Properties receiving federal and state financing must meet certain criteria to continue receiving benefits. The North Carolina Housing Finance Agency works with owners and managers to make sure that properties meet program regulations.
Low-Income Housing Tax Credits
We monitor developments that have received federal Housing Credits for compliance with Section 42 of the Internal Revenue Code. Monitoring of the following regulations occurs periodically to ensure that units provide safe, decent and affordable housing and that eligible renters occupy the units.
- 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 QAP for the year a development’s Housing Credits were allocated.
From 2000–2014, North Carolina offered state housing credits in addition to federal credits. For some developments, these state statutes required lower income targeting, resulting in additional rent restriction and occupancy standards. The rules for rent and occupancy depend on two factors—year of tax credit award and county in which the project is located.
Rental Production Program (RPP)
Used alongside tax credits, RPP loans provide gap financing to make rental housing more affordable. We provide permanent long-term financing for rental projects that serve families earning 60% or less of the area median income through RPP loans.
The Advanced Compliance Workshop Training Manual provides guidance on operating a property with an RPP loan. For example, all rent increases and reserve withdrawals must be approved in writing by the NC Housing Finance Agency. The manual provides owners and management with written procedures for these processes. Additionally, owners and managers must comply with all requirements established in Agency loan documents.
HOME Investment Partnership Program
The NC Housing Finance Agency receives annual appropriations of HOME funds from the US Department of Housing and Urban Development (HUD.) Some of these funds provide loans for the development of affordable rental housing. We monitor properties that receive these HOME loans for compliance with the following HUD regulations.
- If Housing Credit properties also receive HOME funds, at least 40% of the units in each building must be occupied by households earning 50% or less of the area median gross income.
- Rents must comply with the low HOME rents.
- Designated units must be floating.
- Properties must meet additional reserve account requirements and withdrawal procedures.
- The NC Housing Finance Agency must approve all rent increases in writing.
- Properties must submit annual finance audits performed by a CPA.
Housing Trust Fund Loans
The Housing Trust Fund receives periodic appropriations from the North Carolina General Assembly to finance affordable housing. Normally, these loans are granted in combination with federal Housing Credits. We administer the Housing Trust Fund and monitor properties receiving money from it for compliance with the following state regulations.
- Properties must meet additional reserve account requirements and withdrawal procedures.
- The NC Housing Finance Agency must approve all rent increases in writing.
- Properties must submit annual financing audits performed by a CPA.
Performance Based Contract Administration
The Agency serves as a performance-based contract administrator for the US Department of Housing and Urban Development on a portfolio of 574 contracts (as of June 28, 2018) located throughout North Carolina. Day-to-day functions of performance-based contract administration for Section 8 Housing Assistance Payment (HAP) has been contracted to the North Carolina Quadel Consulting Corporation (NCQ).
Agency-Issued Tax-Exempt Bonds
The NC Housing Finance Agency monitors projects financed through a variety of agency-issued bonds to ensure that units provide safe, decent and affordable housing and are occupied by eligible households, based on income. We monitor these units to protect the tax-exempt status of the bonds.
- Private Activity Bonds.
- 501(c) Bonds.
- Unsubsidized “80/20” Program.
Supportive Housing Development Program
The NC Housing Finance Agency monitors the provision of interest-free loans to government and nonprofit organizations for the production of transitional and permanent housing for occupants with special needs. These loans, funded through the state Housing Trust Fund, serve homeless or non-homeless households that require supportive services, including:
- Residents with mental, physical or developmental disabilities.
- Residents with substance use disorders.
- Residents diagnosed with AIDS and related diseases.
- Others with special needs, on a case-by-case basis.
Tenant-Based Rental Assistance (TBRA)
TBRA has been available after certain designated natural disasters. No new sources of TBRA are currently available.
