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

SPONSOR McSorley

ORIGINAL DATE

LAST UPDATED

1/21/2008

HB

SHORT TITLE Home Buyer Education Program

SB 192

ANALYST Leger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Mortgage Finance Authority (MFA)

SUMMARY

Synopsis of Bill

Senate Bill 192 appropriates $1 million from the general fund to the Department of Finance and

Administration (DFA) for disbursement in FY09 & FY10 to MFA to create and implement a

comprehensive statewide Housing Counseling program.

FISCAL IMPLICATIONS

The appropriation of $1 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY10 shall revert to the

general fund.

SIGNIFICANT ISSUES

The need for a comprehensive housing counseling program to enable New Mexico homebuyers

to avoid the many pitfalls surrounding the mortgage markets is important. A comprehensive

plan would provide those homebuyers with the tools that will allow them to become successful

home owners, who can afford to live in the homes they purchase.

Senate Bill 192 – Page

2

PERFORMANCE IMPLICATIONS

MFA reports the funds will be spent as follows:

•

Capacity Building-

MFA will use approximately $220,000 to provide capacity building

training to various non-profit Housing Counseling agencies throughout the state based on

greatest need. In many cases, there is a strong desire by non-profit agencies to

provide Housing Counseling services throughout the state, but these agencies lack the expertise

to manage the business aspect of a Housing Counseling program (marketing, record

keeping, managing match requirements, reporting, etc.) MFA will use approximate $100,00 to

provide comprehensive training to interested non-profits on how to manage a successful Housing

Counseling program. The remaining $100,000 will be passed on to various non-profits to fund

the costs associated with capacity building at the agency level.

•

Curriculum Development-

MFA will use approximately $220,000 to provide training to

interested non-profits to develop various types of Housing counseling training curriculum,

including pre-purchase counseling, post-purchase counseling, foreclosure prevention counseling,

and financial literacy. MFA will contract with nationally HUD-certified Housing Counseling

training organizations (i.e. Neighborworks) to provide training to interested non-profit

organizations.

•

Online pre-purchase counseling-

MFA will use approximately $500,000 to develop and

maintain a comprehensive and high-quality online pre-purchasing counseling module for MFA

first-time homebuyers. The module will provide certification to all tax-exempt mortgage revenue

bond borrowers to ensure a high level of knowledge about the home buying process, including

appropriate financing for first time homebuyers, budgeting, home maintenance costs, etc. MFA

will make the program available to the approximately 2000 first-time homebuyers that use MFA

financing each year.

•

Program Administration-

MFA will use approximately $60,000 for program administration,

including manuals, documents, staff training, etc. to provide a comprehensive Housing

Counseling program to interested non-profit organizations throughout New Mexico.

ADMINISTRATIVE IMPLICATIONS

Program will be administered by MFA.

TECHNICAL ISSUES

MFA believes Subsection G as introduced in the bill may be incorrect. They site Subsection H

of Section 58-30-7 NMSA 1978 to be correct.

JLL/mt