Establishes a reverse loan mortgage loan program for seniors; provides for the state of NY mortgage agency to establish many of the parameters for the implementation of the program; defines terms; requires a care needs assessment of each applicant; provides that area agencies on aging shall provide counseling and assistance to applicants; requires independent counseling in compliance with HUD regulations; directs the state of New York mortgage agency to issue an annual report to the governor and the legislature.
STATE OF NEW YORK
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1111
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. SIMON, WILLIAMS, COLTON, DeSTEFANO -- Multi-Spon-
sored by -- M. of A. COOK, HYNDMAN, REYES -- read once and referred
to the Committee on Housing
AN ACT to amend the public authorities law, in relation to establishment
of a reverse mortgage loan program for seniors
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings. The legislature finds and declares
2 that many senior citizens living in New York own their own homes and
3 want to continue to live at home for as long as possible. Nationally,
4 with over two trillion dollars tied up in home equity, reverse mortgages
5 have the potential to dramatically increase the ability of seniors to
6 pay for their long-term care and remain in their homes. Today, over
7 eighty percent of older Americans own their own homes, seventy-three
8 percent of which are owned free and clear of any mortgages. Unlocking
9 these resources can help "house-rich and cash-poor" seniors purchase the
10 long-term care services they feel best meet their needs. Private funds
11 from reverse mortgages also can strengthen community long-term care
12 systems and reduce the burden on state and local Medicaid budgets. The
13 purpose of this act is to establish a reverse mortgage loan program
14 within the state of New York mortgage agency to enable elderly homeown-
15 ers to stay at home and pay for their long-term care.
16 § 2. The public authorities law is amended by adding a new section
17 2405-g to read as follows:
18 § 2405-g. Reverse mortgage loan program for seniors. (1) Authori-
19 zation. Notwithstanding any provision of law to the contrary, the agency
20 is hereby authorized and directed to establish a reverse mortgage loan
21 program for the purpose of enabling senior homeowners to use the equity
22 in their homes to provide for their long-term care needs. The super-
23 intendent of financial services is hereby authorized to vary any rules
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02569-01-5
A. 1111 2
1 and regulations pertaining to reverse mortgage loans to accommodate the
2 needs of the program.
3 (2) Definitions. For purposes of this section the following terms
4 shall have the following meanings unless the context shall indicate
5 another or different meaning or intent:
6 (a) "program" shall mean the reverse mortgage loan program for
7 seniors,
8 (b) "applicant" shall mean an individual who is applying to partic-
9 ipate in the program,
10 (c) "borrower" shall mean an individual who is eligible to participate
11 in the program pursuant to subdivision four of this section,
12 (d) "reverse mortgage loan" shall mean a loan for a term of years to
13 be determined by the agency, in which loan proceeds are advanced to a
14 borrower in equal, monthly installments and may include an initial,
15 one-time lump sum payment of up to five thousand dollars,
16 (e) "loan" shall mean a reverse mortgage loan issued pursuant to the
17 terms of this section,
18 (f) "income" shall mean income that does not exceed the income limits
19 established by the agency, and
20 (g) "assessment" shall mean the care needs assessment described in
21 subdivision five of this section.
22 (3) Terms and conditions of the loan. Loans shall only be issued to
23 applicants who own and occupy a single family dwelling, a condominium or
24 a co-op. If a borrower vacates such borrower's residence, the loan
25 payments shall cease and the balance of the loan shall become due. A
26 borrower shall notify the agency upon vacating such borrower's resi-
27 dence. Loans issued by the program shall offer a low, fixed interest
28 rate, to be determined by the agency. Any loan origination fees, closing
29 costs or fees charged by the program shall be at a reduced rate, to be
30 determined by the agency. The agency shall not impose pre-payment penal-
31 ties on any loan. The loan shall also include the cost of the care needs
32 assessment required under subdivision five of this section. Loans shall
33 not be issued to borrowers whose income exceeds the maximum income
34 limits established by the agency. Loans shall not be issued for more
35 than eighty percent of the value of the borrower's home, with minimum
36 and maximum loan amounts to be determined by the agency on a case by
37 case basis.
38 In its determination of minimum and maximum loan amounts, the agency
39 shall consider the following criteria:
40 (a) the amount of the applicant's personal and household income,
41 assets, and other financial resources available to meet the needs of the
42 applicant and the applicant's household;
43 (b) the value of the applicant's residence as determined by the agen-
44 cy; and
45 (c) the information contained in the applicant's care needs assessment
46 provided by an area agency on aging, including the special needs of
47 particular applicants because of physical or mental disabilities or
48 impairments.
49 (4) Eligibility of applicants. In order to be eligible for the
50 program, an applicant must be an individual age sixty-five years or
51 older, be the owner and occupant of a single family dwelling or condo-
52 minium, who has lost some or all of the capacity to function on such
53 applicant's own due to a chronic illness or condition, and who, based on
54 an assessment performed by an area agency on aging pursuant to subdivi-
55 sion five of this section, requires or is expected to require one or
56 more of the following items or services for an extended period of time
A. 1111 3
1 of six consecutive months or more: home care, including nursing and
2 personal care services, homemaker and chore services, including chore
3 services related to home maintenance or repair, nutrition services,
4 transportation, counseling, physical therapy and other medical or non-
5 medical support services, respite, adult day care, durable medical
6 equipment, medically indicated home alterations, and uninsured
7 catastrophic or recurring medical expenses including prescription drugs.
