N.M. Stat. § 27-2A-6
Hardship waiver.
The department shall waive the application of the provisions of the Medicaid Estate
Recovery Act if application of the provisions would work an undue hardship as
determined pursuant to regulations adopted and promulgated by the secretary of human
services. The regulations shall include a provision for special consideration when an
asset subject to recovery is the sole income-producing asset or is a homestead of
modest value.