosures, bankruptcies, loss mitigation, REO and judicial proceedings.

• Removed specific loan program names and added additional services to include document preparation and review.

5 Part IV: Evaluation Criteria

• Added language for Fixed Fees for specific services and reference to Exhibit A to aid in comparison of proposed fees between offerors.

• Revised scoring criteria to balance weighting between experience and fees; also added a reference scoring criteria.

6

Part V: Proposal Format and Instructions to Offeror

• Removed requirement for attorneys to be listed in the most recent edition of the Martindale-Hubbell Law Directory with a rating of AV or BV.

• Added language for process for References – New process Exhibit B.

• Added language to clarify that Offeror will comply with equal opportunity and non-discrimination laws of NM.

9 Part VI: Principal

Contract Terms and • Added additional language to the

following sections:

Conditions • “Hold Harmless and Indemnity Agreement”- Added clarification to defend and indemnify MFA from claims, damages and expenses.

• “Confidential Attorney-Client Relationship”- Added that Offeror is subject to NM Rules of Professional Conduct.

• “Equal Opportunity Compliance”- Added additional protected groups.

• “Applicable Law”- Added language to clarify Offeror’s consent to jurisdiction of the courts.

Exhibit A Updated with types of actions supported by legal

services. Staff Recommendation: Staff recommends the approval of the Request for Proposals for Mortgage Servicing Legal Services. Responses will be due to MFA by Wednesday, October 10, 2018. Recommendations for awards will be presented in November 2018 for MFA Board approval.

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New Mexico Mortgage Finance Authority Request for Proposals

Mortgage Servicing Legal Services

Part I: Background & General Information

Introduction The New Mexico Mortgage Finance Authority (“MFA”) is a governmental instrumentality, separate and apart from the State of New Mexico, created by the Mortgage Finance Authority Act, N.M. Stat. Ann. Sections 58-18-1, et seq. (1978) for the purpose of financing affordable housing for low and moderate income New Mexico residents. Purpose The purpose of this Request for Proposals (RFP) is to solicit proposals, in accordance with New Mexico Mortgage Finance Authority Procurement Policy, from qualified law firms, which by reason of their skill, knowledge, and experience are able to furnish legal services to MFA in connection, generally, with protecting and pursuing MFA’s rights and remedies arising from certain defaulted single family mortgages (each an “Offeror” and together the “Offerors”). Questions and Answers Questions pertaining to this RFP and application must be submitted via MFA’s website at www.housingnm.org/rfp. Then under “Current RFPs,” select “Mortgage Servicing Legal Services RFP.” On the legal Services RFP page, select the “Mortgage Servicing Legal Services FAQs” link. To submit your questions, scroll down to the “Ask a question” section, enter you name, email address, and type your question in the “Question” box. Then type in the two (2) words in the CAPTCHA box, and click on “Send my question”. MFA will make good faith efforts to check for questions posted to the Mortgage Servicing Legal Services FAQ page on a daily basis. MFA will make good faith efforts to answer questions within two (2) business days. And answers will be posted to the Mortgage Servicing Legal Services FAQ page described above. The FAQ will open the day after the RFP is issued and will close on October 3, 2018. Answers to questions posted on the Mortgage Servicing Legal Services FAQ page will be deemed part of this RFP. It is the sole responsibility of each Offeror to check the Mortgage Servicing Legal Services FAQ page referenced above for questions posted by potential Offerors and answers to those questions. Proposal Submission The original and six (6) copies of each proposal must be received by MFA at our office located at 344 Fourth Street S.W., Albuquerque, NM 87102 no later than Wednesday, October 102, 2018 at 4:00 p.m., Mountain Time (the “Proposal Due Date”). Proposals shall be in sealed envelopes marked “Response to Mortgage Servicing Legal Services RFP.”

http://www.housingnm.org/

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Proposal Tenure All proposals shall include a statement that the proposal shall be valid until contract award, but no more than 90 calendar days from the Proposal Due Date. RFP Revisions and Supplements If it becomes necessary to revise any part of this RFP, or if additional information is necessary to clarify any provision of this RFP, the revision or additional information will be provided on MFA’s web site and can be accessed at the following web address: www.housingnm.org/rfp. It is the sole responsibility of each Offeror to check MFA’s web page referenced above for revisions or clarifications to this RFP. Incurred Expenses Under no circumstance, including the cancellation of this RFP for any or no reason, shall MFA be responsible for any expenses incurred by any Offeror in responding or preparing its proposal for submission to MFA in conjunction with this RFP. All costs, expenses, and liabilities of any kind or nature whatsoever incurred by Offerors in the preparation, transmittal or presentation of any proposal or material submitted in response to this RFP will be borne solely by each respective Offerors. Cancellation of Requests for Proposals or Rejection of Proposals MFA may cancel this RFP at any time for any or no reason and may reject any proposal that MFA determines in its sole discretion is not responsive to this RFP. Evaluation of Proposals, Award Notice and Negotiation Proposals will be evaluated by an Internal Review Committee of MFA staff using the criteria listed in Parts II “Minimum Qualifications and Requirements” and III “Services to be Performed,” of this RFP, with final selection to be made the Board of Directors. MFA may provide Offerors whose proposals are reasonably likely, in MFA’s sole discretion, to be selected pursuant to this RFP, an opportunity to discuss and revise their proposals prior to award. The purpose of this opportunity afforded to Offerors is for MFA to obtain the final and best offers. MFA is not required to provide this opportunity to all Offerors even if it provides this opportunity to one or more Offerors. Proposals shall be evaluated on the criteria listed in Part IV “Evaluation Criteria,” below. MFA’s Board of Directors shall select the Offeror(s) whose proposal(s) is/are deemed to be most advantageous to MFA to enter into contract negotiations with MFA for the services sought in this RFP. If a final contract cannot be negotiated, then MFA will enter into negotiations with other Offeror(s) as MFA may determine in its sole discretion. The final contract will then be referred to the Contracted Services Committee of the MFA Board of Directors for recommendation, with final approval to be determined by the full Board of Directors. MFA hopes to receive proposals from multiple qualified Offerors so that MFA may contract with more than one Offeror for the provision of the services sought in this RFP.

http://www.housingnm.org/rfp

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Award Notice MFA shall provide written notice of the award to all Offerors within ten (10) days of the date of the award. The award shall be contingent upon successful negotiations of a final contract(s) between MFA and the Offeror(s) whose proposal(s) is/are accepted by MFA. Prohibited Activities Offerors and their representatives shall not communicate with MFA’s Board of Directors or staff members regarding any proposal under consideration, or that will be submitted for consideration, under this RFP except in response to an inquiry initiated by the Internal Review Committee, or a request from MFA’s Board of Directors for a presentation and interview. An Offeror’s proposal shall be deemed ineligible, in MFA’s sole discretion, if that Offeror, or any person or entity acting on behalf of that Offeror, attempts to influence members of MFA’s Board of Directors or staff regarding any proposal submitted in response to this RFP at any time, including during MFA’s consideration and evaluation of any protest as provided for in this RFP. Proposal Confidentiality and Confidential Data Until the award is made and notice given to all Offerors, MFA will not disclose the contents of any proposal or discuss the contents of any proposal with any Offeror or potential Offeror or in response to a public records request, so as to make the contents of any offer available to competing or potential Offerors. Offerors may request in writing that MFA maintain as confidential certain data and information submitted by an Offeror in response to the RFP. Any such confidential data shall be marked “CONFIDENTIAL”: in a conspicuous manner on each such page of any proposal containing confidential information, and any such data marked “CONFIDENTIAL” shall be readily separable from the proposal so as to facilitate public inspection of the non-confidential portions of the proposal. After award, all proposals and documents pertaining to the proposals will be open to the public except for those documents marked “CONFIDENTIAL.” Confidential data is normally restricted to confidential financial information concerning the Offeror’s organization and data that qualifies as trade secrets under the Uniform Trade Secrets Act, Section 57-3A1 et seq. NMSA 1978. If a person makes a public records request for data or documents that have been marked “CONFIDENTIAL” by an Offeror, MFA shall examine the request and make a written determination that specifies which portions of the proposal should be disclosed and what portions are not subject to the public records request. MFA will provide the Offeror with written notice of that determination and shall provide a reasonable opportunity for the Offeror to respond. MFA maintains sole authority to determine whether data or documents marked “CONFIDENTIAL” are or are not subject to any public records request. Irregularities in Proposals MFA may waive technical irregularities in the form of proposal of any Offeror selected for award that do not alter the price, quality or quantity of the services offered.

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Responsibility of Offerors It is each Offeror’s sole and independent responsibility to demonstrate in its proposal that it is a “Responsible Offeror." A “Responsible Offeror” is an Offeror who submits a proposal that conforms in all material respects to the requirements of this RFP and who has furnished, when required, information and data to prove that Offeror’s financial resources, facilities, personnel, reputation and experience are adequate to make satisfactory delivery of the services described in this RFP. The unreasonable failure of an Offeror to promptly supply information in connection with an inquiry with respect to responsibility is grounds for a determination that the Offeror is not a Responsible Offeror. If an Offeror that otherwise would have been awarded a contract is found not to be a Responsible Offeror, a determination that the Offeror is not a Responsible Offeror, setting forth the basis of the finding, shall be prepared and the Offeror shall be disqualified from receiving the award. Protest Any Offeror who is aggrieved in connection with this RFP or the award of this RFP may protest to MFA. The protest must be written and addressed to MFA Attn: Senior Director of Mortgage Operations 344 Fourth St. SW Albuquerque, NM 87102 The protest must be delivered to MFA within five (5) calendar days after the date of award to all Offerors. Upon the timely filing of a protest, MFA shall give notice of the protest to all Offerors who appear to have a substantial and reasonable prospect of being affected by the outcome of the protest. The Offerors receiving notice may file responses to the protest within five (5) calendar days of the date of the notice of protest. Part II: Minimum Qualifications and Requirements

All Offerors must meet the following minimum criteria: 1. All Offerors must list the attorneys who will provide legal services for MFA, and every attorney must

be licensed and in good standing in the State of New Mexico. 1. in the most recent edition of the Martindale-Hubbell Law Directory with a rating of AV or BV and be

licensed in the State of New Mexico. 2. All Offerors must have at least five years’ experience in the following substantive areas of law as

applied in New Mexico: banking laws and regulations (including federal and New Mexico law relating to mortgage servicing), single-family foreclosures, bankruptcy, real estate, mortgages, and contract law.

3. Offerors must maintain and provide evidence of professional liability insurance as outlined in Part VI of the RFP.

4. Offeror shall not be debarred, suspended or subject to a Limited Denial of Participation or otherwise restricted from participation in Housing & Urban Development (HUD) programs or MFA programs.

4.5. Offeror must meet Fannie Mae Minimum Requirements for default related legal services.

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Part III: Services to be Performed As requested by MFA in this RFP, professional legal services REQUIRED to be provided under single family mortgage servicing (and to be incorporated into the contract to be awarded pursuant to this RFP) include, but are not limited to, the following:

1. At MFA’s request, provide “end-to-end” default-related legal services to MFA in connection with MFA’s single-family mortgage loans, including MFA’s first and second and/or subordinate mortgage loan products funded with federal, state or other resources. These services may include representing MFA and protecting MFA’s interests in foreclosure proceedings, bankruptcy proceedings, title policy claims, evictions, loss mitigation efforts, forbearance agreements, assignments, REO-related services, and related judicial and other proceedings.

