North Carolina would fund affordable homes and help renters

State agencies would fund affordable housing, construction training, neighborhood improvements, and housing discrimination investigations. The programs would serve housing needs across North Carolina. Construction grants would serve eligible public colleges, universities, technical schools, and licensed residential construction employers. The Housing Finance Agency’s outstanding bonds and loan notes would be capped at $18 billion. Notes awaiting bond sales would not count once bonds had been issued to pay them. The Housing Innovation Office would receive $5 million yearly for operations, housing research, and practical support. The Housing Trust Fund would receive $50 million yearly. Trust Fund money could support a competitive affordable housing program. Assistance to an area served by a local housing trust fund could not exceed $2 million. The local fund would need to match assistance dollar for dollar with private money. People transferring property would pay $1 per $500 of value up to $500,000 and $1 per $400 above that amount. Partial amounts would count as full increments. Counties would keep half the proceeds collected at the 0.2% rate, plus the allowed collection expense; the rest would go to the state’s general fund after refunds. The bill links the tax to Housing Innovation Office funding. Funding would begin in fiscal year 2026–2027, effective July 1, 2026. The transfer tax would apply to transfers on or after July 1, 2026. The borrowing cap would apply when the bill becomes law.

Local governments would allow specified housing without special permits and meet deadlines for checking development applications. The rules would cover North Carolina local governments and the specified residential projects. A separate rule would require local plans to address fair distribution of affordable housing. Residential areas allowing detached single-family houses would allow at least one attached and one detached smaller home for each house. These homes would need to meet residential and fire codes and could be built with or after the main house. Residential projects with at least 20 homes per acre would qualify without special permits if within one-half mile of a transit stop or in a designated district built around transit. Local governments would check qualifying affordable-project applications within 30 days and residential projects with fewer than 100 homes within 60 days. These checks would determine completeness, rather than guarantee approval. The 30-day rule would require at least eight homes and a promise to accept housing vouchers. At least 20% of homes would serve households earning no more than 80% of the area’s middle income, or at least 10% would serve those earning no more than 60%. Affordability protections would last at least 30 years, and homes would meet safety and living standards. Development rules would take effect July 1, 2026. The local planning duty would take effect when the bill becomes law.

Eligible taxpayers would receive housing tax breaks, and state agencies would fund home buying, housing repairs, rural utilities, and hotel conversions. Benefits would cover eligible donors, first-time home buyers, lower-income manufactured-home residents, small rural rental buildings, and hotel or motel conversions in North Carolina. Housing Trust Fund donors could receive an income tax credit worth 30% of cash donations for affordable housing construction or upkeep. Total credits would be capped at $20 million yearly and reduced proportionally if claims exceeded that amount. Donors would apply by April 15 of the following year and keep proof of eligibility. If applications reopened, the deadline would be October 15. Credits could not exceed remaining tax owed. Donors would add back any federal deduction for the donation and could not claim another state credit for it. Taxpayers could deduct up to $15,000 yearly deposited into a first-time home buyer account holding less than $150,000 at a chartered North Carolina commercial bank. Money would pay down payment or closing costs for the buyer’s first main home in the state. Previously deducted money used otherwise would become taxable unless moved to another newly created eligible account. Yearly funding would include $3 million for the existing NC 1st Home Advantage Down Payment Program and $10 million for community land trusts. These trusts would keep ownership of land and lease it to buyers who purchase homes at below-market prices. Tax provisions would apply to tax years beginning on or after January 1, 2026; donation credits would cover donations on or after that date. Program funding would start in fiscal year 2026–2027, effective July 1, 2026.

The Housing Finance Agency would fund housing assistance, while eligible tenants would receive eviction lawyers and alternatives to upfront security deposits. Housing assistance would serve eligible people with low incomes or experiencing homelessness. Deposit alternatives would apply to tenants beginning leases. The Emergency Rental Assistance Fund would receive $30 million yearly for people with low incomes or experiencing homelessness. Assistance could not exceed six consecutive months per person or family. Timely rent payments would be reported to credit agencies. The Housing Finance Agency would receive $35 million yearly for housing combined with individual support for people and families experiencing homelessness. Support services would address serious mental health or behavioral challenges. A Rapid Rehousing Program would receive $20 million once for short-term rental and housing assistance and case management. Homelessness-program money could also fund local systems that assess needs and connect people with suitable assistance. People unable to afford a lawyer would be entitled to one in eviction proceedings covered by Articles 3 and 7 of Chapter 42. Assistance funding would begin in fiscal year 2026–2027, effective July 1, 2026. Lawyer coverage would apply to covered eviction cases brought on or after October 1, 2026. Deposit choices would take effect when the bill becomes law.

The Office of Recovery and Resiliency would fund disaster housing responses and voluntary purchases of repeatedly flooded homes. Funding would cover declared-disaster housing needs and qualifying repeatedly flooded homes. Insurance officials would separately study loans to help homeowners strengthen houses against hurricanes. An emergency housing response fund would receive $100 million once for housing needs caused by an event covered by a presidential major disaster declaration. A voluntary buyout fund would receive $50 million once to purchase homes experiencing repeated natural-disaster flooding in repeatedly flooded areas. The office could pay up to 110% of a home’s pre-disaster market value. Recipients who failed to meet the terms for receiving money would have to return or forfeit funds received or used improperly or for purposes that did not qualify. The State Building Code Council would write rules for faster permits and flexible building requirements when rebuilding the same kind of structure after a disaster. Disaster funding would be for fiscal year 2026–2027, effective July 1, 2026. The hurricane loan study would start when the bill becomes law, with a report due January 1, 2027.