New Mexico FHA Loan

FHA-backing creates loan options for borrowers even with credit scores in the 500s.
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What is a New Mexico FHA Loan?

New Mexico FHA loans are home loans featuring low risk to lenders, and hence less severe requirements and conditions for borrowers. This is on account of such loans being backed by the Federal Housing Administration (FHA) or the US Department of Housing and Urban Development (HUD). That is, FHA loans provide the lender with the guarantee that, in case the borrower finds his or herself unable to make a loan payment, the government will step in and cover a portion of the payment owed. It is for these reasons that FHA loans are ideal for individuals looking to buy a home (though they can have other uses, such as helping along with renovation projects or refinancing a mortgage). Below, we at Online Loans have broken down the assorted information available across the web into a convenient need-to-know to make getting you FHA loan as simple as possible. Our mortgage calculator is also a great way to help determine what your home loan will cost you.


Obtaining an FHA loan in New Mexico requires a credit score of 620 or higher. Additionally, applicants are required to have a DTI ratio (debt to income ratio) of 43%, meaning all their monthly payments (including those for their new FHA loan) must be less than 43% of their income. It is also generally required that an applicant has two years of steady income, whether from one job or many. Taking out an FHA loan to buy a house also requires that the applicant intends to occupy the property they are purchasing, as opposed to purchasing a property to rent out. An appraisal must also be provided, and the borrower will need to provide the financing for any maintenance necessary for meeting the health and safety requirements relative to the region in which they are purchasing a property.

Rates (%)

When it comes to rates, there is no standard among lenders. There is, however, a fairly standard equation for determining what each individual FHA loan’s rate will be. For instance, in the case of FHA loans smaller than $625,500 (for 15 years or less), a borrower whose LTV is between 78.1% and 90% will have an annual insurance premium of .70%, which then can be used to calculate the monthly premium. Furthermore, rates will depend on the borrower’s credit history and financial standing generally. The more these pose a risk to a lender, the higher the rates will likely be. For tips on keeping a strong credit score, check out our credit rebuilding guide.

Maximum ($) Limits - By County

The Table below lists the various FHA loan maximums relative to each county in New Mexico. Download Formats: Excel (.xslx) & CSV