1.2. At MFA’s request, HOME Program, Housing Trust Fund Program and Land Title Trust Fund Program loans to protect MFA’s interest and maximize recovery as it is relates to Foreclosures and Bankruptcies, and provide services for all other legal matters related to MFA’s servicing of its single-family loans in accordance with HUD, VA, FHA, Conventional, MFA, and all other regulating agency guidelines, including document review and preparation.;

2. Provide legal services to include, but not limited to Single Family First Mortgage and Second Mortgage Foreclosure and Bankruptcy processing. (Chapter 7 and Chapter 13. New Mexico is a judicial foreclosure state; therefore all foreclosures will be processed through the courts;

3. At MFA’s request, represent MFA in other legal matters that may affect MFA’s servicing of its single-family loans, including but not limited to loan servicing litigation involving financial institutions, mortgage finance companies and brokerage houses, and other single family foreclosure litigation as required by MFA.

Part IV: Evaluation Criteria

MFA shall award the contract for single family mortgage servicing to the Offeror whose proposal is most advantageous to MFA. Proposals shall be scored on a scale of 1 to 100 based on the criteria listed below. A significant deficiency in any one criterion may be grounds for rejection regardless of overall score.

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Criteria Point

Range Maximum Points

1. Experience and Capability: Offeror’s skill, knowledge and experience with:

a. banking law, New Mexico real estate law, and contract law; b. state and federal laws relating to Single Family foreclosures and

bankruptcies and mortgage lending, including but not limited to HUD and other federal housing laws;

0-2030 0-15

3545

2. Responsiveness to MFA and Technical Capabilities: Offeror’s ability to deliver responsive, quality legal services and Offeror’s availability for consultation and discussion with MFA staff or any of its representatives.

a. Number of attorneys assigned to MFA matters on a priority basis; b. Offeror’s technical support capabilities, office hours, and the

hours in which attorneys can be reached by telephone.

0-5 0-5

10

3. References: Organizational references regarding timeliness, communication, knowledge, expertise, value of services, level of satisfaction and overall recommendation of Offeror.

0-5

5

4. Fees: Fixed Fees for specific services (Exhibit A), hourly rates, billing structure and other fees and costs.

a. Hourly basis – hourly rates OR Fixed fee based on specific services (Exhibit A); AND

b. Other fees and costs.

0-4535 0-105

5540

Maximum Points 100

Part V: Proposal Format and Instructions to Offeror

Proposals submitted to MFA must, at a minimum, contain the following information and shall be organized as follows:

1. Letter of Transmittal

Include at least the following information:

A. Name, address and telephone number of Offeror and contact person; B. A signature of the Offeror or any partner, officer or employee who certifies that he

or she has the authority to bind the Offeror; C. Date of proposal; D. A statement that the Offeror, if awarded the contract, will comply with the contract

terms and conditions set forth in this RFP; and E. A statement that the Offeror’s proposal is valid for ninety (90) days after the

deadline for submission of proposals.

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2. A statement from Offeror’s primary attorney to provide legal services to MFA is listed in the most

recent edition of The Martindale-Hubbell Law Directory and that the Offeror possesses a rating of AV or BV. A statement that the Offeror islicensed in the State of New Mexico.

3. Evidence submitted by Offeror that Offeror retains professional liability insurance which fulfills the requirements set forth in Part VI Professional Liability Insurance of this RFP. Possession of such coverage shall not limit Offeror’s potential liability.

4. Names and resumes of the lead attorney and other key personnel including other attorneys, legal assistants and support staff to be assigned to the contract. Resumes describing the qualifications of personnel to be utilized in the performance of this contract must show, at a minimum, the person’s name, education, position, and total years and types of experience relevant to the performance of the contract.

5. A detailed description of Offeror’s knowledge and experience with respect to the single family mortgage banking industry, federal and state tax and real estate laws as well as rules, regulations and guidelines of both single family governmental and private mortgage insurers. Offeror must also provide a detailed description of Offeror’s ability to provide legal services to MFA as set forth in Part III “Services to be Performed” above, including: contract law, single family loan real estate transactions, and business, commercial and banking matters, particularly matters involving single family real estate servicing and related matters.

6. Thre names and contact information for at least three (3) references for Offeror’s work as counsel for a financial institution, mortgage lender or real estate enterprise. The form attached hereto as Exhibit B must be completed and submitted by each reference no later than the Proposal Due Date defined above.

7. For the last ten years, a list and description including the current disposition or status, of any litigation against Offeror or any formal or informal action taken by any bar association, state or federal securities commission, disciplinary board, or other attorney regulatory body against Offeror.

8. A detailed description of Offeror’s policy regarding the resolution of conflicts of interest which arise out of Offeror’s representation of clients with adverse or potentially adverse interests and Offeror's mechanism to insure that such conflicts do not arise and that if such conflicts do arise, how the Offeror intends to assist MFA in retaining counsel to represent MFA. Please include examples of the implementation of this policy and information regarding whether Offeror has a computerized management information system in place to track possible conflicts of interest.

9. A statement disclosing: (1) any political contribution or gift valued in excess of $250.00 (singularly or in the aggregate) made by Offeror to any elected official of the State of New Mexico in the last three years, (2) any current or proposed business transaction between Offeror and any MFA member, officer, or employee, and (3) any other conflict or potential conflict which may give rise to a claim of conflict of interest.

10. A detailed description of Offeror’s technical capabilities to provide responsive and professional services to MFA if the contract were awarded to Offeror (e.g., ability to prepare and respond to documents in a timely manner, expertise of administrative support staff, etc.).

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11. Offeror’s proposal for delivering services, including organization of responsibilities, work plan, approach, and the availability of personnel for consultation and discussion, as necessary to serve the needs of MFA.

12. A description of New Mexico financial institutions, mortgage companies or real estate firms represented by Offeror currently or in the last ten years.

13. The location of Offeror’s main office and the locations of any of Offeror’s branch offices.

14. A detailed description of the manner in which the Offeror is proposing to be paid for the services performed under this RFP for single family mortgage services, i.e., whether those will be provided on a fixed fee basis (based on service provided), at an hourly rate, or some other basis. A specific fee schedule for professional legal services must be included in this proposal. Please include the following information:

A. A list of all Offeror’s employees including attorneys, paralegals and support staff who are to work on MFA matters and their specific hourly rates, and if the rate varies by the type of service, the hourly rate for different types of service

B. Offeror’s minimum billing unit

C. Information regarding Offeror’s ability to provide detailed monthly billings summarized by subject matter and a sample itemized bill

D. Whether Offeror’s proposed rates are the best offered by the firm to any client

E. A rate schedule for those matters that would be charged on a flat rate fee basis, and a detailed breakdown of the service provided

F. A rate schedule for standard expenses such as per page copying charges, facsimile transmissions, overnight mail expenses and word processing charges, and a description of all other charges that would be billed to MFA under the contract, such as mileage and travel expenses, and a statement as to when such miscellaneous charges would be imposed

G. A narrative description of the steps routinely taken to ensure that legal representation is provided on a cost-effective basis. Discuss such matters as Offeror’s policy with respect to billing for such items as intra-office consultation, research, travel, and unsuccessful attempts to reach people by telephone.

H. All Offerors are responsible for determining fees or costs associated with doing business in New Mexico and those costs must be included as part of the proposal.

15. In preparing Offeror’s proposed fee structure, please take note of the following:

A. MFA invites the attention of Offeror to MFA’s serious concern about the rising cost of legal services. The control and management of legal costs is the mutual concern of the Offeror and MFA. MFA requires quality professional services at a reasonable cost and the performance of only those services necessary. In evaluating proposals, MFA will consider

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the methods used by the Offeror to avoid services which do not materially contribute to the overall success of the engagement.

B. Lodging and other travel related expenses shall be reimbursed by MFA in accordance with MFA’s expense reimbursement policies set forth in its Policies and Procedures Manual.

C. Offeror must absorb the cost of familiarizing itself with MFA programs, policies and procedures, rules, regulations and past bond issues. Program documents and any other relevant information shall be made available for Offeror’s review at MFA’s office in Albuquerque. MFA will not pay for such work. Indicate how much time Offeror expects to devote to familiarizing itself with MFA programs, policies and procedures, rules, regulations and provide a timetable for doing so.

D. Offeror must give MFA at least a three (3) year commitment on the rate schedule offered. The contract may be extended for two, one (1) year periods at the option of MFA’s Board.

E. Offeror is required to submit itemized billing statements on a monthly basis.

16. MFA requires that Offeror be an Equal Opportunity Employer. Please state that Offeror complies fully with all government regulations regarding nondiscriminatory employment practices and please certify that Offeror will comply with all New Mexico laws regarding equal opportunity and non-discrimination.

17. Offeror shall provide MFA with written certification that Offeror is eligible to participate in any and all federal or state funded housing programs; is not currently facing disciplinary action by any federal, state or local entity; is not suspended, debarred or excluded from participation in any federal or state funded housing program; and is not listed as an excluded party on the System for award Management’s list of excluded parties accessed at www.sam.gov.

187. Please provide any other relevant information which will assist MFA in evaluating Offeror’s ability to provide mortgage servicing legal services to MFA.

Part VI: Principal Contract Terms and Conditions In addition to the terms respecting the services to be performed and compensation described above, the contract between MFA and the successful Offeror (also referred to herein as “Contractor”) shall include, but may not be limited to, terms substantially similar to the following: Contract Term The term of any contract awarded under this RFP shall begin the date MFA’s Board of Directors approves the award and end on the third anniversary date thereafter. At the option of the Board, the contract may be extended for two one (1)-year periods under the same terms and conditions. There will be a transition period for matters in process at the beginning and the end of the contract term. Hold Harmless and Indemnity Agreement Contractor shall hold harmless, defend, and indemnify MFA, its members, officers, employees, and agents from and against any and all claims, liabilities, obligations, damages, costs, fees, expenses, losses

http://www.sam.gov/

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and the like, (including reasonable attorneys’ fees as they are incurred) asserted by any third parties arising from or attributable to Contractor’s performance of the services required under the contract. This indemnity and hold harmless agreement shall include reimbursement of all attorneys’ fees, costs and expenses incurred by MFA, members, employees, or agents in defending any such action, as those fees and costs are incurred. Assignment/ Change in Key Contractor Personnel Contractor shall not assign or transfer any interest in the contract or assign any claims for money due or to become due under the contract (except as security for a bank loan in its ordinary course of its business) without the prior written approval of MFA. Any change to key Contractor personnel, including lead and other attorneys assigned to the contract, shall require prior written notice to and approval by MFA, and amendment to the contract to reflect the change in assigned Contractor personnel. Subcontractors Contractor shall not employ a subcontractor (or substantially change the contemplated division of responsibilities with a previously approved subcontractor) without the prior written approval of MFA. Any and all fees or costs incurred by a subcontractor shall be paid by Contractor and shall not be reimbursed by MFA. Contractor shall assume full and complete responsibility and liability for subcontractor’s performance of any services which Contractor has delegated to a subcontractor. Records and Audit Contractor shall maintain detailed time records which indicate the detail of services rendered, which shall be subject to inspection by MFA. MFA shall have the right to audit bills submitted to MFA under any contract executed pursuant to this RFP both before and after payment. Payment under the contract shall not foreclose the right of MFA to recover excessive and/or illegal payments. Budget and Billing Prior to commencing any matter requiring substantial work, Contractor shall prepare and deliver to MFA a detailed budget of all fees and costs that Contractor anticipates will be necessary to perform the services required for that transaction. A detailed statement of services and an invoice for services provided must be presented before any payment under the contract shall be made. MFA will pay Contractor fees or costs which exceed those indicated in the budget only if such costs are reasonable and result from circumstances which Contractor could not have anticipated at the time Contractor prepared the budget. Professional Liability Insurance Each Contractor shall maintain professional liability insurance covering all liabilities and risks inherent in Contractor’s performance of the services required under the contract. Each Contractor’s insurance policy must provide per claim and aggregate limits of at least two million dollars ($2,000,000.00), must provide for a per claim/aggregate deductible in an amount reasonable for a firm of Contractor’s size and financial condition, and must be in a form acceptable to MFA. Each Contractor must provide MFA with an acceptable certificate of insurance in force at the time of the inception of the contract and at each anniversary date, extension or renewal of the contract, which provides for not less than thirty (30) days’

