Establishes the "New York student loan assistance and home purchase act", for the purposes of facilitating the purchase of homes by individuals who are burdened by student debt, by providing financing opportunities for the consolidation of student debt into a mortgage.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4336
SPONSOR: Tapia TITLE OF BILL:
An act to amend the public authorities law, in relation to establishing
the "New York student loan assistance and home purchase act"
PURPOSE OR GENERAL IDEA OF BILL::
to amend the public authorities law, in relation to establishing the
"New York student loan assistance and home purchase act
SUMMARY OF PROVISIONS::
A new section 4 2405-g is added to the public authorities statute, and
it now reads as follows: Student loan assistance and home purchase
program, section 2405-g. Definitions, first The following terms shall
have the following definitions for the purposes of this section: 8(a)
"Program" refers to the house purchase and student loan assistance
program created in accordance with this section's subdivision two.
10(b)"Student loan" refers to any loan made to a borrower for the
purpose of paying for post-secondary education or expenses associated
with post-secondary education. The term "student loan" shall not be
restricted to loans as that term is defined in subdivision ten of
section twenty-four hundred two of this part for the purposes of this
section. The agency must create a "student loan aid and home purchase
program," which the agency will oversee, in order to make it easier for
people to purchase homes who are struggling with academic debt by offer-
ing financial options in accordance with this section's third subdivi-
sion. A director of the program will be appointed by the agency's chair
to oversee the program's implementation.23(a)The program will help
people who apply and are accepted into it in accordance with this subdi-
vision's paragraph(b) by consolidating all or a portion of their student
loans into mortgages. To carry out the terms of this section, the
program shall be permitted to purchase from banks new mortgages, exist-
ing mortgages, and student loans as necessary. Unless specifically stat-
ed otherwise by state or federal law, there is no cap on the amount of
student loan debt that may be included in a new mortgage or an existing
mortgage under this section. 4(b)The program shall develop an applica-
tion procedure via which potential homeowners who are state residents
and have student debt may apply to have their student debt consolidated
with a new mortgage or an existing mortgage. The program will not take
the applicant's first-home status, the home's cleanliness, or the appli-
cant's foreclosure history into account when deciding whether to accept
them into the program. 10(c)Those who are admitted into the program in
accordance with this section are obliged to continue living in the
bought house as their primary residence for a minimum of five years
after the closing. The housing and community renewal commissioner will
establish the fines and costs that will be charged for transgressions of
this section. 13(d)The program must abide by all relevant federal regu-
lations and laws. 17(e). Laws and guidelines. Any rules and regulations
required for the creation and execution of the program under this
section must be promulgated by-the commissioner of housing and community
revitalization. In addition, the commissioner of housing and community
renewal must issue rules and regulations establishing: 22(a)eligibility
standards for program acceptance; 23 (b) interest rates and other fees,
penalties, and charges in an amount required to carry out the program.
JUSTIFICATION::
Instead of fulfilling education's promise to be the "great equalizer,"
our higher education system rather widens the racial wealth disparity by
necessitating substantial borrowing. Moreover, the cycle that results in
elevated degree of student loan debt distress is driven by the same
systemic racial injustices that are responsible for our country's racial
wealth, school quality, and income gaps. People of color in New York
State and the rest of the nation will continue to struggle with debt
repayment if structural racial inequities are not addressed. Student
loan debt is a problem for everyone, not just young people and people
with higher earnings; it affects people of all ages and income levels.
More than 25% of those in poverty in New York State reported having
school debt, either themselves or a family member. Like the percentage
of New Yorkers between the ages of 25 and 34, more than one-third of
older adults (aged 45 to 54) reported having student loan debt In their
home. People of color are substantially more likely to have student loan
debt, particularly Black and Latina/x women. In New York State 38
percent of Latina/x and 43 percent Black women reported having college
debt, and a third of Black men reported being burdened with student loan
debt.
Low-income borrowers, New Yorkers of color, and those without a four-
year degree are more likely to encounter difficulties paying off student
debt, including wage garnishment, and to suffer from heightened economic
hardship as a result of their debt loads. More than a third of low-in-
come New Yorkers with student debt and 31% of those without a college
degree reported that they or a family member had defaulted on or had
delinquent loans. Households of all ages, economic levels, and
racial/ethnic backgrounds are being impacted by higher education debt.
However, households with members who did not finish college, those who
made less money, those who were Black or Latino/a/x, and those who were
lower income, are bearing the heaviest pressures related to student
debt. This will result in higher default rates for borrowers who a
majority are part of underserved communities which will continue to
contribute over time to the racial wealth, housing, education, and wage
gaps. These borrowers may see student loans as an essential step toward
a higher education and financial security, but the difficulties they
confront as a result of their debt amplify the current wealth disparity
and encourage generational poverty. Black and Brown students a re more
likely to accumulate debt and fail on their loans, and higher student
loan payments have been linked to lower homeownership rates.
