Summary of SB 789 (Session 2025) – Homes for Heroes (North Carolina)
Date filed: April 21, 2026
Intent and overall purpose
- Create a targeted assistance program to help first-time homebuyers who are public servants in North Carolina.
- Provide an income tax credit for volunteer rescue workers for unreimbursed business expenses related to their rescue work.
- The bill consists of three Parts: a homebuyers’ assistance program, an income tax credit for volunteer workers, and general implementation/operational provisions.
Part I — Homes Buyers’ Assistance Program
1) Definitions (Section 1(a))
- First-time homebuyer: An individual purchasing a property, planning to occupy it as their principal residence, with no prior ownership interest in a residential property in the prior three years.
- Public servant: An active duty member or veteran, or a law enforcement officer, teacher, firefighter, or EMS personnel employed in North Carolina.
- Other related roles: Active duty member, emergency medical services personnel, firefighter, law enforcement officer, teacher, veteran, and the specific definitions used for these roles.
2) Program structure and funding (Section 1(b))
- The North Carolina Housing Finance Agency (the Agency) would administer a Homeownership Assistance Fund program under existing authority (G.S. 122A-5.7).
- Benefits available to qualifying first-time homebuyers employed full-time as public servants in NC.
- Financial assistance types:
- Down payment assistance
- Mortgage insurance premium assistance
- Closing costs
- Financial cap for assistance:
- The total assistance cannot exceed the lesser of:
- $25,000, or
- 10% of the purchase price
- Payment form: Assistance may be provided as a reimbursement or direct payment.
- Duration for mortgage insurance: Mortgage insurance payment assistance may be provided monthly for up to 60 months (i.e., 5 years) for any single qualifying homebuyer.
3) Rules and regulations (Section 1(c))
- The Agency may adopt, modify, or repeal rules governing the down payment and mortgage insurance assistance.
4) Funding/appropriations (Section 1(d))
- A new appropriation of $200,000,000 in recurring funds from the General Fund to the Homeownership Assistance Fund for the 2026-2027 fiscal year to support the program.
5) Effective date (Section 1(e))
- Part I becomes effective July 1, 2026.
Part II — Income Tax Credit for Volunteer Rescue Workers
1) Credit provision (Section 2(a))
- Adds a new tax credit section (G.S. 105-153.12) for eligible volunteer rescue workers.
- Credit amount: Equal to the taxpayer’s ordinary, reasonable unreimbursed business expenses related to rescue work.
- Eligible recipients: Eligible firefighter or eligible rescue squad worker (as defined below) who incurred unreimbursed rescue-related expenses.
2) Limitations (Section 2(b))
- The credit cannot exceed the lesser of:
- $5,000, or
- The taxpayer’s tax liability for the year (after other credits except for payments made on behalf of the taxpayer).
- A taxpayer cannot claim the credit as both an eligible firefighter and an eligible rescue squad worker in the same year.
3) Definitions (Section 2(c))
- Eligible firefighter: An unpaid member of a volunteer fire department who attended at least 36 hours of drills/meetings during the tax year.
- Eligible rescue squad worker: An unpaid member of a volunteer rescue or EMS squad who attended at least 36 hours of training/meetings during the tax year.
- Rescue work: Firefighting and rescue or emergency medical services activities.
4) Effective date (Section 2(d))
- The tax credit applies to taxable years beginning on or after January 1, 2026.
Part III — Effective Date
- General effective date language: Except as otherwise provided, the act becomes law upon passage.
Sponsors
- Primary sponsor: Senator Bradley
- Co-sponsors: Senator Joyce Waddell, Senator Woodson Bradley
Potential impact and who is affected
- Public servants who are first-time homebuyers (including educators, firefighters, law enforcement officers, EMS personnel, and veterans) could access up to $25,000 (or 10% of purchase price, whichever is smaller) in down payment/closing cost assistance, plus up to 60 months of mortgage insurance premium assistance. This could facilitate home purchases for qualifying households and stimulate homeownership among essential public sector workers.
- The North Carolina Housing Finance Agency would administer the Homeownership Assistance Fund under existing statutory authority, with a substantial $200 million recurring appropriation for the 2026-2027 fiscal year.
- Volunteer firefighters and rescue squad workers could receive a tax credit for unreimbursed business expenses related to their rescue activities, up to $5,000 or their tax liability, whichever is smaller. The credit is capped to prevent double claiming across roles and applies to taxable years beginning in 2026 or later.
- The bill may affect state budget planning due to the significant funding authorization and potential impacts on state tax revenues.
Timeline and procedural notes
- Part I funding becomes available July 1, 2026, with eligibility and administrative rules to be established by the Housing Finance Agency.
- Part II tax credit is effective for taxable years beginning on or after January 1, 2026.
- The act is currently in the legislative process (as of April 2026) with referrals and first readings completed; the next steps would involve committee consideration and potential floor votes.
Overall, SB 789 aims to broaden homeownership opportunities for NC public servants and to support volunteer rescue workers through targeted financial assistance and tax relief.