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notice to MFA of non-renewal or cancellation. Contractor shall immediately notify MFA in the event of any cancellations, modifications or changes in the amounts of coverage provided under such professional liability coverage. Failure to have, maintain and continue professional liability coverage in the amount and form specified shall be cause for immediate termination of the contract and shall not require the notice provided for in Part VI Principal Contract Terms and Conditions, Termination of this RFP. Confidential Attorney-Client Relationship The relationship between Contractor and MFA shall be that of attorney-client and Offeror shall be subject to the New Mexico Rules of Professional Conduct for lawyers as promulgated by the New Mexico Supreme Court.. Any information developed or acquired by or furnished by Contractor in the performance of the contract shall be kept confidential and shall not be made available to any individual or organization not involved in a given transaction without the prior written approval of MFA. Code of Conduct Offerors must agree to be bound by MFA’s Code of Conduct, which provides that no Board member or employee of MFA shall have any direct financial interest in any contract with the Offeror, nor shall any contract exist between Offeror or its affiliate with any MFA Board member or employee that might give rise to a claim of conflict of interest. Any violation of this provision will render void any contract between MFA and the Offeror for which MFA determines that a conflict of interest exists as herein described, unless that contract is approved by MFA’s Board of Directors after full disclosure. Offeror shall provide a statement disclosing any political contribution or gift valued in excess of $250 (singularly or in the aggregate) made by Offeror or on Offeror’s behalf to any elected official of the State of New Mexico currently serving or who has served on MFA’s Board of Directors in the last three (3) years. Offeror shall warrant that it has no interest, direct or indirect, which would conflict in any manner or degree with the performance of services required under any contract entered into with MFA pursuant to this RFP. Offeror shall at all times conduct itself in a manner consistent with MFA’s Code of Conduct and MFA’s Anti-Harassment Policy. A copy of MFA’s Code of Conduct and MFA’s Anti-Harassment Policy is posted on MFA’s web site for review at www.housingnm.org/rfp. Upon request by MFA, Offeror shall disclose information MFA may reasonably request relating to conflict or potential conflicts of interest. Equal Opportunity Compliance Contractor agrees to abide by all federal and state laws of New Mexico, rules and regulations and executive orders pertaining to equal employment opportunity. Contractor agrees to assure that no person shall, on the grounds of race, color, age, religion, national origin, ancestry, sex, sexual orientation, gender identity, spousal affiliation, physical or mental disability or handicap, or serious medical condition be excluded from employment with or participation in, be denied the benefits of, or be otherwise subject to discrimination under, any program serviceor activity performed by Offeror for MFA pursuant to this RFP.

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Termination Any contract entered into by Contractor and MFA pursuant to this RFP may be terminated without cause by MFA upon thirty (30) days written notice. Such termination shall not nullify any obligations already incurred for performance or failure to perform before the date of termination. Upon termination, MFA’s Board may negotiate and award the remaining term(s) of the contract using the proposals submitted in this RFP. Status of Contractor The Contractor and its agents and employees are independent contractors performing services for MFA and are not employees of MFA. The Contractor and its agents and employees shall not accrue leave, retirement, insurance, bonding or other benefits afforded to employees of MFA. Amendment Any contract entered into by Contractor and MFA pursuant to this RFP shall not be altered, changed or amended except by an instrument in writing and executed by both parties. No amendment shall be effective or binding until approved by MFA. Scope of Agreement Any contract entered into by Contractor and MFA pursuant to this RFP shall incorporate all the agreements, covenants and understandings between the parties concerning the subject matter of the agreement and all such covenants, agreements and understandings have been merged into that written agreement. No prior understanding or agreement, verbal or otherwise, of the parties or the agents, shall be valid or otherwise enforceable unless embodied in that agreement. Applicable Law This RFP and any contract entered into by Contractor and MFA pursuant to this RFP shall be governed by the laws of the State of New Mexico. By submitting a proposal in response to this RFP, Offeror expressly consents to the jurisdiction of the courts of the State of New Mexico for any disputes arising from or related to this RFP or any contract entered into by Contractor and MFA pursuant to this RFP.

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New Mexico Mortgage Finance Authority Board Members

Chair, Dennis Burt – Burt & Company CPAs Vice Chair Angel Reyes – President, Centinel Bank in Taos Treasurer Steven Smith – President, R.O.G. Enterprises Member John A. Sanchez – Lieutenant Governor, State of New Mexico Member Hector Balderas – Attorney General Member Tim Eichenberg – Treasurer, State of New Mexico

Member Randy McMillan – President, NAI First Valley Realty, Inc.,

Management

Jay Czar, Executive Director Gina Hickman, Deputy Director of Finance & Administration

Izzy Hernandez, Deputy Director of Programs Jeff Payne, Senior Director of Mortgage Operations

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EXHIBIT A

Following are the types and number of actions most often supported by legal services in the prior year.

Foreclosures Foreclosure-MFA 1st Mtg - 2 Foreclosure-MFA 1st/2ndMtg – 1 Answer/Monitor - 87 Disclaimer - 72 Title policy claim - 0 Forbearance agreement - 0 Eviction action - 0 Bankruptcies Monitor Bankruptcy - 46 Proof of Claim - 7 Motion for relief from Stay - 0 Proof of Claim Preparation -7 Plan objection - 0 Miscellaneous Deed in Lieu of foreclosure - 1

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EXHIBIT B

ORGANIZATIONAL REFERENCE QUESTIONNAIRE The New Mexico Mortgage Finance Authority, as part of the RFP process, requires Offerors to submit at least three references from financial institutions, governmental entities, and/or mortgage servicers and at least one reference for which services sought in this RFP have been provided as required within this document. The purpose of these references is to document Offeror’s experience relevant to the scope of work in an effort to establish Offeror’s responsibility. Offeror is required to send the following reference form to each business reference provided by Offeror. The business reference, in turn, is requested to submit the Reference Form directly to: Jeff Payne, Senior Director of Mortgage Operations, MFA 344 4th Street SW, Albuquerque, NM 87102 or [email protected] by October 10, 2018 at 4:00 p.m. for inclusion in the evaluation process. The form and information provided will become a part of the submitted proposal. Business references provided may be contacted for validation of content provided therein.

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MORTGAGE SERVICING LEGAL SERVICES RFP

ORGANIZATIONAL REFERENCE QUESTIONNAIRE FOR:

______________________________________ (“Offeror”) This form is being submitted to your company for completion as a business reference for the company named above, which is referred to herein as the Offeror. This form is to be returned to the New Mexico Mortgage Finance Authority via facsimile or e-mail at: Name: Jeff Payne Address: 344 4th St. SW Albuquerque, NM 87102 Telephone: (505) 767-2270 Fax: (505) 243-3289 E-mail: [email protected] The completed form must be returned to MFA no later than October 10, 2018 4:00 p.m., and must NOT be returned to the Offeror requesting the reference. For questions or concerns regarding this form, please contact Jeff Payne at the number listed above. Company providing reference: Contact name and title/position: Contact telephone number: Contact e-mail address: Description of services provided: Dates services provided (starting and ending):

Total Revenues: $ Total Assets: $

1. How would you rate the timeliness of the legal work conducted and the communication provided? ____ (3=Excellent 2=Satisfactory 1=Unsatisfactory 0=Unacceptable) COMMENTS:

2. How would you rate how the work was executed?

____ (3=Excellent 2=Satisfactory 1=Unsatisfactory 0=Unacceptable) COMMENTS:

3. How would you rate the knowledge and technical expertise demonstrated? ____ (3=Excellent 2=Satisfactory 1=Unsatisfactory 0=Unacceptable) COMMENTS:

mailto:[email protected]

17

4. How would you rate the value added to your organization through the Offeror’s services? ____ (3=Excellent 2=Satisfactory 1=Unsatisfactory 0=Unacceptable) COMMENTS:

5. With which aspect(s) of this Offeror’s services are you most satisfied?

COMMENTS:

6. With which aspect(s) of this Offeror’s services are you least satisfied? COMMENTS:

7. Would you recommend this Offeror’s services?

COMMENTS:

New Mexico Mortgage Finance Authority 344 4th St. SW, Albuquerque, NM 87102 tel. 505.843.6880 toll free 800.444.6880 housingnm.org

MEMORANDUM TO: Board of Directors

Through: Strategic Management Committee

FROM: Monica Abeita, Director of Policy and Planning DATE: September 19, 2018 SUBJECT: Year 2 (FY 2019) Changes to MFA FY 2018-2022 Strategic Plan

Recommendation: Staff recommends board approval of the attached changes in strike-through, underline format to MFA’s FY 2018-2022 Strategic Plan, which include new/changed strategic initiatives and benchmarks for Year 2 (FY 2019). Background: MFA’s current strategic plan is for FY 2018-2022. MFA will complete the first year (FY 2018) of the plan on September 30, 2018 and will begin the second year (FY 2019) on October 1, 2018. The Strategic Management Committee is recommending changes to some strategic initiatives and benchmarks to reflect work planned for Year 2. Summary: Board approval is requested for changes to MFA’s FY 2018-2022 Strategic Plan for Year 2 (FY 2019). MFA will complete the first year (FY 2018) of the plan on September 30, 2018 and will begin the second year (FY 2019) on October 1, 2018. Year 2 strategic plan changes include new/changed strategic initiatives and benchmarks.

MFA FY 2018-2022 Strategic Plan

A Bold Path Forward

MFA Vision, Mission and Core Values

Responsive To meet New Mexico’s needs, MFA optimizes resources, cultivates partnerships and makes our programs accessible.

Dynamic MFA is a dynamic place to work. Our employees are our strength. We embrace diversity and provide opportunities for personal and professional growth.

All New Mexicans will have quality affordable housing opportunities.

Professional MFA upholds high personal and professional standards. We comply with regulations and ensure prudent financial stewardship.

MFA is New Mexico’s leader in affordable housing. We provide innovative products, education and services to strengthen families and communities.

VISION MISSION

CORE VALUES

2

Message from the Executive Director Jay Czar

In the face of uncertainty for affordable housing funding and programs, Our strategic plan, A Bold Path Forward, focuses on bolstering resources to accomplish our mission, leading the way in addressing New Mexico’s unique affordable housing needs and improving internal systems to support our work. Even in potentially challenging times, MFA will continue its affordable housing mission and make it more robust and successful in meeting the needs of all New Mexicans.

Our strategic planning process identified several themes, described at right, which drove the strategic initiatives in this plan. In the context of goals and objectives that reflect our core affordable housing work, the strategic initiatives will be updated annually to reflect progress made, changes to conditions and trends and risks identified through our annual enterprise risk management process.

Affordable housing funding is under threat and diminishing. MFA continues to be proactive in developing new resources, efficiencies, business opportunities and financial innovations, as well as fostering creative partnerships.

New Mexico’s rural areas are struggling and require unique approaches. MFA will evaluate ways to serve more rural residents with mortgage products and nimble development financing and to strengthen our partners throughout the state.

Along with the US, New Mexico is at risk of losing many affordable rental homes. MFA is working to provide financial options and rehabilitation financing, and to make all rental properties financially sustainable over the long term.

New Mexico’s high poverty rate and low incomes indicate a great need for financial education. Our strategic initiatives focus on better educating MFA borrowers so that they can enjoy stability, sustain homeownership and build wealth.

Significant changes in the workforce and in technology are on the horizon. MFA is working to create a technology platform that supports innovation and future growth and to foster a dynamic, diverse work environment that supports our mission.

3

MFA updates its strategic plan every three years. The planning process is led by MFA’s Strategic Management Committee.