Home equity makes up a higher portion of a household's net worth for
Black and Hispanic households than it does for White households that own
their homes, according to research from the Federal Reserve Board of New
York. When trying to purchase a property in the United States, minority
households encounter numerous obstacles. The mortgage refusal rate for
Black and Latino/a/x applicants is still twice as high as it Is for the
general population, reflecting decades of unjust regulations. According
to the National Association of Realtors, White households are 40% more
likely to be able to afford to buy a home than households of color, and
government statistics show that in the second quarter of 2022, the
homeownership rate for White households was 75%, compared to 45% for
Black households. In 2021, homeownership rates were 67 percent for White
households, 52 percent for Asian households, 34 percent for Black house-
holds, and 29 percent for Hispanic households in New York. With Hispan-
ic homeownership rates significantly below the national average, the
homeownership gap is highest for Hispanics in New York, and 16 percent-
age points greater than the national Hispanic homeownership gap relative
to White households. The issue of homeownership is one of wealth and has
significant effects on our entire economy. People frequently believe
that the racial homeownership gap is an issue of income inequality,
however this is not the case, the subject of this story goes beyond
money. It truly has to do with access to financial services, particular-
ly credit, and wealth transfers across generations. Even after the land-
mark Fair Housing Act of 1968, the racial homeownership gap persists,
with homeownership rates for households of color more than 24 percentage
points lower than the rate among white households. This bill is a way to
level the playing field regarding the substantial ba rriers faced by
minority households by assisting those individuals with education-relat-
ed debt to purchase a home by incorporating all or a portion of student
debt held by the borrower into the home loan. This essential piece of
legislation could greatly reduce the disparate costs borne by minority
households or those of color.
PRIOR LEGISLATIVE HISTORY::
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS::
To be determined.
EFFECTIVE DATE::
This act will take effect on the one hundredth eightieth day after it
shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
4336
2025-2026 Regular Sessions
IN ASSEMBLY
February 4, 2025
___________
Introduced by M. of A. TAPIA, GONZALEZ-ROJAS -- read once and referred
to the Committee on Housing
AN ACT to amend the public authorities law, in relation to establishing
the "New York student loan assistance and home purchase act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "New York
2 student loan assistance and home purchase act".
3 § 2. The public authorities law is amended by adding a new section
4 2405-g to read as follows:
5 § 2405-g. Student loan assistance and home purchase program. 1. Defi-
6 nitions. For the purposes of this section, the following terms shall
7 have the following meanings:
8 (a) "Program" means the student loan assistance and home purchase
9 program established pursuant to subdivision two of this section.
10 (b) "Student loan" means any loan to a borrower to finance post-secon-
11 dary education or expenses related to post-secondary education. For the
12 purposes of this section, the term "student loan" shall not be limited
13 to loans, as such term is defined by subdivision ten of section twenty-
14 four hundred two of this part.
15 2. Program established. The agency shall establish a "student loan
16 assistance and home purchase program", to be administered by the agency,
17 for the purposes of facilitating the purchase of homes by individuals
18 who are burdened by student debt, by providing financing opportunities
19 pursuant to subdivision three of this section. The chair of the agency
20 shall appoint a director of the program to oversee the implementation of
21 the program.
22 3. Student loan assistance and home purchase program; implementation.
23 (a) The program shall assist individuals who apply and are accepted to
24 the program pursuant to paragraph (b) of this subdivision, by consol-
25 idating all or a portion of such individuals' student loans into such
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08171-01-5
A. 4336 2
1 individuals' mortgages. The program shall be authorized to purchase
2 mortgages, existing mortgages, and student loans from banks as needed to
3 effectuate the provisions of this section. There shall be no limit to
4 the amount of student loan debt that may be incorporated into a mortgage
5 or existing mortgage pursuant to this section, unless otherwise provided
6 by state or federal law.
7 (b) The program shall establish an application process whereby
8 prospective homeowners who are residents of the state with student debt,
9 may apply to the program for consolidation of such residents' student
10 debt with a mortgage or existing mortgage. In considering an applicant
11 to the program, the program shall not consider foreclosure status, home
12 cleanliness, or whether the home will be such applicant's first home.
13 (c) Individuals who are accepted to the program pursuant to this
14 section shall be required to maintain the purchased home as their prima-
15 ry residence for no less than five years from the date of closing. The
16 commissioner of housing and community renewal shall establish penalties
17 and fees applicable for violations of this paragraph.
18 (d) The program shall comply with all applicable federal laws and
19 regulations.
20 4. Rules and regulations. The commissioner of housing and community
21 renewal shall promulgate any rules and regulations necessary for the
22 establishment and implementation of the program under this section.
23 Further, the commissioner of housing and community renewal shall promul-
24 gate rules and regulations establishing:
25 (a) eligibility requirements for acceptance of individuals who apply
26 to the program; and
27 (b) interest rates and other penalties, charges, and fees in an amount
28 necessary to implement the program.
29 § 3. This act shall take effect on the one hundred eightieth day after
30 it shall have become a law. Effective immediately, the addition, amend-
31 ment and/or repeal of any rule or regulation necessary for the implemen-
32 tation of this act on its effective date are authorized to be made and
33 completed on or before such effective date.
