TO: Mayor and Members of City Council
THRU: Jodi Phelps, Assistant City Manager
FROM: Christopher Cauley, MPA, CEcD, Economic and Community Development Director
DATE: May 26, 2026
RE:Title
Adopt Resolution to Convey Real Property and Issue Loans for the Affordable Single-Family Housing Development Program
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COUNCIL DISTRICT(S):
Council District(s)
District 2
b
Relationship To Strategic Plan:
GOAL II: The City of Fayetteville will have a Responsive City Government supporting a diverse and viable economy.
Objective 2.2: To invest in community places to ensure revitalization and increase quality of life
GOAL III: The City of Fayetteville will be a city invested in Today and Tomorrow.
Objective 3.2: To manage the City's future growth and strategic land use
Strategic Priority 3: Continue the City's commitment to revitalization efforts and housing needs.
GOAL IV: The City of Fayetteville will be a desirable place to live, work and recreate.
Objective 4.5: To ensure a place for people to live in great neighborhoods
Objective 4.6: To reduce poverty and homelessness
Executive Summary:
City Council is asked to adopt a resolution authorizing the conveyance of sixteen City-owned residential lots and the issuance of related HOME Investment Partnerships Program construction loans under the City’s Affordable Single-Family Housing Development Program.
Background:
The City has evaluated opportunities to use suitable City-owned vacant residential lots to support affordable housing development and neighborhood reinvestment. As part of this review, staff determined that many of the available parcels appropriate for housing development were small-scale residential lots best suited for single-family infill housing.
In December 2024, the City issued a Request for Proposals for the Affordable Single-Family Housing Development Program. The program is designed to expand affordable homeownership opportunities by providing development incentives to qualified for-profit and nonprofit organizations. The program is funded through the HOME Investment Partnerships Program and is intended to support the development of infill housing serving families earning at or below 80 percent of the Area Median Income.
In June 2025, the City issued a related Request for Proposals for Community Housing Development Organizations to develop affordable for-sale housing in accordance with HOME Program requirements.
Following review of the proposals, staff selected developers for sixteen City-owned residential lots. Eight lots are proposed for development through the general Affordable Single-Family Housing Development Program track, and eight lots are proposed for development through the Community Housing Development Organization track. The combined appraised value of the sixteen lots is $206,500.
The City’s outside legal counsel, working with the City Attorney’s Office, prepared the proposed legal structure, including the property transfer and loan agreement and related documents. The proposed resolution will authorize the City to convey the properties and issue the related HOME construction loans necessary to proceed with the awarded projects.
Issues/Analysis:
The proposed action allows the City to move from developer selection to implementation. Without Council authorization, the City cannot complete the property conveyances or execute the related loan documents needed for developers to close on the lots and begin construction.
The program structure is intended to protect the City’s interest while supporting affordable homeownership. The City will convey the lots for the purpose of constructing affordable single-family homes and will provide construction financing through HOME funds. The construction loans will be secured through the applicable loan documents, which will include restrictions ensuring the improved properties are sold to qualifying households. Upon completion, the homes must be sold to eligible buyers in accordance with HOME Program requirements and the City’s program guidelines.
The development timelines, construction requirements, sale requirements, affordability period, and compliance obligations are governed by the RFP, program guidelines, HOME requirements, and the property transfer and loan documents. Developers are required to proceed within the timelines established by the program, including requirements to begin construction, complete construction, and sell the homes to eligible buyers.
The conveyance of the properties is not a stand-alone land disposition. The property transfer is part of a coordinated affordable housing transaction that includes the conveyance of City-owned lots, HOME-funded construction financing, affordability restrictions, and buyer eligibility requirements. The structure accounts for the value of the land and ensures that the properties are used for affordable housing purposes.
The conveyance process will proceed in accordance with N.C.G.S. 160D-1316 and N.C.G.S. 160A-267. Following Council adoption of the resolution, the City will publish notice summarizing the contents of the resolution and will not consummate any property sale until the required 10-day period has elapsed.
Budget Impact:
The proposed action authorizes the conveyance of sixteen City-owned residential lots with a total appraised value of $206,500.
The action also authorizes HOME-funded construction loans of up to $50,000 per lot, for a total potential loan authorization of up to $800,000. These funds are available through the City’s HOME Investment Partnerships Program and are restricted to eligible affordable housing activities.
There is no additional General Fund impact associated with this action.
Options:
• Adopt the resolution authorizing conveyance of the identified City-owned lots and issuance of related HOME construction loans under the Affordable Single-Family Housing Development Program.
• Do not adopt the resolution.
• Provide other direction to staff.
Recommended Action::Recommended Action
Staff recommends that City Council adopt the resolution authorizing the conveyance of sixteen City-owned residential lots and the issuance of related HOME construction loans under the Affordable Single-Family Housing Development Program.
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Attachments:
Resolution Authorizing Conveyance of Real Property and Issuance of Loans
Exhibit A: List of City Owned Properties For Conveyance
Affordable Single-Family Housing Development Program Guidelines
Memo for Single Family Development 5.26