The MFA Planning Process

Housing Needs Assessment

In 2016, MFA prepared an assessment of affordable

housing needs to inform the strategic planning process.

Interviews and SWOT Analysis

In January-March 2017, interviews were conducted with board members and

each MFA department. The Strategic Management

Committee translated the interview results into an

analysis of strengths, weaknesses, opportunities

and threats (SWOT).

Housing Trends Series

MFA hosted five speakers who spoke to staff on MFA finances, fair housing and trends in housing policy,

multifamily and single family housing.

Enterprise Risk Management

MFA’s Strategic Planning Committee participated in an enterprise risk management exercise based on the SWOT

analysis. The Committee prioritized risks and developed

mitigation strategies for the strategic plan.

4

Goal Statements

Ensure prudent stewardship of affordable housing resources.

Strengthen affordable housing partners.

Foster a dynamic work environment.

Provide robust technology solutions.

3

4

5

Respond to New Mexico’s affordable housing needs.

1

2

5

Like all housing finance agencies, MFA administers affordable housing programs in accordance with its enabling legislation and program requirements. MFA seeks opportunities to improve and develop products, programs and processes to address our state’s unique needs.

Goal 1 Respond to New Mexico’s affordable housing needs.

Objective 1 Strengthen and

improve existing MFA products and

programs.

Objective 4 Promote

sustainable homeownership.

Objective 2 Develop specialty products to meet

demand and community needs.

Objective 3 Increase awareness

of affordable housing and MFA

products and programs.

Strategic initiatives: • Preferred lenders program • Vendor management • Capital Magnet Fund • NEXT Home improvements • Neighborhood stabilization

program • USDA Section 538 on tribal lands • Development program

improvements • Homeowner rehab program

expansion • Homeless programs alignment • Freddie Mac & Fannie Mae loan

sales & affordable housing programs

Strategic initiatives:

• Correspondent lending

• Specialty housing development programs

• Financing for single family development

• Financing for small rental development

• Manufactured home lending


• Enhanced public awareness of MFA

• Digital presence for single family marketing MFA mortgage products

• Builder outreach


• Delinquency prevention strategies

• Tribal and Colonias homebuyer counseling program

• Homebuyer counseling enhancements

Objective 5 Provide options to

preserve and improve affordable

rental homes.


• Loan modification and restructuring strategies

• Risk rating of properties

Strategic initiatives in italics require evaluation prior to implementation. 6

MFA has long maintained a level of excellence in managing its financial resources. As a self-supporting agency, MFA continually works to expand and diversify available resources through government sources, self-generated earnings from lending and investments, operational efficiencies, and the use of creative partnerships and financial tools.

Goal 2 Ensure prudent stewardship of affordable housing resources.

Objective 1 Optimize existing

financial strategies.

Objective 4 Evaluate new funding

and business opportunities.

Objective 2 Expand MFA business models and diversify

financial tools.

Objective 3 Maintain and grow

existing funding sources.


• Resource allocation study • Management strategies

for oversight of MSRs • Industry awareness • Best execution for

financing single family mortgages

• Investment approach


• Servicing expansion • Community Reinvestment

Act lending credit program • Tax-exempt mortgage-

backed securities program • Multifamily pass-through

structures • Mortgage credit

certificates


• Renewal of HUD Section 8 Project-Based Contract Administration (PBCA) contract

• State tax credit and Charitable Trust Marketing for private contributions

• State and federal policy engagement

• Tax-exempt bond partnerships


• Housing development outreach Marketing for development financing

• State funding sources • New funding opportunities

Grant writing capacity


MFA relies heavily on its partners in a rural and geographically large state like New Mexico. Yet partners face many challenges that may hinder their ability to succeed. MFA is committed to helping its partners build capacity, prosper and provide all New Mexicans access to affordable housing.

Goal 3 Strengthen affordable housing partners.

Objective 1 Expand access to MFA

products and services in underserved and high-

need areas.

Objective 2 Help partners realize strong organizational, technical and financial

capacity.

Objective 3 Provide resources and

processes that strengthen partner capacity and

program effectiveness.


• Additional HOPWA service provider/s

• NM Energy$mart expansion • Outreach to increase HOPWA

referrals • Expand providers and service

areas for owner-occupied rehabilitation

Strategic initiatives: • Develop situational awareness with

Regional Housing Authoritiesy on-site monitoring

• Local government technical assistance

• Tribal government technical assistance

• Specialized training for key service providers

• Service provider training program • Property manager training program • Developer training


• Lender training videos • Streamlining of the affordable

housing plan process • Alignment of MFA and

formula grant plans • Online applications • Implement LIHTC compliance

Strategic initiatives in italics require evaluation prior to implementation.

8

Technology is fundamental to MFA’s day-to-day business operations as well as partner and customer service needs. Increased integration and automation will support current needs while providing an essential platform for business growth.

Goal 4 Provide robust technology solutions.

Objective 1 Protect MFA’s data and

systems.

Objective 2 Maintain system reliability

and implement redundancy

improvements.

Objective 3 Build and maintain a

technology platform that supports MFA’s long-term

plans for innovation, functionality and growth.


• Best practices in cybersecurity


• Disaster recovery site


• Software improvements • Document management

system


MFA provides a fulfilling work environment to support the many generations in its changing workforce. Skilled, professional and engaged employees are at the core of MFA’s unique business model and specialized programs.

Goal 5 Foster a dynamic work environment.

Objective 1 Provide a competitive

compensation and benefits package to attract

and retain employees.

Objective 2 Support opportunities that

increase flexibility and engagement for

employees.

Objective 3 Maintain stability in

staffing and operations throughout MFA.


• Biennial cCompensation survey


• Office space evaluation needs assessment

• Web-based training opportunities

• Work schedule options


• Employee cross-training • Succession planning • Intern/management trainee

program • External specialty training • Robust on-boarding


Each quarter, MFA assesses its performance using these benchmarks, which relate to goals and objectives in the strategic plan. At the end of the fiscal year, the status of each benchmark (did not meet, met, exceeded) determines payouts made through MFA’s incentive compensation plan.

Benchmarks G

oal 1

G

oal 2

Goa

l 4

Goa

l 3

1. Provide mortgage financing for 2,000 1,900 homebuyers (1.1) 2. Attain average mortgage product utilization of 20% of all FHA

loans recorded in New Mexico (1.1) 3. Finance 1,000 975 rental units (1.5) 4. Achieve annual combined average loan delinquencies of MFA serviced portfolio below xx% (was 11.4%) (1.4) 5. Implement MFA’s housing summit and open house (1.3) 6. Create or expand on at least one digital marketing or social

media effort (1.3) 7. Evaluate at least one new specialty product or significant

program or product improvement (1.2)

25. Maintain a low risk in semi-annual vulnerability scans (4.1)

26. Maintain system availability at 99% (4.2) 27. Implement new software solutions (4.3)

8. Obtain unqualified opinion on MFA financial statements and no material weakness in internal control over financial reporting or major programs, excluding first-time audits (2.0)

9. Maintain or improve credit rating (2.0) 10. Achieve operating performance and profitability equal

to net revenues over total revenues of at least xx% (was 10.4%) based on five-year average (2.1)

11. Obtain balance sheet strength equal to net asset position over total bonds outstanding of at least xx% (was 30.5%), based on five-year average (2.1)

12. Realize administrative fee of at least 18 basis points on all bond issues (2.1)

13. Realize profitability of xx (was 1.3%) on TBA executions (2.1) 14. Maintain servicing fee yield at an average of 0.36% of the purchased servicing portfolio (2.2)

21. Expand services of at least one program to an underserved area of the state (3.1)

22. Assist at least five local or tribal governments with affordable housing plans, implementation or programs (3.2)

23. Provide at least five formal training opportunities for property owners, developers and/or service providers (3.2)

24. Improve at least one MFA process or resource (3.3) G

oal 5

28. Maintain or improve Achieve employee engagement score satisfaction of 82%85% (5.2, 5.3)

29. Complete compensation survey (5.1) 11

Goa

l 2, C

ontin

ued

15. Earn 100% base fees for PBCA contract (2.3) 16. Yield a collection rate of 95% or greater for compliance

monitoring fees (2.3) 17. Meet commitment and expenditure requirement of

95% of grant funding (2.3) 18. Increase Generate at least $500,000 in contributions

made through the state affordable tax credit program over last year’s total of $364,000 (2.3)

19. Evaluate at least one new business model or financial tool (2.2)

20. Increase funding by at least one new source (2.4)

New Mexico Mortgage Finance Authority 344 4th St. SW, Albuquerque, NM 87102 tel. 505.843.6880 toll free 800.444.6880 housingnm.org

MEMORANDUM TO: Board of Directors FROM: Monica Abeita, Director of Policy and Planning DATE: September 19, 2018 SUBJECT: MFA 2019 Legislative Agenda Recommendation: Staff recommends board approval of MFA’s legislative agenda for 2019. Background: MFA’s is proposing the following seven appropriation requests for the 2019 New Mexico Legislative Session. Requests 1-6 were discussed with the Mortgage Finance Authority Act Oversight Committee on August 14, 2018, at which time, committee members recommended sponsors for each bill. The committee also recommended a seventh request, Homebuyer Counseling, to be sponsored by Senator Michael Padilla. As noted below, MFA is pursuing some of these requests through other channels, including the New Mexico Department of Finance and Administration (DFA) budget and the state capital outlay process. Pending MFA board approval, the Mortgage Finance Authority Act Oversight Committee will endorse the bills at its November meeting. 1. Regional Housing Oversight, $300,000—Recurring (Sponsor: Senator Mary Kay Papen) State mandate, inclusion in DFA budget requested 2. Affordable Housing Act Oversight, $250,000—Recurring (Sponsor: Senator Stuart Ingle) State mandate 3. New Mexico Housing Trust Fund, $5 million (Sponsor: Senator Nancy Rodriguez)

Also submitted as a capital outlay request 4. Low-Income Residential Energy Conservation(NM Energy$mart), $2 million (Sponsors:

Senator Richard C. Martinez and Representative Roberto “Bobby” J. Gonzales) Also submitted as a capital outlay request

5. Veteran Home Rehabilitation, $2 million (Sponsor: Senator Richard C. Martinez) Needed as match for HUD’s Veterans Home Rehabilitation and Modification pilot program, to which MFA has applied for funding

2

6. Emergency Home Repair, $2 million (Sponsors: Senator Jeff Steinborn and Representative Roberto “Bobby” J. Gonzales)

7. Homebuyer Counseling, $500,000 (Sponsor: Senator Michael Padilla)

Summary: Board approval is requested for MFA’s legislative agenda for the 2019 New Mexico Legislative Session. The 2019 legislative agenda includes seven appropriations requests: Regional Housing Authority Oversight, Affordable Housing Act Oversight, the New Mexico Housing Trust Fund, the NM Energy$mart Program, Veteran Home Rehabilitation, Emergency Home Repair and Homebuyer Counseling.

Tab 10

1 G:\Board Reports\Staff Actions\Staff Actions 2018

Staff Actions Requiring Notice to Board During the Period of August 31, 2018

Department and Program

Project Action Taken Comments

Housing Development – NMHTF, HOME and NHTF Programs

HopeWorks Village Award modified to (1) extend the deadline for awards/commitment letters for City of Albuquerque and Bernalillo County capital funds from July 31, 2018 to August 31, 2018, and (2) extend the deadline for awards/commitment letters for rental assistance for at least 10 units from July 31, 2018 to October 31, 2018

Approved by Isidoro Hernandez on August 1, 2018

Servicing June 2018 Loan Servicing Quality Control Review

Approval of report issued by REDW. No findings.

Approved by Policy Committee on August 6, 2018

Servicing July 2018 Loan Servicing Quality Control Review

Approval of report issued by REDW. No findings.

