NM Housing Innovation Program Can Be the Last Bucket of Money

What happens if a development doesn’t qualify for one of Housing New Mexico’s many regular affordable housing programs? Look at the quasi-governmental entity’s Housing Innovation Program for projects that don’t fit into its regular funding buckets.

A good example is the nonprofit Saranam’s northwest campus (there is also a northeastern campus) in Albuquerque. Housing New Mexico has funded the ADC Family Campus project, transitional housing for the formerly homeless, for $732,000 through its innovation program, says Isidoro Hernandez, executive director of the housing finance agency. This provided the last gap financing that allowed the development to go forward.

“We’ve been very fortunate and grateful that over the last couple of years, we’ve received quite a significant amount of state funds into the New Mexico Housing Trust Fund,” says Hernandez. That money is being used in a couple of areas, one is the Housing Innovation Program.

“If you have a housing need, and it isn’t addressed by one of the other programs we have, you can apply under the Housing Innovation Program,” he says. “Invariably there’s a need that doesn’t fit into the 40 buckets of programs we have.”

Hernandez says anyone is eligible to apply, including nonprofits, for-profits, local governments, and tribal governments.

The nonprofit developer’s focus is on families, says Hernandez, usually a mother and her children but sometimes a father and children as well.

“They have a very good success rate for people to go into that program and then two years later transition and live on their own.”

While Saranam had other financing sources, with a total development cost for ADC Family Campus of $12.3 million, says Hernandez, “We were the last gap financing needed to complete the 23 units. We were the last piece they needed.”

Saranam was not eligible for traditional affordable programs, like the Low Income Housing Tax Credit, because they charge no rent for their units, meaning no cash flow for investors.

Sources of Funding
Tracy Weaver, executive director of Saranam, details other major sources of financing for the project (contributions and grants are most of their funding). There was a $1 million donation from ADC LTD, NM, (The ADC Family Campus is named for donor Arthur Donald Cordova) $750,000 from the New Mexico Governor’s Casa Connection program, $1.7 million from the J.E. and L.E. Mabee Foundation and $1 million provided by Community Project Funding through New Mexico lawmakers Rep. Melanie Stansbury and Sen. Martin Heinrich.

“We have a lot of really generous institutions, as well as individual donors,” says Weaver.

The money was used by Saranam to buy mobile portable classrooms at auction. These are then rehabilitated into two- and four-bedroom apartments after being moved into place atop foundation piers. ADC will have 13 two-bedrooms and ten four-bedrooms (the four-bedrooms use one and a half portable classrooms) on the campus.

After redoing the insides, “We stuccoed the outside and they look like little townhomes,” says Weaver.

ADC Family Campus joins a Saranam campus in northeast Albuquerque, where the group bought an existing 24-apartment complex in 2005. Saranam’s ADC Family Campus has been in the works since 2015, says Weaver, and it will more than double the group’s capacity.

The capital campaign that got started in March 2020 was delayed for a year due to the pandemic. Saranam bought the ADC property in 2021, did site prep and broke ground in 2022. The first section, ten units, has been completed, with families moving in, in November 2024, while 13 units are still under construction. The campus will have a donation center, community center and playground.

“They have a great model,” says Hernandez. “Every year in August they bring a cohort of families in. Families come in and they move into a rent-free furnished apartment with pantries full of food.” Those families replace ones “graduating” from the program after a two-year residency.

Clients also receive a stipend for the month, he says. “They enter the program, and then two years later, hopefully, they have accomplished all the goals they set out upfront. It’s a very unique model, and they have a great success rate,” says Hernandez.

Weaver says that “they [residents] work on increasing their education, get their GED, vocational certificate or a degree, associate or bachelor.”

Saranam has a robust set of supportive services. Case management works closely with residents, adds Weaver, to maximize what they get out of the program.

Near the end of their time at Saranam, tenants typically get jobs and save their money so they can afford housing on their own outside the program.

Saranam a Refuge
Saranam (the word means “refuge” in Sanskrit) got its start via a $4 million estate gift to Central United Methodist Church to end homelessness for families, says Weaver.

She says the program has achieved a 77 percent rate of success at exit and an 82 percent stability rate over time.

Demand is great, though. Weaver says 19 families moved in last year, but there were 120 applications. Applications are received from any of 140 organizations.

Does Saranam plan a third campus? Yes, says Weaver “I don’t know exactly what that is going to look like or where, but our board has already done a lot of visioning and beginning stages of strategy.” Possible locations are other parts of New Mexico, Colorado, Oklahoma and Texas.

Hernandez says he hopes Saranam does more in Albuquerque and even expands to provide technical assistance to other developers around the state interested in doing something similar.

“This is the first time we have funded them,” he says. The tenants’ status as formerly homeless means they generally have very low incomes, “way below” 30 percent of area median income.

Hernandez says there have been preliminary talks with Saranam about working together on other projects.

According to its most recent annual report, Saranam’s housing services include:

• Furnished apartment;
• Transportation assistance;
• Household supplies;
• Toiletries;
• Internet service;
• Diapers; and
• Case management.

The group has a robust number of educational and community services as well.

Measures of Success
Saranam has served 191 homeless families, including 409 children and 216 adults, during its 20 years in operation, it reported in its 2024 annual report. “Families successfully exit the Saranam program having met three or more of our measures of success, indicating that they are able to be fully self-sufficient. This includes the ability to pay for their housing, utilities and other living expenses.”

In addition to Saranam’s ADC Family Campus, last year Housing New Mexico funded “seven or eight” developments through the innovation program, says Hernandez, above the formal goal of three to six per year. Projects have included two grants to tribal programs, at the San Felipe and Ohkay Owingeh pueblos (Native villages).

Other grants have funded ramps for a senior facility and housing to facilitate workforce integration for people newly out of correctional facilities. While Housing Innovation Program funding often is gap finance, that can vary, with Housing New Mexico financing 100 percent of the ramp buildout, for instance. Multifamily projects tend to be gap financing, says Hernandez.

The usual average grant is small, with the smallest in the $300,000 range (for a rural “tiny home” project) and the highest going for $1 million (that one was for mobile homes).

Will there be an expansion of the innovation program? “That depends on the funds we receive,” says Hernandez. “It would be nice to increase it. We have a great track record and a great list of more than 300 organizations across the state we work with.”