8 An applicant's personal and household income may not exceed the maximum
9 income limits established by the agency.
10 (5) Care needs assessment. As part of the loan approval process, an
11 area agency on aging shall conduct an assessment of each applicant in
12 order to identify the applicant's care needs, including information
13 necessary to determine whether the applicant requires or is expected to
14 require one or more of the items or services specified in subdivision
15 four of this section, and if so, which items or services are required or
16 expected to be required, the duration for which the items or services
17 are expected to be required, and the estimated cost of the items or
18 services. The assessment shall be conducted face-to-face with the appli-
19 cant, and, if requested by the applicant, such applicant's authorized
20 representative and informal caregivers, using the standardized process
21 and instrument prescribed by the office for the aging for expanded
22 in-home services for the elderly program (EISEP) clients, unless the
23 area agency has received approval from said office to use a different
24 instrument. All information derived from the assessment of the applicant
25 shall be confidential and shared only with others involved in the
26 arrangement or provision of services to the applicant pursuant to writ-
27 ten consent from the applicant or such applicant's authorized represen-
28 tative. If, based on the assessment, the applicant is determined to have
29 a need for or is expected to need any of the items or services contained
30 in subdivision four of this section, such applicant shall be deemed
31 functionally eligible for the program.
32 (6) Counseling and assistance. The area agencies on aging shall
33 provide counseling and assistance to applicants who wish to obtain a
34 reverse mortgage loan from the program. Counseling and assistance shall
35 include the following:
36 (a) reviewing with the applicant the terms and restrictions of the
37 loan, including assisting the applicant with determining whether the
38 loan would jeopardize the applicant's eligibility for Medicaid and other
39 means-tested programs;
40 (b) identifying community based long-term care services, in accordance
41 with the applicant's needs as demonstrated in the care needs assessment,
42 including medical and non-medical in-home support programs, and provid-
43 ing information on how to access these services, including provider
44 directories, and case management services;
45 (c) exploring with the applicant the possibility of the applicant
46 becoming unable to manage such applicant's finances, and in this event,
47 having the applicant consider who such applicant would want to manage
48 such applicant's finances, and advising the applicant of the need to
49 obtain estate planning counseling and proper legal documentation in
50 order to effectuate such applicant's wishes under these circumstances;
51 and
52 (d) discussing with the applicant their wishes regarding how title of
53 the residence should be transferred upon the death of the applicant, and
54 advising the applicant of the need to obtain estate planning counseling
55 and proper legal documentation in order to ensure that such applicant's
56 wishes are carried out.
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1 (7) (a) Prior to accepting a final and complete application for a
2 reverse mortgage the lender shall provide the borrower with a list of
3 not fewer than ten counseling agencies that are approved by the United
4 States Department of Housing and Urban Development to engage in reverse
5 mortgage counseling as provided in Subpart B of Part 214 of Title 24 of
6 the Code of Federal Regulations. The counseling agency shall not receive
7 any compensation, either directly or indirectly, from the lender or from
8 any other person or entity involved in originating or servicing the
9 mortgage or the sale of annuities, investments, long-term care insur-
10 ance, or any other type of financial or insurance product. This subdivi-
11 sion shall not prevent a counseling agency from receiving financial
12 assistance that is unrelated to the offering or selling of a reverse
13 mortgage loan and that is provided by the lender as part of charitable
14 or philanthropic activities.
15 (b) A lender shall not accept a final and complete application for a
16 reverse mortgage loan from a prospective applicant or assess any fees
17 upon a prospective applicant without first receiving certification from
18 the applicant or the applicant's authorized representative that the
19 applicant has received counseling from an agency as described in para-
20 graph (a) of this subdivision and that the counseling was conducted in
21 person, unless the certification specifies that the applicant elected to
22 receive the counseling in a manner other than in person. The certif-
23 ication shall be signed by the borrower and the agency counselor, and
24 shall include the date of the counseling and the name, address, and
25 telephone number of both the counselor and the applicant. Electronic
26 facsimile copy of the housing counseling certification satisfies the
27 requirements of this subdivision. The lender shall maintain the certif-
28 ication in an accurate, reproducible, and accessible format for the term
29 of the reverse mortgage.
30 (c) A lender shall not make a reverse mortgage loan without first
31 complying with, or in the case of brokered loans ensuring compliance
32 with, the requirements of this subdivision.
33 (8) Outreach by the program. The agency shall advertise the program in
34 a brochure which it shall create and distribute to each area office for
35 the aging. The agency shall provide the brochure to each local social
36 services district to distribute to individuals who are applying for
37 Medicaid nursing home or home care services.
38 (9) Report. The agency shall issue an annual report to the governor,
39 the temporary president of the senate and the speaker of the assembly.
40 Such report shall contain, at a minimum, the following information: the
41 number of loan applications submitted to the program, the number of loan
42 applications approved and the number denied, the reasons for denial, the
43 number of loans issued by the program, the incomes and ages of the
44 borrowers, the purpose for which a loan was issued, any suggestions for
45 improving or expanding the program, and a description of the program's
46 funding sources and whether they are adequate.
47 (10) Rulemaking authority. The agency shall adopt all procedural and
48 substantive rules and regulations necessary to implement and administer
49 the provisions of this section.
50 § 3. This act shall take effect on the one hundred eightieth day after
51 it shall have become a law.
