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Our Financing

A self-supporting agency, the North Carolina Housing Finance Agency sells bonds, administers tax credit programs, and uses state and federal funds to produce affordable housing in partnership with local governments, nonprofit housing producers, and for-profit developers. The financing is used to build rental apartments and homes, to rehabilitate rental and owner-occupied housing, to provide rent subsidies, and to assist home buyers.

The links below provide information about the federal and state resources that finance affordable housing in North Carolina.

Mortgage Revenue Bond Program
HOME Investment Partnerships (HOME) Program
Low-Income Tax Credit Program
State Housing Credit
North Carolina Housing Trust Fund

Mortgage Revenue Bond Program

The North Carolina Housing Finance Agency offers a below-market interest FirstHome Mortgage under the federal Mortgage Revenue Bond (MRB) program. The N. C. Housing Finance Agency sells tax-exempt Mortgage Revenue Bonds and uses the proceeds to finance the low-cost mortgages for first-time home buyers with low and moderate incomes. The Agency also converts part of its bond authority into Mortgage Credit Certificates, which provide a tax credit in conjunction with market-rate mortgages for first-time home buyers.

Statewide, the Agency has assisted more than 83,100 home buyers and financed more than $6.5 billion in housing through the mortgages and tax credits.

See Mortgage Revenue Bonds for more information

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HOME Investment Partnerships (HOME) Program

The North Carolina Housing Finance Agency administers the HOME Investment Partnerships Program for the state. Congress created this block grant program in 1990 to provide states and localities with a flexible funding source to meet their diverse housing needs. States receive 40 percent of total HOME funding, and localities receive 60 percent directly from the U.S. Department of Housing and Urban Development (HUD) based on a formula determining need.

The North Carolina Housing Finance Agency uses HOME funds to finance housing for low-income populations, including downpayment assistance, construction of homes and apartments, rehabilitation of owner-occupied homes, and rental assistance. The Agency uses HOME funds for Community Partners Loan Pool Program, Single Family Rehabilitation Program, and Rental Production Program for individual home buyers.

See the HOME Program for more information.

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Low-Income Housing Tax Credits

Authorized by Congress in 1987, federal Low-Income Housing Tax Credits (Housing Credits) now finance virtually all the new affordable rental housing being built in the United States. Housing Credit rental properties are privately owned and privately managed. In exchange for the financing provided through the tax credit, owners agree to keep rents affordable for a period of 15 to 30 years for families and individuals with incomes at or below 60% of the local median income.

The North Carolina Housing Finance Agency monitors the properties during the compliance period to ensure that rents and residents’ incomes do not exceed federal limits and that the properties are well maintained.

The owners are eligible to take a tax credit equal to 9 percent of the “Qualified Cost” of building or rehabilitating the property (excluding land). The tax credit is available each year for 10 years, as long as the property continues to operate in compliance with program regulations.

Generally, the privilege of using the credit is sold to an investor or group of investors (syndicated) and the funds are used to provide equity in the new rental development.

Equity from the sale of tax credits reduces the amount of debt financing that the property owner incurs. This reduces the monthly debt service for the property, lowers the operating costs, and makes it economically feasible to operate the property at below-market rents. Residents are responsible for their own rent payments, unless rent subsidies are available from other programs.

For more information on rental development, go to the Rental Developers, Owners and Managers section.

See Low-Income Housing Tax Credits for more information.

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State Housing Credit

The State Housing Credit was created by the North Carolina General Assembly in 1999 to be used in combination with federal Tax Housing Credits. The additional financing makes it possible to

  • build affordable apartments in low-income rural areas
  • reduce rents in urban areas
  • produce rental housing affordable to persons with disabilities.

The program is run by the North Carolina Housing Finance Agency in conjunction with the North Carolina Department of Revenue.

In addition to evaluating applications for credits, the North Carolina Housing Finance Agency monitors Housing Credit properties to ensure that

  • rents are maintained at the agreed levels
  • tenants’ incomes do not exceed the allowable limits
  • apartments are well-maintained.

No separate application is needed for the State Housing Credits. A development becomes eligible for state credits once the North Carolina Housing Finance Agency has approved an application for federal credits. If a development does not receive federal credits, it cannot receive state credits.

For more information on rental development, go to the Rental Developers, Owners and Managers section.

See State Housing Credits for more information.

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North Carolina Housing Trust Fund

The North Carolina Housing Finance Agency administers the Housing Trust Fund and pays all its operating costs. The Trust Fund was created by the General Assembly in 1987 using $19.8 million from a legal settlement the state received due to oil company overcharges. It is funded through annual appropriations.

The Trust Fund is the state’s most flexible housing resource – able to finance home ownership and rental apartments, new construction, rehab, and emergency repairs. It provides the state’s largest source of funds to finance supportive housing and emergency repairs/accessibility modifications. The Trust Fund has won three national awards for its innovative programs.

A separate board, the North Carolina Housing Partnership, sets policy for the Trust Fund. The Partnership Board consists of 13 members, including the Agency’s executive director, the secretary of the Department of Commerce, and the state treasurer. The General Assembly appoints the other 10 members, who represent low-income housing advocates, homebuilders, the League of Municipalities, nonprofit housing development corporations, residents of low-income housing, and the real estate lending industry.

See Housing Trust Fund for more information.

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