Section 1.

Increases the cap in GS 122A-8 on bonds and notes issued by the NC Housing Finance Agency from $12 billion to $18 billion.  

Modifies the excise tax in GS 105-228.30 levied on each instrument by which any interest in real property is conveyed to another person by creating the following two tiers: (1) $1 on each $500 or fractional part thereof on the consideration or value of the interest conveyed up to $500,000 and (2) $1 on each $400 or fractional part thereof on any remaining consideration or value of the interest conveyed (currently, just $1 for every $500 of the value of the interest or consideration conveyed). Now requires the finance officer of each county to credit one-half of the proceeds of the tax levied at a rate of 0.2% to the county’s general fund and credit the remainder as described. Allows the county to retain 2% of the tax proceeds of the tax levied at a rate of .2% (was, county retained 2% of the tax proceeds) allocated for remittance to the Department of Revenue (DOR). Applies to conveyances made on or after July 1, 2025.

Offset by the excise tax described above, appropriates $5 million from the General Fund to the Housing Finance Agency (Agency) in recurring funds for each year of the 2025-27 biennium to be allocated to the Housing Innovation Office (Office) for administrative and operational costs and research and implementation of housing solutions, including technical assistance, grants, loans, and other measures designed to address the housing crisis by supporting the construction and maintenance of affordable, supportive, and sustainable homes and developing innovative funding models and building techniques. Effective July 1, 2025.

Appropriates $50 million from the General Fund to the Housing Trust Fund (Fund) in recurring funds for each year of the 2025-27 biennium to be used for its statutory purposes, and at the discretion of the Housing Finance Authority (Authority) for a competitive program to provide funds to local housing authorities, local housing trust funds, or other entities that have the primary purpose, and agree to use the funds for, loans, grants, or both for construction and maintenance of affordable housing units in the State. Tasks the Office with developing the application process. Specifies that funding in the program is reserved for properties that (1) financial assistance to an area served by a local housing trust fund does not exceed $ 2 million and (2) the local housing trust fund contributes $1 of private funds for every dollar of assistance received from the Office. Effective July 1, 2025.

Enacts GS 105-153.12, authorizing a taxpayer making a qualified contribution to take a credit against their individual income tax imposed under Article 4, Part 2 of GS Chapter 105 equal to 30% of the donation. Defines qualified contribution as a monetary donation to the Fund for the construction, maintenance, or both, of affordable housing. Provides for an application to claim the credit. Requires the taxpayer to maintain and make available for inspection records the Secretary of Revenue (Secretary) considers necessary to establish and verify the amount of the credit to which they are entitled to claim. Limits the total aggregate amount of all credits allowed to taxpayers under GS 105-153.12 to $20 million. Establishes priority tiers for funding of credits. Allows for prorating of credit, if the amount claimed in total exceeds the $20 million cap. Requires a taxpayer claiming a credit to add back to taxable income any amount deducted under the tax code for qualified contribution. Prevents a taxpayer claiming the credit from claiming another credit for the same qualified contribution. Effective for taxable years on or after January 1, 2025, and applies to qualified contributions made on or after that date.

Section 2.

Enacts Part 1A, concerning housing production and affordability to Article 9 of GS Chapter 160D.

Requires, in GS 160D-917, a local government to allow by right, without requiring a conditional use or special use permit, the following: (1) the development of at least one attached and one detached accessory dwelling unit which conforms to the North Carolina Residential Code for One- and Two-Family Dwellings, including applicable provisions from fire prevention codes, for each single-family detached dwelling in areas zoned for residential use that allow for development of single-family detached dwellings, as specified; and (2) a development in an area zoned for residential use with at least 20 units per acre that is located with one-half mile of a transit stop or that is within a transit-oriented development district or similar designation. Provides for administrative review by a local government of any application for development approval of a qualifying affordable development (defined) in GS 160D-917.1. Provides for lot size and density for affordable housing, as described, in GS 160D-917.2. Effective July 1, 2025.

Section 3.

