North Carolina HB 1211: Home Equity Investment Loan Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1211

Short Title: Home Equity Investment Loan Act. (Public)
Sponsors: Representatives Longest and Liu (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
May 5, 2026
*H1211-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REGULATE HOME EQUITY INVESTMENT LOANS AS RESIDENTIAL 2
MORTGAGE LOANS, TO IMPOSE CERTAIN CONSUMER PROTECTIONS ON 3
THOSE LOANS, TO PROHIBIT CERTAIN MANDATORY ARBITRATION TERMS IN 4
COVERED MORTGAGE TRANSACTIONS, TO MAKE VIOLATIONS UNFAIR OR 5
DECEPTIVE ACTS OR PRACTICES, AND TO AUTHORIZE FEES TO IMPLEMENT 6
THIS ACT. 7
The General Assembly of North Carolina enacts: 8
SECTION 1. Chapter 53 of the General Statutes is amended by adding a new Article 9
to read: 10
"Article 21A. 11
"Home Equity Investment Loans. 12
"§ 53-274.1. Title. 13
This Article shall be known and may be cited as the "Home Equity Investment Loan Act." 14
"§ 53-274.2. Definitions. 15
The following definitions apply in this Article: 16
(1) Commissioner. – The Commissioner of Banks of this State. 17
(2) Company. – Any person that makes, brokers, purchases, or services a home 18
equity investment loan. 19
(3) Dwelling. – As defined in G.S. 53-244.030(9). 20
(4) Home equity investment loan or loan. – A transaction or arrangement, 21
including an option contract, futures contract, derivative, shared appreciation 22
agreement, shared value agreement, home equity sharing agreement, home 23
equity investment, equity investment option, or similar agreement, however 24
denominated, under which funds are advanced to or on behalf of a homeowner 25
and a person obtains a right to receive from or on behalf of the homeowner, 26
or from the proceeds of the dwelling or residential real estate, an amount 27
determined in whole or in part by reference to the value, equity, appreciation, 28
sale proceeds, or future value of a dwelling or of residential real estate upon 29
which a dwelling is constructed or intended to be constructed. The term 30
includes any transaction or arrangement described in this subdivision that is 31
secured by a mortgage, deed of trust, or other equivalent consensual security 32
interest in a dwelling located in this State or in residential real estate upon 33
which there is constructed or intended to be constructed a dwelling, and any 34
transaction or arrangement structured to evade the application of this Article. 35

General Assembly Of North Carolina Session 2025
Page 2 House Bill 1211-First Edition
The term does not include a transaction or arrangement made, insured, 1
guaranteed, or administered by a federal, State, or local government agency, 2
a government-sponsored enterprise, or an agency or enterprise of a political 3
subdivision of this State. 4
(5) Homeowner. – A natural person who receives funds under a home equity 5
investment loan and who, at the time of application or closing, owns and 6
occupies, or intends to occupy, the dwelling securing the loan as the person's 7
principal dwelling. 8
(6) Residential real estate. – As defined in G.S. 53-244.030(31). 9
"§ 53-274.3. Applicability; construction. 10
(a) A home equity investment loan is a residential mortgage loan for purposes of this 11
Chapter and Chapters 24 and 45 of the General Statutes and is subject to all otherwise applicable 12
State residential mortgage laws, including licensing, collection, foreclosure, and usury laws. 13
(b) A home equity investment loan shall not be treated as a reverse mortgage transaction 14
for purposes of any exclusion, exception, or limitation under Chapter 24 or Chapter 45 of the 15
General Statutes unless the transaction independently satisfies Article 21 of this Chapter. 16
(c) Regardless of how a transaction is denominated, labeled, or structured, including as 17
an investment, option, sale of future appreciation, sale of an interest in equity, shared appreciation 18
agreement, shared value agreement, or similar arrangement, any transaction that in substance 19
meets the definition of a home equity investment loan under G.S. 53-274.2 is governed by this 20
Article. 21
"§ 53-274.4. Licensing; home equity investment loan authorization and fees; purchasers 22
and assignees. 23
(a) No person shall make, broker, or service a home equity investment loan with respect 24
to a dwelling located in this State unless the person is authorized to engage in the mortgage 25
business under Article 19B of this Chapter. 26
(b) A person authorized to engage in the mortgage business under Article 19B of this 27
Chapter shall not make a home equity investment loan on or after October 1, 2026, unless the 28
person is authorized by the Commissioner to make home equity investment loans under this 29
subsection. The Commissioner may accept applications and fees under this subsection before 30
October 1, 2026. An application for authorization shall be in writing, in the form