A BILL TO BE ENTITLED
AN ACT to increase homeownership in north carolina by developing a public education campaign regarding homeownership programs and the benefits of homeownership, to provide better home buyer preparation and consumer credit counseling, to create regional coalitions to identify and reduce barriers to homeownership, and to appropriate funds to establish thOSE programs.
The General Assembly of North Carolina enacts:
PART I. CREATION OF THE EQUITY PLUS HOMEOWNERSHIP PROGRAM.
SECTION 1.1.(a)  There is appropriated from the General Fund to the Rural Economic Development Center, Inc., (Center) the sum of nine million dollars ($9,000,000) for the 2007‑2008 fiscal year and the sum of nine million dollars ($9,000,000) for the 2008‑2009 fiscal year. These funds shall be used to establish the Equity Plus Homeownership Program as provided in this act. The purpose of the Equity Plus Homeownership Program is to increase the number of North Carolinians who are able to purchase and retain equity‑building homes through public education, homebuyer preparation, consumer counseling, and Equity Plus mortgage products.
As used in this section, the following definitions apply:
(1)	"Equity‑building home" means a residential structure that will be the purchaser's primary residence and that met the State and local building code standards in place at the time of construction, or if there were no building codes in effect at the time of construction, that was constructed on‑site. An equity‑building home will also have characteristics that are likely to cause it to appreciate in value over time.
(2)	"Equity Plus mortgage product" means a loan that is offered at an interest rate that is at or near the lowest available market rate and that contains foreclosure prevention provisions such as payment deferrals in the event of delinquencies due to certain economic circumstances. It must also include additional characteristics intended to assist the target population in obtaining home financing and including at least one of the following:  flexible underwriting standards or flexible down payment requirements.
SECTION 1.1.(b)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of five million dollars ($5,000,000) in fiscal year 2007‑2008 and the sum of five million dollars ($5,000,000) in fiscal year 2008‑2009 shall be used to create, support, and assist programs and products that increase ownership of equity‑building homes.  The Center shall use these funds to:
(1)	Establish a central inventory and description of all homeownership programs and financing resources that are available in North Carolina, whether offered through private or public entities, and that shall be accessible to the public by a toll‑free phone service as well as electronic means;
(2)	Develop and implement an aggressive public information and education campaign using TV, radio, newspaper, billboards, and direct mail in order to publicize the economic benefits of purchasing an equity‑building home and the resources that are available to assist citizens with making that purchase;
(3)	Coordinate with and support local, State, federal, private, public, and nonprofit organizations (such as the Habitat for Humanity Foundation and other self‑help housing organizations) that increase homeownership in equity‑building homes and protect housing consumers;
(4)	Collaborate with local governments to help remove barriers to the development of affordable, equity‑building housing;
(5)	Partner with the North Carolina Department of Commerce and public and private employers to foster workforce housing to attract and retain employees and as an economic development tool; and
(6)	Identify and solicit additional funding from charitable and federal sources that can be used to increase equity‑building homeownership rates in North Carolina.
SECTION 1.1.(c)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of three million dollars ($3,000,000) in fiscal year 2007‑2008 and the sum of three million dollars ($3,000,000) in fiscal year 2008‑2009 shall be used to allocate grants to nonprofit corporations and local governments to make certified homebuyer credit counselors available to potential Equity Plus homebuyers in every region of the State.   The positions shall be used primarily to provide financial literacy, credit counseling, homeownership preparation, and foreclosure prevention and intervention services to increase homeownership of equity‑building properties.  The Center shall establish performance‑based criteria for grant recipients that include tracking inputs and outcomes of the counseling, education, buyer preparation, and foreclosure prevention programs.  The Center shall also collect and evaluate data received from grant recipients to determine the number of equity‑building homes that are purchased using Equity Plus mortgage products as a result of the Equity Plus Homeownership Program.
SECTION 1.1.(d)  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million dollars ($1,000,000) in fiscal year 2007‑2008 and the sum of one million dollars ($1,000,000) in fiscal year 2008‑2009 shall be used to develop a mechanism for identifying equity‑building homes and to provide grants to regional coalitions to increase ownership of equity‑building homes.
(1)	The Center shall collaborate with representatives from the building trades, financial institutions, appraisers, developers, local governments, realtors, and architects in order to establish a set of criteria that may be used to evaluate various features of residential buildings. The criteria are intended to examine the quality of construction of a home by taking into consideration features such as durability and quality of building materials, future expandability and adaptability, energy efficiency, and esthetic appeal. The criteria are also intended to examine the quality of the location of a home by taking into consideration its proximity to services, amenities, employment centers, and transportation options. Using the criteria established under this subdivision, the Center shall also develop a mechanism that may be utilized by consumers, builders, or realtors to evaluate the equity building potential of individual properties. Funds allocated under this subsection may be used to pay for the creation and distribution of the mechanism and to pay for third‑party evaluations of individual properties. The Center shall implement this subdivision by no later than January 1, 2008.
