The New Mexico Mortgage Finance Authority (MFA) sold $125 million in bonds to fund affordable mortgage loans.
The bonds mature between 2025 and 2054, yielding between 3.9% and 6.5%. They received a rating of Aaa from Moody’s Investors Service.
Moody’s analysts said the rating reflected “high quality of the collateral” and the “stable overcollateralization of the program,” writing that they “expect profitability to rise on the future revenues those bond issuance create.”
The MFA has expanded efforts in recent years to combat a shortage of affordable rental housing. The authority provided more than $400 million in affordable-rate mortgages last year, helping more than 2,000 New Mexicans buy homes, according to the MFA’s 2022 annual report.
That still fell well short of filling the state’s housing needs. A study commissioned by the authority last year found that there is a shortage of 32,000 units for New Mexico renters making less than 30% of median area income.
The state legislature has made some efforts to increase the MFA’s revenue. Last year, the state passed a bill that dedicates 2.5% of annual severance tax bond capacity to a fund managed by the authority.
The bonds are special obligations of the authority, secured by the revenue and assets of the mortgage program.
RBC Capital Markets, LLC and Raymond James & Associates, Inc served as underwriters on the issuance, purchasing the bonds for $128 million. The price reflected a premium of $3 million.