Increases the number of other deductions a taxpayer may deduct from its adjusted gross income under GS 105-153.5 to include the amount deposited during the taxable year, not to exceed $15,000, to a first-time homebuyer savings account (that has less than $150,000) to be used for eligible expenses (downpayment and any closing costs included on a real estate settlement statement, including appraisal fees, mortgage origination fees, and inspection fees) by a qualified beneficiary. If the taxpayer withdraws funds from a homebuyer savings account and does not use it for eligible expenses, and it was listed as a deduction during the prior tax year, requires the taxpayer to add it to the taxpayer’s adjusted gross income during the year it was withdrawn. Effective for taxable years beginning January 1, 2025.

Appropriates $3 million from the General Fund to the Agency in recurring funds for each year of the 2025-27 biennium to be used for the NC 1st Home Advantage Down Payment Program for uses consistent with that program. Effective July 1, 2025.

Appropriates $10 million from the General Fund to the Agency in recurring funds for each year of the 2025-27 biennium to be used for a program to establish new, and expand existing, community land trusts with the primary purpose of facilitating affordable homeownership by retaining ownership of the land and leasing it to homeowners who purchase the house on that land at below-market pricing. Requires the Agency to develop an application process in line with the seven listed required program guidelines including that recipients provide at least 3% down payment and have less than $100,000 in total household assets. Effective July 1, 2025.

Appropriates $15 million from the General Fund to the Department of Commerce (DOC) in recurring funds for each year of the 2025-27 biennium to be used for the Rural Water Extension Program, open to rural communities with populations of 10,000 or less that apply to obtain technical assistance and necessary financing necessary for the purpose of developing drinking water and waste disposal systems to ensure safe drinking water and sanitary waste disposal systems for public health and economic vitality of rural communities of the State. Effective July 1, 2025.

Enacts GS 105-153.13, establishing a tax credit for rural affordable rental housing for a taxpayer that is allowed for the taxable year a federal income tax credit for low-income housing under section 42 of the IRS Code with respect to a qualified North Carolina low-income building located in a qualifying rural area, allowing a credit for each affordable rental unit for the taxable year within which the construction of the affordable rental unit is completed. Specifies that the amount of the credit is equal to the lesser of $25,000 or 30% of the construction costs incurred. Specifies that credit allowed may not exceed the amount of tax imposed for the taxable year reduced by the sum of all credits allowable, except payments of tax by or on behalf of the taxpayer. Prevents a taxpayer claiming the credit from claiming another credit for the same activity. Effective for taxable years beginning January 1, 2025.

Appropriates $10 million from the General Fund to the Authority in recurring funds for each year of the 2025-27 biennium to be used for a manufactured home supply program for local governments, as described, not to exceed $25,000 per manufactured home. Effective July 1, 2025.

Section 4.

Appropriates $150 million from the General Fund to the Department of Public Safety (DPS), Office of Recovery and Resiliency (NCORR) for 2025-26 to be used as follows: (1) $100 million to establish an emergency housing response fund available to NCORR to respond to housing needs after, and due to the event on which is based, a major disaster declaration by the President of the United States under the Stafford Act (P.L. 93-288) and (2) $50 million to establish a voluntary buyout fund to purchase homes undergoing, and located in areas subjected to, repeated flooding due to natural disasters. Authorizes NCORR to purchases a qualifying home for up to 110% of the pre-disaster fair market value of the home. Effective July 1, 2025.

Requires the Department of Insurance (DOI) to study the feasibility, and the best method of implementing, a low-interest loan program to provide loans to homeowners for costs associated with strengthening residential structures to withstand hurricanes, as specified, and report its findings to the General Assembly and the Fiscal Research Division (FRD) by no later than January 1, 2026.

Section 5.

Directs the Office to study methods of incentivizing the construction of, and increasing the affordability of, housing options for rent or sale, as specified, and report its findings to the General Assembly and FRD by no later than January 1, 2026. Starting January 1, 2025, and at least once every biennium, requires the State Auditor to audit all housing programs administered by a State agency that have a budget of $10 million or more.

Section 6.