Approved by Policy Committee on August 28, 2018

Community Development Freddie Mac Housing Counseling

Approved three (3) agencies to provide housing counseling services under the Freddie Mac MOU totaling $125k. Native Community Finance, Tierra del Sol and Southwest Regional Housing and Community Development. All three were part of the proposal to Freddie Mac.

Approved by Policy Committee on August 28,2018.

Tab 11


Combined Financial Statements and Schedules

July 31, 2018

NEW MEXICO MORTGAGE FINANCE AUTHORITYFINANCIAL REVIEW

For the ten‐month period ended July 31, 2018

SUMMARY OF NEW BOND ISSUES: Single Family Issues: $45 mm 2017 Series B Bonds‐New Money (November) $65 mm 2018 Series B Bonds‐New Money (July)

$12.3 mm 2017 Series B Bonds‐Refunding (November) $50 mm 2018 Series A Bonds‐New Money (May) $12.8 mm 2018 Series A Bonds‐Refunding (May)

Multi‐family Issues: None

COMPARATIVE YEAR‐TO‐DATE FIGURES (Dollars in millions):10 months 10 months % Change Forecast Actual to Forecast/Target 7/31/2018 7/31/2017 Year / Year 7/31/2018 Forecast 9/30/18

PRODUCTION1 Single family issues (new money): $160.0 $50.0 220.0% $111.0 44.1% $111.02 Single family loans sold (TBA): $212.8 $233.8 ‐9.0% $215.8 ‐1.4% $259.03 Total Single Family Production $372.8 $283.8 31.4% $326.8 14.1% $370.04 Multifamily issues: $0.0 $22.2 ‐100.0% $20.0 ‐100.0% $20.05 Single Family Bond MBS Payoffs: $48.2 $54.1 ‐10.9% $54.3 ‐11.2% $65.1STATEMENT OF NET POSITION

6 Avg. earning assets: $961.5 $938.0 2.5% $925.8 3.9% $940.67 General Fund Cash and Securities: $85.3 $89.0 ‐4.2% $82.7 3.2% $81.68 General Fund SIC FMV Adj.: $0.1 $0.2 ‐50.0% $0.0 N/A $0.09 Total bonds outstanding: $760.9 $669.4 13.7% $689.7 10.3% $698.0STATEMENT OF REVENUES, EXPENSES AND NET POSITION

10 General Fund expenses (excluding capitalized assets): $12.3 $10.3 19.4% $12.7 ‐3.1% $15.011 General Fund revenues: $19.2 $18.6 3.2% $16.8 14.3% $19.212 Combined net revenues (all funds): $8.0 $9.9 ‐19.2% $8.8 ‐9.4% $10.613 Combined net position: $232.5 $222.2 4.6% $233.3 ‐0.4% $235.214 Combined return on avg. earning assets: 0.99% 1.27% ‐22.0% 1.13% ‐12.4% 1.13%15 Net TBA profitability: 1.67% 1.92% ‐13.0% 1.70% ‐1.8% 1.70%16 Combined interest margin: 1.06% 0.99% 7.1% 1.06% 0.0% 1.06%

MOODY'S BENCHMARKS17 Net Asset to debt ratio (5‐yr avg): 29.40% 27.06% 8.6% 30.47% ‐3.5% 30.47%18 Net rev as a % of total rev (5‐yr avg): 10.14% 9.41% 7.8% 10.39% ‐2.4% 10.39%

SERVICING19 Mortgage Operations net revenues: $3.6 $4.9 ‐26.5% $1.1 232.3% $1.320 Subserviced portfolio $696.5 $322.2 116.2% $607.7 14.6% $749.821 Servicing Yield (subserviced portfolio) 0.39% 0.36% 8.3% 0.36% 8.3% 0.36%22 Combined average delinquency rate (MFA serviced) 12.00% 12.85% ‐6.6% 11.79% 1.8% 11.79%23 DPA loan delinquency rate (all) 11.18% 12.27% ‐8.9% N/A N/A N/A24 Default rate (MFA serviced) 1.32% 0.98% 34.7% 1.61% ‐18.0% 1.61%25 Subserviced portfolio delinquency rate (first mortgages) 5.53% 3.19% 73.4% N/A N/A N/A26 Purchased Servicing Rights Valuation Change (as of 6/30) $2.7 $1.3 107.7% N/A N/A N/A

Legend: Positive Impact, Negative Impact, Caution/Known Trend

Page 1 of 2

NEW MEXICO MORTGAGE FINANCE AUTHORITYFINANCIAL REVIEW

For the ten‐month period ended July 31, 2018

SIGNIFICANT MONTHLY/QUARTERLY FINANCIAL VARIANCES:

In comparison to FY2017 trends indicate improved production and prepayments as well as gains in interest margin and Moody's ratios.FY2018 net revenues in comparison to FY2017 net revenues (YOY) reflect less gain on sale of assets of $1.0mm, $1.1mm more in general operating expenses,including $.7mm more in single family bond cost of issuance offset by $1.5mm less in interest expense.FY2018 net revenues in comparison to the FY2018 forecast reflect less than estimated interest income of $2.3mm on an annualized basis due to timing and overestimate of mortgage loans receivable balance.

CURRENT YEAR FINANCIAL TRENDS & VARIANCES:

TBA transaction fees are currently exceeding budget by approximately $2.0mm or 68% due to production trends. This additional revenue is offset by related lender compensation expense which is exceeding budget by $.6mm or 47%. During this fiscal year there have been large swings in the State Investment Counsel (SIC) fair market values (FMV) on the General Fund investment portfolio.

Changes in valuations have ranged from $.7mm in gains and $.9mm in losses. As of July 2018 MFA has experienced $.1mm in gains. MFA classifies FMV adjustments on this portfolio as non‐operating gains/losses.Servicing expansion continues to provide additional revenues as the subserviced portfolio and purchased servicing rights asset bases increase. This fiscal year MFA is providing a full mortgage warehouse line to Idaho Housing through the FHLB Loans Held for Sale program which will also provide additional revenues.Staff does continue to have concerns over the MBS subserviced portfolio increased delinquency rates. The Compliance Officer and Director of Servicing are closely monitoring

collections and foreclosure services provided by MFA's subservicer and coordinating with them on risk management strategies. These delinquencies have an impact on the credit risk associated with MFA's downpayment assistance (DPA) loan portfolio, however in March 2018 staff performed the semi‐annual analysis and adjustment of the DPA portfolio loan loss reserves and adjusted accordingly for 1st mortgages in foreclosure and non‐performing DPA loans.Based on the current Loan Loss Reserve (LLR) methodology, MFA's portfolios are adequately reserved. Reserved will evaluated and adjusted accordingly in August 2018.The economics of the single family mortgage program have changed since the beginning of February when MFA began bonding for all FIRST HOME Program loans.The bond execution primarily produces long‐term cash flows in comparison to the TBA markets one‐time transaction fees. Additionally, spreads earned on the TBA sale of NEXT HOME securities have decreased due to changes in the markets and interest rate environment thus reducing profitability for that execution.Incurred $552k in single family bond cost of issuance expense for 2017 Series B (November). Transaction provided MFA $1.4mm in net economic benefit (present value)over the life of the bonds. Incurred $580k in single family bond cost of issuance expense for 2018 Series A (May). Transaction provided MFA $3.5mm in net economic benefit (present value). Incurred $551k in single family bond cost of issurance expense for 2018 Series B (July). Transaction provided MFA $1.8mm in net economic benefit (present value).Fair market value for purchased servicing rights as of June 30, 2018 was $8.9mm, an increase of approximately $2.7mm over cost. GASB requires MFA to utilize "lower of cost or market" accounting for this asset. Therefore, no valuation adjustments are anticipated. Current purchased servicing rights are recorded at a cost of $6.1mm as of June 30, 2018. Valuations are obtained on a quarterly basis.Based on Moody’s issuer credit rating scorecard, MFA’s 29.40% net asset ratio (5‐year average), which measures balance sheet strength, indicates a strong and growing level of resources for maintaining HFA's creditworthiness under stressful circumstances (> 20%). The net revenue as a percent of total revenue measures performance and profitability and MFA’s 10.14% ratio (5‐year average) points to a satisfactory profitability with consistent trends (5%‐10% range). Moody's Investor Services issued an updated credit opinion on MFA. They reaffirmed our Aa3 rating. Comments included strong asset to debt ratio, good profitability and low risk profile due to mortgage‐backed security structure, multifamily risk share program and no exposure to variable rate debt.

Page 2 of 2

MONTHLY FINANCIAL GRAPHS

Target

2017 2018

Loans Effective yield 4.36% 4.38% Cash & Investments Effective yield 1.91% 2.25% Rate of Return on Average Earning Assets 1.32% 1.13%

(1) Weatherization Assistance Programs; Emergency Shelter Grant; State Homeless; Housing Opportunities for People With Aids; NM State Tax Credit; Governor's Innovations; EnergySaver; Tax Credit Assistance Program; Tax Credit Exchange; Neighborhood Stabilization Program; Section 811 PRA; Homeownership Preservation Program (2) NM Affordable Housing Charitable Trust Fund; Land Title Trust Fund; Housing Trust Fund

1,024,233 965,425 957,337 919,808 1,061,599

$2,530,234 $2,549,825 $2,649,500

$3,029,148

$3,559,058

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2014 2015 2016 2017 2018

Assets Under Management as of 9/30/2018 ($ in thousands)

Subserviced Portfolio

Other Grants (1)

HOME

Section 8

Low Income Housing Tax Credit

Trusts (2)

Rental Housing Program

General Fund

Single Family Mortgage Program

Book Assets

3.84%

0.99%

1.47%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%Yield Targets 9/30/2018

2014-2015 5,841

2015-2016 7,673

2016-2017 9,916

2017-2018 7,957

Target 2017-2018

8,836

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

YTD Excess Revenues over Expenses as of 7/31/2018

2014-2015 2015-2016 2016-2017 2017-2018 Target 2017-2018

($ th

ousa

nds)

0.00%1.00%2.00%3.00%4.00%5.00%

0.00%5.00%

10.00%15.00%20.00%25.00%

YTD Annualized Payoffs as a Percentage of Single Family Mortgage Portfolio as of 9/30/2018

Payoffs/Portfolio

10 year Treasury rate

8/29/2018 2:06 PM

YTD 07/31/18 YTD 07/31/17

ASSETS:CURRENT ASSETS:CASH & CASH EQUIVALENTS $32,074 $40,574RESTRICTED CASH HELD IN ESCROW 10,342 9,880 SHORT-TERM INVESTMENTS - - ACCRUED INTEREST RECEIVABLE 3,300 3,130 MORTGAGE PAYMENT CLEARING - 163 OTHER CURRENT ASSETS 2,193 1,210 ADMINISTRATIVE FEES RECEIVABLE (PAYABLE) (0) (0) INTER-FUND RECEIVABLE (PAYABLE) - 0 TOTAL CURRENT ASSETS 47,908 54,957

CASH - RESTRICTED 77,616 35,452 LONG-TERM & RESTRICTED INVESTMENTS 66,915 59,324 INVESTMENTS IN RESERVE FUNDS 68 112 FNMA, GNMA, & FHLMC SECURITIZED MTG. LOANS 620,949 572,198 MORTGAGE LOANS RECEIVABLE 241,358 198,068 ALLOWANCE FOR LOAN LOSSES (1,774) (2,600) NOTES RECEIVABLE - 21,526 FIXED ASSETS, NET OF ACCUM. DEPN 1,201 962 OTHER REAL ESTATE OWNED, NET 348 469 OTHER NON-CURRENT ASSETS - 21 INTANGIBLE ASSETS 6,499 3,065 TOTAL ASSETS 1,061,089 943,555

