Program Compliance Highlights
Properties that receive federal and/or state financing or assistance must meet certain criteria to continue receiving benefits. The North Carolina Housing Finance Agency works with owners and managers to ensure that federally and state-funded housing is safe and affordable, and that tenants are eligible for residency, based on their incomes and other program requirements.
The links below will take you to descriptions of the programs we oversee and requirements for each.
Low-Income Housing Tax Credits
Rental Production Program
HOME Investments Partnership (HOME) Program
Housing Trust Fund Loans
Other loans
The North Carolina Housing Finance Agency periodically receives other funding from federal and state sources for specific purposes, such as disaster relief. The Agency monitors properties receiving this funding for compliance with the appropriate regulations.
Section 8
Agency-Issued Tax-Exempt Bonds
Affordable Housing Program
Supportive Housing Development Program
Tenant-Based Rental Assistance
Low-Income Housing Tax Credits
The North Carolina Housing Finance Agency monitors developments that have received federal Housing Credits and the State Housing Credit for compliance with Section 42 of the Internal Revenue Code (the Code). Monitoring occurs periodically to ensure that units provide safe, decent, affordable housing, and that eligible renters occupy the units.
Major compliance issues for federal and state credits:
- Units must be affordable to, and occupied by, households at 60% or less of area median income. Lower income targeting may apply to specific properties, based on individual funding agreements.
- Unit activity must be reported regularly using the Rental Compliance Reporting System (RCRS).
- Annual “Owner's Certification of Continuing Program Compliance” is required.
- Households made up entirely of full-time students may not qualify.
- Mixed income properties require special tracking to comply with the 140% rule, next available unit rule, and the vacant unit rule.
- Additional requirements may apply, based on the state Qualified Allocation Plan for the year a development’s housing credits were allocated.
Additional state compliance
Beginning in 2000, North Carolina offered a State Housing Credit in addition to the federal Housing Credit. Almost all of the state tax credit compliance rules, such as fair housing, are identical to those for the federal Housing Credit.
However, for some developments, the state statute requires lower income targeting, which results in additional rent restriction and occupancy standards. The rules for rent and occupancy depend on two factors:
- year of tax credit award
- county in which the project is located.
You can access a list of required State Housing Credit set-asides based on county and allocation year.
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Rental Production Program
Rental Production Program (RPP) loans, used in conjunction with tax credits, provide gap financing to make rental housing more affordable. Through RPP loans, the Agency provides permanent long-term financing for rental projects that serve families who earn 60% or less of the area median income.
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HOME Investment Partnership (HOME) Program
The North Carolina Housing Finance Agency receives an annual appropriation of HOME funds from the U.S. Department of Housing and Urban Development (HUD). Some of these funds are used to provide loans for the development of affordable rental housing. The Agency monitors properties receiving Agency-issued HOME loans for compliance with HOME regulations as established by HUD.
- If Housing Credit properties also receive HOME funds, at least 40% of units in each building must be occupied by households 50% or less of area median gross income.
- Rents must comply with the low and high HOME rent rules.
- Designated HOME units may be fixed or floating.
- HOME-financed properties must meet additional reserve account requirements and withdrawal procedures.
- The North Carolina Housing Finance Agency must approve all rent increases in writing.
- Properties must submit annual financial audits performed by a CPA.
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Housing Trust Fund Loans
The Housing Trust Fund receives periodic appropriations from the North Carolina General Assembly to finance affordable housing. Normally, Housing Trust Fund loans are granted in combination with federal Housing Credits. The Agency administers the Housing Trust Fund and monitors properties receiving money from it for compliance with state regulations.
- Properties receiving Housing Trust Fund loans must meet additional reserve account requirements and withdrawal procedures.
- The North Carolina Housing Finance Agency must approve all rent increases in writing.
- Properties must submit annual financial audits performed by a CPA.
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Section 8
Non-Performance-Based Section 8 Portfolio
The North Carolina Housing Finance Agency serves as Non-Performance-Based Contract Administrator for U.S. Department of Housing and Urban Development (HUD) on a portfolio of properties with project-based Section 8 rental assistance. The Agency has direct responsibility for the day-to-day asset management requirements.
Performance-Based Contract Administration
The North Carolina Housing Finance Agency serves as the Performance-Based Contract Administrator for the state of North Carolina for certain project-based Section 8 Housing Assistance Payment (HAP) Contracts. The Agency has contracted the day-to-day functions of this responsibility to North Carolina Quadel Consulting Corporation (NCQ). HUD retains responsibility for asset management.
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Agency-Issued Tax-Exempt Bonds
The North Carolina Housing Finance Agency monitors projects financed with the following types of agency-issued bonds:
Private activity bonds
Monitoring ensures that units financed with private activity bonds provide safe, decent, and affordable housing and that the units are occupied by eligible households.
501(c) bonds
Monitoring of units financed with 501(c) bonds ensures that units provide safe and decent housing and that the units are occupied by eligible households, based on income. The North Carolina Housing Finance Agency monitors these units to protect the tax-exempt status of the bonds.
Unsubsidized “80/20” Program
Monitoring for the unsubsidized “80/20” program ensures compliance with North Carolina Housing Finance Agency rules, Deed Restrictions, and the IRS Code. The Agency monitors these units to protect the tax-exempt status of the bonds.
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Affordable Housing Program (AHP)
The North Carolina Housing Finance Agency is responsible for monitoring Land Use Restriction Agreements (LURA) regulations of the AHP for the Federal Deposit Insurance Corp. (FDIC). These properties were purchased at below-fair-market value with the restriction that the units be made available to low- and very-low-income households.
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Supportive Housing Development Program
The North Carolina Housing Finance Agency is responsible for monitoring the Supportive Housing Development Program for compliance with state and federal regulations.
The Supportive Housing Development Program provides interest-free loans to government and non-profit organizations for the production of transitional and permanent housing for persons with special needs. The loans are funded through the state Housing Trust Fund. Eligible populations to be served include homeless or non-homeless households that require supportive services including: persons with mental, physical, or developmental disabilities; persons with substance use disorders; persons diagnosed with AIDS and related diseases; and others with special needs on a case-by-case basis.
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Tenant-Based Rental Assistance (TBRA)
Tenant-based rental assistance has been available after certain designated natural disasters. No new sources of TBRA are currently available.
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