Enacts GS 105-153.14 authorizing an owner of a hotel or motel providing lodging accommodations for pay located in this State with at least 30 rooms for short-term rental is to claim a credit against the tax imposed for each affordable rental unit created from the conversion of one or more rooms. Sets the amount of the credit as equal to the lesser of (1) 30% of the cost of conversion or $40,000. The credit is allowed for the taxable year within which the conversion is completed. Specifies that credit allowed may not exceed the amount of tax imposed for the taxable year reduced by the sum of all credits allowable, except payments of tax by or on behalf of the taxpayer. Specifies that the tax credit does not apply to costs paid with funds provided by a State or federal agency or program. Prevents a taxpayer claiming the credit from claiming another credit for the same activity. Effective for taxable years beginning January 1, 2025. Directs the State Building Code Council to adopt rules establishing an expedited permitting process of no more than 45 days and code flexibility for the conversion of hotel and motel rooms into affordable rental units (1) for which a tax credit is allowed as described above and (2) where there is an existing building footprint.

Appropriates $2 million from the General Fund to the Agency for 2025-26 to be used for an accommodation conversion program to provide funding to offset certain costs involved in converting hotels and motels into affordable rental units for permanent housing, as specified. Effective July 1, 2025.

Section 7.

Appropriates $30 million from the General Fund to the Agency in recurring funds for each year of the 2025-27 biennium to be used for an Emergency Rental Assistance Fund established by the Agency, to provide assistance to persons of low income or who are homeless, as described. Effective July 1, 2025. Entitles indigent persons to assistance of counsel in summary ejectment proceedings under GS 7A-541. Effective October 1, 2025, and applies to actions for summary ejectment brought on or after that date. Authorizes tenants to either (1) pay their security deposit in an installment payment plan agreed upon by the landlord and tenant, not to exceed the lease term or the six months from the start of the lease term, whichever is less; or (2) to provide security deposit insurance (defined) as a substitute for a security deposit, as described, in new GS 42-57.

Section 8.

Appropriates $35 million from the General Fund to the Agency in recurring funds for each year of the 2025-27 biennium to be used to work with local housing authorities to use the funds appropriated in this section to provide combined housing and wraparound services to persons and families experiencing homelessness. Appropriates $20 million from the General Fund to the Agency to be used for a Rapid Rehousing Program established by the Agency to work with local housing authorities to use the funds appropriated to provide temporary, short-term rental and housing assistance and case management services to persons experiencing homelessness. Authorizes the funds appropriated to also be allocated by the Agency to any local housing authorities established under GS Chapter 157 that request funds to establish coordinated entry systems designed to ensure that all people experiencing a housing crisis have fair and equal access to rental and housing assistance.

Effective July 1, 2025.

Section 9.

Enacts new Part 21A to Article 10 of GS Chapter 143B termed, “The Housing Innovation and Affordability Advancement Act”, as follows. Defines Department, construction skilled trade, and institution of higher education. Establishes the Housing Construction Development Program (HCDP) in DOC, comprised of a workforce development grant program, apprenticeship development grant program, and innovation assistance grant program. Appropriates $50 million from the General Fund to DOC in recurring funds for each year of the 2025-27 biennium for the HCDP to be allocated in the specified amounts for the described purposes. Effective July 1, 2025.

Section 10.

Appropriates $3 million from the General Fund to the NC Human Relations Commission (HRC) in recurring funds for each year of the 2025-27 biennium to be used by HRC to actively investigate, identify, and report to the Attorney General discriminatory practices in the housing market that violate the State Fair Housing Act. Appropriates $25 million from the General Fund to DOC in recurring funds for each year of the 2025-27 biennium to establish a special account known as the Equitable Development Account to identify historically underinvested neighborhoods and provide funds to the local government units in which identified neighborhoods are located to construct, improve, and repair water, sewer, electrical, transportation, and other infrastructure. Effective July 1, 2025.

Expands the contents of a comprehensive plan under GS 160D-501 so that it must also analyze, evaluate, and require the implementation of equitable distribution of affordable housing.