(2)	The Center shall make grants to local governments to organize and operate Regional Equity Plus Coalitions in every region of the State. These coalitions shall have representatives from financial institutions, homebuilders, realtors, architects, housing counselor grantees, community‑based nonprofit organizations, and local governments. The coalitions shall be responsible for preparing and carrying out local and regional campaigns to increase homeownership by marketing Equity Plus mortgages, Equity Plus homes, and connecting potential homebuyers to these products.
SECTION 1.1.(e)  There is established the Equity Plus Advisory Committee to collaborate with the Center on the implementation of the Equity Plus Homeownership Program. The Advisory Committee shall include representatives from the Department of State Treasurer, the North Carolina Department of Commerce, the North Carolina Housing Finance Agency, the North Carolina Housing Coalition, the North Carolina Association of Housing Counselors, the State Employees' Credit Union, the North Carolina Credit Union League, the North Carolina Bankers' Association, the North Carolina Association of Mortgage Professionals, the Mortgage Bankers Association of the Carolinas, the North Carolina Community College System, the Agricultural Extension Service, the North Carolina Home Builders Association, the North Carolina Association of Realtors ©, the North Carolina League of Municipalities, and  the North Carolina Association of County Commissioners. The President of the Rural Economic Development Center, Inc., shall serve as an ex officio member of the Advisory Committee. The Center shall arrange for the Advisory Committee to meet at least four times a year.
SECTION 1.1.(f)  Of the funds appropriated in this act from the General Fund to the Rural Economic Development Center, Inc., the Center may use up to three percent (3%) for the 2007‑2008 fiscal year and the 2008‑2009 fiscal year to cover expenses in administering this act.
SECTION 1.1.(g)  The Rural Economic Development Center, Inc., shall:
(1)	By January 15, 2008, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 2007‑2008 planned activities, objectives, and accomplishments including actual results through December 31, 2007; and
b.	State fiscal year 2007‑2008 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2007.
(2)	Develop a plan to add a total of 42,000 additional equity‑building homeowners in North Carolina by July 1, 2010, and to establish goals for continuing to substantially increase homeownership in equity‑building homes through 2018. The plan shall be included as a component of the North Carolina Consolidated Plan for 2005‑2010, and shall include a budget for its implementation. The Center shall submit its plan to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division no later than January 15, 2005.
(3)	Provide to the Fiscal Research Division a copy of each grant recipient's annual audited financial statement within 30 days of issuance of the statement.
PART II. CREATE 6,000 EQUITY PLUS MORTGAGES.
NORTH CAROLINA HOUSING FINANCE AGENCY
SECTION 2.1.  There is appropriated from the General Fund to the North Carolina Housing Finance Agency the sum of seven million dollars ($7,000,000) for the 2007‑2008 fiscal year and the sum of seven million dollars ($7,000,000) for the 2008‑2009 fiscal year. These funds shall be used to create a loan loss reserve to offset expenses that may occur from defaults or delinquencies on mortgages purchased by the Agency in furtherance of the Equity Plus Homeownership Program, and to provide other assistance to home buyers under the Equity Plus Homeownership Program.  Loans purchased by the Agency under this section shall meet the Agency's criteria regarding sales price limits.
PRIVATE LENDERS
SECTION 2.2.  The Rural Economic Development Center, Inc., shall collaborate with the State Employees' Credit Union, the North Carolina Credit Union League, and the North Carolina Bankers Association to develop new and identify existing Equity Plus mortgage products, as defined in subsection 1.1(a) of this act, that are or will be offered by member institutions and that will increase the number of public employees and other North Carolinians purchasing equity‑building homes.
PART III. INCREASE MORTGAGE MARKET LIQUIDITY.
SECTION 3.1.  The State Treasurer shall work with the entities listed in G.S. 147‑69.1(c)(2) to develop a North Carolina specific mortgage portfolio in which the Treasurer may invest funds under G.S. 147‑69.1(c)(2).  The State Treasurer shall attempt to invest at least one hundred million dollars ($100,000,000) in this mortgage portfolio in order to assist with mortgage financing liquidity in this State.
SECTION 3.2.  G.S. 147‑69.1(c)(2) reads as rewritten:
"(c)	It shall be the duty of the State Treasurer to invest the cash of the funds enumerated in subsection (b) of this section in excess of the amount required to meet the current needs and demands on such funds, selecting from among the following:
…
(2)	Obligations of the Federal Financing Bank, the Federal Farm Credit Bank, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, Fannie Mae, the Government National Mortgage Association, the Federal Housing Administration, the Farmers Home Administration, the United States Postal Service, the Export‑Import Bank, the International Bank for Reconstruction and Development, the International Finance Corporation, the Inter‑American Development Bank, the Asian Development Bank, the African Development Bank, and the Student Loan Marketing Association. The Treasurer may consider indirect economic benefits to the citizens of the State when selecting particular investments under this subsection."
PART IV. EFFECTIVE DATES.
SECTION 4.1.  This act becomes effective July 1, 2007.