DEFERRED OUTFLOWS OF RESOURCESREFUNDINGS OF DEBT 510 665

TOTAL ASSETS & DEFERRED OUTFLOWS OF RESOURCES 1,061,599 944,219

LIABILITIES AND NET POSITION:

LIABILITIES:CURRENT LIABILITIES:ACCRUED INTEREST PAYABLE 7,819 7,622 ACCOUNTS PAYABLE AND ACCRUED EXPENSES 10,613 5,314 ESCROW DEPOSITS & RESERVES 10,231 9,928 TOTAL CURRENT LIABILITIES 28,662 22,864

BONDS PAYABLE, NET OF UNAMORTIZED DISCOUNT 760,885 669,444 MORTGAGE & NOTES PAYABLE 39,344 29,461 ACCRUED ARBITRAGE REBATE - - OTHER LIABILITIES 203 245

TOTAL LIABILITIES 829,095 722,014

NET POSITION:INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 1,201 962 UNAPPROPRIATED NET POSITION (NOTE 1) 63,633 61,252 APPROPRIATED NET POSITION (NOTE 1) 167,671 159,992 TOTAL NET POSITION 232,505 222,206

TOTAL LIABILITIES & NET POSITION 1,061,599 944,219

NEW MEXICO MORTGAGE FINANCE AUTHORITYCOMBINED STATEMENT OF NET POSITION

JULY 31,2018(THOUSANDS OF DOLLARS)

8/29/2018 2:06 PM

YTD 07/31/18 YTD 07/31/17

OPERATING REVENUES:INTEREST ON LOANS $27,622 $28,507INTEREST ON INVESTMENTS & SECURITIES 2,158 1,955 LOAN & COMMITMENT FEES 1,281 520 ADMINISTRATIVE FEE INCOME (EXP) 6,844 7,890 RTC, RISK SHARING & GUARANTY INCOME 103 133 HOUSING PROGRAM INCOME 1,097 1,208 LOAN SERVICING INCOME 2,171 1,139 OTHER OPERATING INCOME 1 3 SUBTOTAL OPERATING REVENUES 41,276 41,355

NON-OPERATING REVENUES:ARBITRAGE REBATE INCOME (EXPENSE) - 53 GAIN(LOSS) ASSET SALES/DEBT EXTINGUISHMENT (272) 808 OTHER NON-OPERATING INCOME 47 21 GRANT AWARD INCOME 37,237 35,552 SUBTOTAL NON-OPERATING REVENUES 37,011 36,434

TOTAL REVENUES 78,288 77,789

OPERATING EXPENSES:ADMINISTRATIVE EXPENSES 10,789 9,114 INTEREST EXPENSE 21,247 22,709 AMORTIZATION OF BOND/NOTE PREMIUM(DISCOUNT) (1,645) (1,920) PROVISION FOR LOAN LOSSES 92 205 MORTGAGE LOAN & BOND INSURANCE - - TRUSTEE FEES 69 70 AMORT. OF SERV. RIGHTS & DEPRECIATION 236 162 BOND COST OF ISSUANCE 1,683 991 SUBTOTAL OPERATING EXPENSES 32,472 31,332

NON-OPERATING EXPENSES:CAPACITY BUILDING COSTS 682 762 GRANT AWARD EXPENSE 37,176 35,563 OTHER NON-OPERATING EXPENSE - 216 SUBTOTAL NON-OPERATING EXPENSES 37,859 36,540

TOTAL EXPENSES 70,331 67,873

NET REVENUES 7,957 9,916 OTHER FINANCING SOURCES (USES) - - NET REVENUES AND OTHER FINANCING SOURCES(USES) 7,957 9,916 NET POSITION AT BEGINNING OF YEAR 224,548 212,289

NET POSITION AT 07/31/18 232,505 222,206

FOR THE TEN MONTHS ENDED JULY 2018(THOUSANDS OF DOLLARS)

NEW MEXICO MORTGAGE FINANCE AUTHORITYSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

NOTES TO FINANCIAL STATEMENTS

(For Informational Purposes Only) (Thousands of Dollars)

(Note 1) MFA Net Position as of July 31, 2018:

UNAPPROPRIATED NET POSITION:

$ 35,002 is held by Bond Program Trustees and is pledged to secure repayment of the Bonds.+$ 28,510 is held in Trust for the NM Housing Trust Fund and the NM Land Title Trust Fund.$ 121 held for New Mexico Affordable Housing Charitable Trust .

$ 63,633 Total unappropriated Net Position

APPROPRIATED NET POSITION: GENERAL FUND

By actions of the Board of Directors on various dates, General Fund net assets have been appropriated as follows:

$ 105,794 for use in the Housing Opportunity Fund ($86,629 in loans plus $19,165 unfunded, of which $3,322 iscommitted).

$ 28,672 for future use in Single Family & Multi-Family housing programs.

$ 9,746 for loss exposure on Risk Sharing loans.

$ 1,201 invested in capital assets, net of related debt.

$ 6,499 invested in mortgage servicing rights.

$ 3,695 for the future General Fund Operating Budget Y E 9/30/18 ($19,397 total budgetless $15,702 expended budget through 07/31/18.)

$ 155,607 Subtotal - General Fund

APPROPRIATED NET POSITION: HOUSING By actions of the Board of Directors on December 7, 1999, Housing assets have been appropriated as follows:

$ 13,266 for use in the federal and state housing programs administered by MFA.

$ 13,266 Subtotal - Housing Program

$ 168,873 Total appropriated Net Position

$ 232,505 Total combined Net Position at July 31, 2018

Total combined Net Position, or reserves, at July 31, 2018 was $232.5 million, of which $63.6 million was pledged to the bond programs, Affordable Housing Charitable Trust and fiduciary trusts. $168.9 million of available reserves, with

$85.3 million primarily liquid in the General Fund and in the federal and state Housing programs and $83.6 million illiquid -

- for use in existing and future programs - for coverage of loss exposure in existing programs, and - for support of operations necessary to carry out the programs.

MFA's general plan for bond program reserves as they may become available to MFA over the next 30 years is to use the reserves for future programs, loss exposure coverage, and operations.

ONE YEAR TO YEAR TO DATE UNDER/(OVER) UNDER/(OVER) EXPENDEDMONTH DATE PRO RATA YTD ANNUAL ANNUAL ANNUAL BUDGETACTUAL ACTUAL BUDGET BUDGET BUDGET BUDGET PERCENTAGE

REVENUES

OPERATING REVENUES

INTEREST INCOME 706,167 6,495,815 6,856,988 361,173 8,228,385 1,732,570 78.94%

ADMIN INCOME 661,280 9,265,992 6,849,093 (2,416,899) 9,632,812 366,820 96.19%

OTHER OPERATING INCOME 631,620 3,381,593 3,077,961 (303,632) 3,693,553 311,960 91.55%SUBTOTAL OPERATING REVENUES 1,999,067 19,143,400 16,784,042 (2,359,358) 21,554,750 2,411,350 88.81%

NON-OPERATING REVENUES (106,955) 70,316 (23,250) (93,566) (27,900) (98,216) -252.03%

TOTAL REVENUES 1,892,112 19,213,716 16,760,792 (2,452,925) 21,526,850 2,313,134 89.25%

EXPENSES

OPERATING EXPENSES

COMPENSATION 525,916 5,519,975 6,073,702 553,727 7,288,442 1,768,467 75.74% TRAVEL & PUBLIC INFO 24,010 235,704 398,003 162,299 477,603 241,899 49.35%

OFFICE EXPENSES 122,034 796,245 747,739 (48,506) 907,529 111,284 87.74%

OTHER OPERATING EXPENSES 496,135 4,397,076 4,024,655 (372,422) 5,145,546 748,470 85.45%SUBTOTAL OPERATING EXPENSES 1,168,094 10,949,000 11,244,098 295,098 13,819,120 2,870,120 79.23% NON-OPERATING EXPENSES 27,024 682,497 721,750 39,253 866,100 183,603 78.80%

SUBTOTAL OPERATING & NON-

OPERATING EXPENSES 1,195,118 11,631,496 11,965,848 334,351 14,685,220 3,053,724 79.21%

EXPENSED ASSETS 3,562 99,944 68,517 (31,427) 82,220 (17,724) 121.56%

NON-CASH ITEMS 43,484 609,810 617,718 7,908 741,262 131,452 82.27%

TOTAL EXPENSES 1,242,164 12,341,251 12,652,083 310,832 15,508,702 3,167,451 79.58%

NET REVENUES 649,948 6,872,466 4,108,709 2,763,757 6,018,148 854,318 85.80%

PURCHASED SERVICING & CAPITAL OUTLAY

PURCHASED SERVICING RIGHTS 329,324 3,115,949 3,083,333 (32,616) 3,700,000 584,051 84.21%

CAPITALIZED ASSETS 2,411 245,546 156,783 (88,763) 188,139 (57,407) 130.51%TOTAL PURCHASED SERVICING & CAPITAL OUTLAY 331,735 3,361,495 3,240,116 (121,379) 3,888,139 526,644 86.46%

TOTAL INCLUDING CAPITALIZED ITEMS 318,214 3,510,971 868,593 2,885,136 2,130,009 327,673 84.62%

1%

NEW MEXICO MORTGAGE FINANCE AUTHORITY GENERAL FUND & HOUSING

BUDGET VARIANCE REPORT

FOR THE TEN MONTHS ENDED 7/31/18

August 9 – September 10

MEDIA COVERAGE

8-21 Albuquerque Journal Council Oks $2 million for HopeWorks 8-28 Albuquerque Journal HopeWorks project moves ahead 8-30 ABQ Journal Online MFA awarded $3.6M Treasury Dept. grant 8-30 Alibi Hope, Revitalization and Thanks

PRESS RELEASES, NEWSLETTERS and LENDER MEMOS

8-6 E-blast to mailing list Early Bird Summit Registration Ends Wednesday 8-10 Lender Memo 18-12 URGENT-New closing document-HUD Second Mortgage Rider 8-13 Lender Memo 18-12 Webinar Training Schedule 8-27 E-blast to mailing list One week to register at regular summit rates 8-27 E-blast to mailing list Special summit session for NMMLA members 8-27 E-blast to lenders HomeNow program teaser 8-30 Press release MFA Receives $3.6M Capital Magnet Fund Award

8-31 E-blast to mailing list Six more days to register at regular summit prices 9-4 E-blast to mailing list Regular Registration Rates End Today 9-4 Lender Memo 18-14 New DPA program announcement:

HomeNow 9-10 E-blast to mailing list Online registration ends September 5

Council OKs$2 million forHopeworksVillage includes behavioralhealth services and housingBY STEVE KNIGHTJOURNAL STAFF WRITERCopyright © 2018 Albuquerque JournalAlbuquerque city councilors on Monday were

tasked with an unenviable job.Like recent meetings on the city and Berna

lillo County's proposed tiny home village project,another large gathering of residents participatedin another conversation about the city's homelesschallenges.And after more than two hours of public comment

and deliberation, councilors voted 53 to award$2 million to St. Martin's Hopeworks/YES Housing

Inc. for the proposed Hopeworks Village, a 42unitsupportive housing multifamily development forthose suffering from behavioral health issues andwho are in need of shelter.Councilors Pat Davis, Trudy Jones and Brad Win

ter cast dissenting votes. Councilor Don Harris wasunable to attend the meeting.Many spoke supporting the project, with its pro

posed site near St. Martin's Hospitality Center onSee COUNCIL >> A4

Council OKs $2M for Hopeworks VillageFrom PAGE A1

Third Street NW. Others spoke in opposition,with subjects ranging from negative impactson area business to neighborhood safety tocost justification.The Rev. Vincent Chavez, pastor of St.

Therese Parish and Catholic School, toldcouncilors that the proposal will not solve"this serious issue.""We the residents and businesses of North

Downtown, Wells Park and near North Valley are overstressed and are at wit's end,"Chavez said. "None of us, the deprived neighbor or our residents with an actual roof overtheir heads has a quality of life, security andwellbeing as long as the homeless issue hasno real permanent solution."St. Martin's was the sole bidder on the proj

ect, whose scope includes purchasing landand property, planning, designing, constructing and improving a singlesite behavioralhealth services center with associated supportive and transitional affordable housing.The Department of Family and Community

Services issued a notice of award to St. Martin's in June and is in negotiations on a devel

opment agreement with the project team.Councilor Isaac Benton, who sponsored the

appropriation bill, said the council will consider approval of that development agreementat a later date."There is a road map before us," Benton

said. "This is a top priority this type ofproject, and no one is saying this is the onlyproject. In fact, given the population, eventually there should be more of these projects.What this project is intended to do is to servethe most severely threatened people in thehomeless community."The proposed Hopeworks Village will

include onebedroom units, designed to beboth ADA accessible and contain universaldesign features. The building would includea management office, a maintenance room, acentral front lobby, a social services provider'soffice and additional service space, as well aspublic gathering spaces and laundry areas onthe second and third floors.About $3 million in Bernalillo County

funding and housing vouchers and about$4 million from the New Mexico MortgageFinance Authority is also available for theproposed project.

NM0082 Albuquerque JournalPage Number: 001Publication Date: 08/21/2018

Council OKs $2 million for HopeworksBY STEVE KNIGHT JOURNAL STAFF WRITER35.80 column inches

Title:Author:Size:Albuquerque, NM Circulation: 102148

Page: 1

369190-08-21_0010036.pdf

County: Bernalillo

HopeWorks project moves aheadCity, county to helpfund complex that offersapartments and servicesCopyright © 2018 Albuquerque Journal

BY RICK NATHANSONJOURNAL STAFF WRITERThe planning of a 42unit support

ive residential apartment buildingon the campus of HopeWorks is proceeding, despite ongoing reservationsfrom area residents and surrounding neighborhood associations, whoregard it as just one more problemfor their community already burdened by a disproportionate numberof homeless people."The neighbors' concerns are valid.

We hear them. But our mission is toserve people who are living in visiblepoverty, visible homelessness andwho are dying on the street," saysHopeWorks executive director GregMorris.According to a HopeWorks fact

sheet, the apartments will be thefirst of three phases that will eventually rebuild the entire campus at1201 Third Street, which is locatedbetween Third and Fourth Streetsnorth of Mountain Road. The residential units will be located on thesecond and third floors of the building, while the first floor will be forbehavioral health and case management services. The parking lot will belandscaped and trees will be plantedalong Fourth Street.Phase one of the project is expected

to cost about $9 million and much ofthe money is already in place, saysMorris, including: $3 million fromthe National Housing Trust Fund;up to $630,000 from HOME Investment Partnership funds from the U.S.Department of Housing and UrbanDevelopment; $1.3 million from theNew Mexico Housing Trust Fund;$2 million from the city of Albuquerque; and $2 million from BernalilloCounty."We're actively

seeking the balance from publicand private sources,and hope to breakground this fall,"Morris says of theproject, which has atentative completiondate of December2019.The second phase includes con

struction of a new administrativeand services building located alongThird Street, and the third phase willreplace the existing day shelter anddining hall.Additional landscaping, lighting

and security features will be addedwith each phase.Ultimately, the campus will be rein

forced with fencing and gated entriesfrom the street."The goal is to provide a welcoming,

comfortable space that will encourageindividuals to stay on the campus during the day to rest and obtain services,instead of milling around the adjacentneighborhoods," Morris says.The current day shelter space is "not

welcoming or thoughtfully designed,"he says. "It was an old building whenwe got it, and while there is somespace outside the building for peopleto gather, it's basically an extensionof our parking lot" and provides littleinducement for people to remain thereduring the day.While the daily migration of the

homeless through the Wells Park,Near North Valley and other neighborhoods is a constant source ofresident animosity, not many peoplebelieve the HopeWorks project willprovide much relief in the context ofa homeless population that is countedin the thousands."Certainly, there are many more

people living on the street than thereare vacant units, so we have to buildmore permanent supportive housing," says Morris. "That ultimately iswhat will mitigate the neighborhoodimpact."

Greg Morris


HopeWorks project moves aheadCopyright © 2018 Albuquerque Journal BY RICK NATHANSON JOURNAL STAFF WRITER

62.93 column inches


Page: 1

369190-08-28_005009.pdf

County: Bernalillo

ROBERTO E. ROSALES/JOURNAL

A new 42unit supportive residential apartment building is the centerpiece of phase one of a larger plan to eventuallyredesign the entire campus.


HopeWorks project moves aheadCopyright © 2018 Albuquerque Journal BY RICK NATHANSON JOURNAL STAFF WRITER

62.93 column inches


Page: 2

369190-08-28_005009.pdf

County: Bernalillo

Agency gets $3.6M for affordable housing in NM | Albuquerque Journal Page 1 of 2

https://www.abqjournal.com/1215192/agency-gets-3-6m-for-affordable-housing-in-nm.html 8/31/2018

Delivery alert until NaN

Agency gets $3.6M for affordable housing in NM

By ABQJournal News Staff

Thursday, August 30th, 2018 at 3:12pm

ALBUQUERQUE, N.M. — The New Mexico Mortgage Finance Authority has been awarded a $3.6

million Capital Magnet Fund grant from the U.S. Department of the Treasury.

The money comes from Treasury’s Community Development Financial Institutions Fund. MFA is one of

40 grant recipients recently awarded a total of $120 million.

MFA was one of only five state housing finance agencies to receive funding, according to a news

release.

MFA will use the $3.6 million award to capitalize its affordable housing fund, which provides down

payment assistance to low-income homebuyers in the state. MFA is on track to see a 25 percent increase

in the number of down payment assistance that has been provided in the last two calendar years.

“A record-breaking number of New Mexicans have used MFA’s down payment assistance programs to

buy homes over the last two years,” said Jay Czar, executive director of MFA, in a prepared statement.

“We are extremely pleased that we can now expand those programs to help even more New Mexicans

become homeowners. These families will experience the financial and emotional security that comes

with being a homeowner.”

http://www.abqjournal.com/1215192/agency-gets-3-6m-for-affordable-housing-in-nm.html


Agency gets $3.6M for affordable housing in NM | Albuquerque Journal Page 2 of 2

https://www.abqjournal.com/1215192/agency-gets-3-6m-for-affordable-housing-in-nm.html 8/31/2018

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FEATURE • NEWS • ARTS & LIT • FOOD • FILM & TV • MUSIC • CANNABIS • BEST OF BURQUE • CALENDAR COUNCIL WATCH

HOPE, REVITALIZATION AND THANKS Council meets to strengthen city

By Carolyn Carlson

Councilors Benton and Davis pledge allegiance to the flag

ERIC WILLIAMS PHOTOGRAPHY

Several million dollars in hope is on its way to north Downtown after the Albuquerque City Council approved a project that will bring a chance for a better life to some of the city’s most vulnerable residents. Working Hope

At its Aug. 20 meeting, the Council tallied up a 5 to 3 approval vote for a homeless housing project—with Democrat Councilors Ken Sanchez, Isaac Benton, Klarissa Peña, Cynthia Borrego and Diane Gibson saying yes and Democrat Councilor Pat Davis joining Republican nay sayer Councilors Brad Winter and Trudy Jones. Councilor Don Harris was excused.

https://alibi.com/feature/di/2018-08-30/feature.html

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https://alibi.com/events/calendar.html

http://cabq.granicus.com/MediaPlayer.php?view_id=2&clip_id=233

https://www.abqjournal.com/1214043/hopeworks-village-moves-ahead-despite-objections-ex-city-county-to-help-fund-complex-that-includes-apartments-and-services-for-homeless.html

https://www.abqjournal.com/1214043/hopeworks-village-moves-ahead-despite-objections-ex-city-county-to-help-fund-complex-that-includes-apartments-and-services-for-homeless.html

https://alibi.com/index.php

The local homeless service provider St. Martin’s Hopeworks/YES Housing was the sole bidder to build the project that is aptly called Hopeworks Village. This is a proposed 42-unit supportive multi-family housing development for homeless citizens with behavioral health issues. The site is near the St. Martin’s Hospitality Center on Third Street and Mountain. The $2 million in newly approved city funds joins $4 million from the New Mexico Mortgage Finance Authority and about $3 million in funding and housing vouchers from Bernalillo County.

Many of the public comments were from people who said they live in the neighborhood and they are tired of the homeless population that is already drawn to the area. Many other commenters said this was a good location because it is where the need is most recognizable. Some stressed that it will help get some of the homeless off the street. And this, they said, was a good start at addressing the increasing number of people having to live on the streets due to any number of reasons, from health and behavioral issues to a bad economy in Burque. Revamping Downtown

Councilors approved a $30 million metropolitan redevelopment bond for a project in north Downtown. Just about the entire city block, from Lomas on the north to Roma on the south, and 3rd Street on the east and Fourth Street on the west, is slated for rebuild or renovation, except for the portion with the longtime pink Sunwest Silver building that takes up the northwest corner of that block.

In a nutshell, metropolitan redevelopment bonds give developers a tax abatement which in turn their company reinvest back into the project.

Plans for that prime Downtown spot include a new 7-story building with residential, retail, restaurant and other work spaces. Gone will be the longtime parking structure many people used while taking care of courthouse and other Downtown business. Other buildings on the property will be renovated with many exterior and interior upgrades. Check it out here: documents.cabq.gov/planning/abq-development-commission/2018/ADC-StaffReport-Supplment-1-18-18.pdf.

https://www.bizjournals.com/albuquerque/news/2018/01/19/bank-of-the-west-center-project-looking-to-revamp.html

https://www.bizjournals.com/albuquerque/news/2018/01/19/bank-of-the-west-center-project-looking-to-revamp.html

http://documents.cabq.gov/planning/abq-development-commission/2018/ADC-StaffReport-Supplment-1-18-18.pdf

http://documents.cabq.gov/planning/abq-development-commission/2018/ADC-StaffReport-Supplment-1-18-18.pdf

NEW MEXICOMFA awarded $3.6MTreasury Dept. grantThe New Mexico Mortgage

Finance Authority has been awardeda $3.6 million Capital Magnet Fundgrant from the U.S. Department ofthe Treasury. The money comes fromTreasury's Community DevelopmentFinancial Institutions Fund. MFAis one of 40 grant recipients recentlyawarded a total of $120 million.MFA was one of only five state

housing finance agencies to receivefunding, according to a news release.MFA will use the $3.6 million

award to capitalize its affordablehousing fund, which provides downpayment assistance to lowincomehomebuyers in the state. MFA is ontrack to see a 25 percent increasein the number of down paymentassistance that has been provided inthe last two calendar years.


MFA awarded $3.6M Treasury Dept. grant

7.44 column inches


Page: 1

369190-08-31_012001.pdf

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New Mexico Mortgage Finance Authority 344 4th Street SW, Albuquerque, NM 87102

tel. 505.843.6880 toll free 800.444.6880 housingnm.org

TO: Participating Lenders

FROM: Rene Acuna, Director of Homeownership

DATE: August 10, 2018

RE: Memo No. 18-12

URGENT - New closing document - HUD Second Mortgage Rider

HUD Second Mortgage Rider Requirement – to be executed with MFA loans

reserved on August 10, 2018 or after!

PLEASE FORWARD THIS MEMORANDUM TO THE APPROPRIATE

PERSONNEL WITHIN YOUR ORGANIZATION.

MFA worked closely with HUD to create a custom Second Mortgage Rider

(“Rider”) which must be signed by borrowers and recorded along with MFA second

mortgages in cases where a down payment assistance (DPA) loan is combined

with a first mortgage loan that is insured by FHA. The Rider does not apply to DPA

funded through an MFA grant.

The Rider contains the required language that clarifies the disposition of the

second mortgage in the event of a default, subsequent foreclosure and FHA claim

as required by 24 CFR §203.41 (4000.1 Handbook pg. 341 (rev. 12-30-17).

Effective with Reservations dated August 10, 2018 or after, upon Compliance

Approval, the Rider now automatically appears on the list of documents available

to print within MFA’s On-line Reservation System. Lenders must print the form and

have it signed at closing and recorded with the Second Mortgage. The original

recorded Rider must be included with the final follow up documents mailed to MFA

along with the original recorded second mortgage.

Following is the language contained in the Rider:

“Any restrictions on conveyance in any loan document or mortgage will

automatically terminate if title to the mortgaged property is transferred by

foreclosure or deed in lieu of foreclosure, or if the mortgage is assigned to the

Secretary of HUD.

Notwithstanding the termination of any restrictions on conveyance as provided in

this Rider, the Mortgage shall otherwise remain in full force and effect.”

Thank you for participating in MFA’s programs. Should you have any questions,

please contact your MFA Homeownership Representative directly or the office at

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DATE: August 13, 2018

RE: Memo No. 18-07

March 2018 Webinar Training Schedule

MFA Single Family and DPA programs regular monthly training

MFA is hosting its regular webinar training for the MFA single family and down

payment assistance (DPA) programs.

This training is designed for staff whose duties involve originating, processing,

closing and shipping MFA loans. This technical training provides Participating

Lenders with the information needed to efficiently originate, fund and deliver loans

under the current programs guidelines.

Single Family and DPA Programs Webinar Training Date:

Wednesday, August 15, 2018 9:30 am-11:00 am MDT

To Participate:

Register via the MFA lender training link http://www.housingnm.org/lender-

training.

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In order for MFA to e-mail registered individuals the training materials and to track

attendance, please register no later than 5 pm MDT on the business day prior to

the training.

Below is the call in number, access code and link for the webinar. Please sign in

at least five minutes before the scheduled webinar time to accommodate any

software requirements.

Conference Dial-in Number: (415) 655-0002

Participant Access Code: 806 656 355

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Thank you for participating in MFA’s program. Should you have any questions,

please contact a MFA homeownership representative.




MFA





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One week left to register for the Housing Summit

at regular rates!

The 2018 New Mexico Housing Summit is on track to be one of the largest summits in

recent history! The REALTORS® Association of New Mexico and the New Mexico

Coalition to End Homelessness are incorporating their annual conferences into the

summit. A host of property owners and managers, developers and other housing

professionals from across the state and region will also attend. Don't miss this one-of-

a-kind opportunity to network, learn and have fun!

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Special Housing Summit Sessions for

NMMLA Members!

Don't miss NMMLA's special Summit guest:

Dr. Drew Dooley

As a Life Mastery Consultant certified by the Life

Mastery Institute, Dr. Drew Dooley inspires and

empowers all those that are drawn to her to live their

lives in alignment with their highest purpose. A

sought-after speaker and trainer, Dr. Dooley

specializes in helping REALTORS®, business

owners, entrepreneurs and anyone with a

passionate desire to build their dreams break

Other NMMLA sessions:

T2 The Latest from Washington D.C.: Policy Updates for Lenders Joseph Pigg, Senior

VP and Counsel,

American Bankers

Association

Sept. 13 10:30 AM

T24 Understanding the Manufactured Home Transaction Scott Florez, VP,

Alliant National Title

Sept. 13 2:30 PM

The 2018 NM

Housing Summit:

100+

REALTORS

400+

attendees

50 sessions

National

speakers

Networking

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through limitations and achieve greater results than

they have ever known before.

Thursday, September 13 3:45 - 5 PM

NMMLA members have a deeply discounted

registration fee. And, they can choose to attend

as much or as little of the summit as they would

like. Click here to go to the NMMLA registration

site to register today!

Our Partners

opportunities

Go to:

NM Housing Summit

for a complete agenda

and session times.


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It's New! And It's Coming Soon!

MFA's new down payment assistance program is on its way to YOU!

NO monthly payments

ZERO interest charges

BUDGET-FRIENDLY assistance for low-income borrowers

Watch your email for a very special MFA announcement coming soon!

New Mexico Mortgage Finance Authority, 344 Fourth St. SW, Albuquerque, NM 87102

505.843.6880 800.444.6880

https://mailchi.mp/40f3c3812c79/new-down-payment-assistance-program-coming-from-mfa?e=%5bUNIQID%5d


FOR IMMEDIATE RELEASE CONTACT: Leann Kemp August 30, 2018 w: 505 767-2254 c: 505-235-1994 [email protected]

MFA RECEIVES $3.6 CAPITAL MAGNET FUND AWARD

Funds to provide down payment assistance to low-income homebuyers

ALBUQUERQUE: The U.S. Department of the Treasury has awarded the New Mexico Mortgage Finance

Authority $3.6 million from its Community Development Financial Institutions (CDFI) fund, MFA

announced today. A total of $120 million in grants were awarded to 40 CDFIs and non-profit housing

organizations, which were selected from 120 applicants. MFA was one of only five state housing

finance agencies to receive funding.

Capital Magnet Funds must be used to support the development, purchase and preservation of

affordable housing and to finance related economic development and community service facilities.

MFA will use the $3.6 million award to capitalize its affordable housing fund, which provides down

payment assistance to low-income homebuyers in the state. MFA is on track to see a 25 percent

increase in the number of down payment assistance that has been provided in the last two calendar

years.

“A record-breaking number of New Mexicans have used MFA’s down payment assistance programs to

buy homes over the last two years,” said Jay Czar, executive director of MFA. “We are extremely

pleased that we can now expand those programs to help even more New Mexicans become

homeowners. These families will experience the financial and emotional security that comes with

being a homeowner.”

Through MFA’s new Capital Magnet-funded program, HomeNow, qualifying low income first-time

homebuyers in economically distressed communities can receive up to $8,000 to help cover down

payment and closing costs. There is no monthly payment required, and the loan is forgiven after 10

years if the borrower has occupied the home during that time and has not sold or refinanced.

Borrowers must occupy the home as their primary residence, and must successfully complete a

homebuyer education class.

“One of the most exciting things about the HomeNow program is that it provides down payment

assistance to low income homebuyers who would probably not be able to buy a home on their own,”

said Jeff Payne, MFA’s senior director of homeownership. “And we know that for many families,

homeownership can be a transformative tool that helps them stabilize and become financially secure.”

Households with incomes at or below 80 percent of the area median income are eligible for down

payment assistance through the HomeNow program. While area median income levels vary by county,

the average income for a New Mexico family of four earning 80 percent of the area median income is

approximately $43,000.

About MFA

The New Mexico Mortgage Finance Authority is a quasi-governmental entity created in 1975 to provide

financing for housing and other related services for low- and moderate-income New Mexicans. Using

funding from housing bonds, tax credits and other federal and state resources, MFA creates new

affordable housing, makes existing homes more energy efficient and supports affordable rental

housing. The organization also provides funding for emergency housing for people experiencing

homelessness, supportive housing for individuals with special needs, and rent and utility assistance.

MFA is self-supporting and receives no operational money from the state of New Mexico. In 2017, MFA

provided more than $552 million in low-interest financing and grants for affordable housing and

housing services throughout the state. The organization manages an average of $2.9 billion in assets.

###


Only six more days to register at regular summit prices! Register by September 12 and Save $50. Register now >

Event Highlights

• Tour of Sawmill Land Trust

• Tuesday night meetup at Ponderosa Brewing Co.

• 40 Vendors

• Reception with music by Le Chat Lunatique

• CE classes for REALTORS

Our Partners

Sessions include:

Moving to Where the Puck Is Todd Clarke

Finding the $$ Diane Ogawa

Tribal Construction Joyce Allen, USDA

Fair Housing and Criminal History Mark Shelburne

Transgender 101 Adrien Lawyer

Housing Tax Credits Investor Panel

Energy Efficiency Sara Rain Stewart




MFA


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Regular Registration Rates End Today! Register by midnight, August 31, to register at the standard rate.

For more summit information, click here

REGISTER ONLINE NOW >




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DATE: September 4, 2018

RE: Memo No. 18-14

New DPA program announcement: HomeNow

MFA is pleased to announce the release of our new down payment assistance

program, HomeNow. Reservations for HomeNow will be accepted beginning

at 9:00am MDT on September 4, 2018.

HomeNow is a second mortgage loan available to first-time homebuyers with

income at or below 80% AMI. It is a zero-percent, non-amortizing loan, meaning

that no monthly payments are required. The loan will be forgiven after the ten-year

maturity date, provided that the borrower continues to occupy the home and does

not refinance, transfer title, sell, rent or otherwise vacate the residence for a full ten

years. The complete forgiveness terms are outlined in the note and mortgage,

samples of which may be viewed on our website.

HomeNow must be used in conjunction with MFA’s FirstHome (first mortgage)

loan. Lenders are responsible for following all applicable regulatory guidelines with

respect to required disclosures. A $100 origination fee and applicable recording

fees may be charged.

The HomeNow note and mortgage are MFA-specific and will print directly from

MFA’s loan reservation system subsequent to receiving compliance approval. The

loan will close in lender’s name and be funded by the lender.

In instances where the FirstHome loan is FHA-insured, it will be necessary to have

the borrower execute the HUD Rider at closing. For information about the HUD

Rider, refer to Lender Memo No. 18-12, issued on August 10, 2018. View here:

http://www.housingnm.org/lender_memos/view/urgent-new-closing-document-hud-

second-mortgage-rider

Income limits for HomeNow are determined by county and number of persons in

household. The chart is contained in the attached Program Policy. Acquisition cost

limits are also outlined in the Program Policy. Please note that income and

purchase price limits are based on lesser published amount from either HomeNow

or FirstHome. Lenders will need to perform a side-by-side comparison in order to

assure that the correct income and purchase price limits are applied.

MFA is hosting a special webinar training for the Home Now down payment

assistance (DPA) program.

This training is designed for staff whose duties involve originating, processing,

closing MFA loans.

HomeNow DPA Programs Webinar Training Date:

Wednesday, September 06, 2018 3:00 – 3:30 PM MDT

Tuesday, September 18, 201810:00 – 10:30AM MDT

To Participate:

Register via the MFA lender training link http://www.housingnm.org/lender-training.

http://www.housingnm.org/lender_memos/view/urgent-new-closing-document-hud-second-mortgage-rider

http://www.housingnm.org/lender_memos/view/urgent-new-closing-document-hud-second-mortgage-rider


In order for MFA to e-mail registered individuals the training materials and to track

attendance, please register no later than 5 pm MDT on the business day prior to

the training.

The HomeNow Job Aid is available on MFA’s website. The Job Aid provides a

concise recap of program requirements. It is intended for use ONLY by lenders

and real estate professionals. MFA will not provide a consumer marketing piece for

this program as lender are responsible for meeting consumer disclosure

requirements.

Thank you for participating in MFA’s programs. Should you have any questions,

please contact your MFA Homeownership Representative directly or the office at

505-843-6880.




MFA





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Online registration ends Wednesday, September 5! Register now >

Event Highlights

• Opening plenary speaker Elliot Eisenberg

• 50 breakout sessions including CE classes

• 125 speakers, 450 attendees, 45 vendors

• Opening reception with the Burt Dalton Trio

For complete summit information, go to: 2018 NM Housing Summit >

Our Partners

Sessions include:

LIHTC for Non-Developers Panel

Better Not Call Saul ABQ Police Dept.

Understanding the Manufactured Home Transaction Scott Flores

Engaging Hard-to-Serve Clients Abraham Placencio

Executive Coaching Launi DeYoung

Healthy Homes for Tenants Panel

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