STATE OF NEW YORK ________________________________________________________________________ 1582 2023-2024 Regular Sessions IN ASSEMBLY January 17, 2023 ___________ Introduced by M. of A. SIMON -- Multi-Sponsored by -- M. of A. COLTON, COOK, HYNDMAN, REYES, WILLIAMS -- 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. LBD01979-01-3A. 1582 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 his or her residence, the loan payments 25 shall cease and the balance of the loan shall become due. A borrower 26 shall notify the agency upon vacating his or her residence. Loans 27 issued by the program shall offer a low, fixed interest rate, to be 28 determined by the agency. Any loan origination fees, closing costs or 29 fees charged by the program shall be at a reduced rate, to be determined 30 by the agency. The agency shall not impose pre-payment penalties on any 31 loan. The loan shall also include the cost of the care needs assessment 32 required under subdivision five of this section. Loans shall not be 33 issued to borrowers whose income exceeds the maximum income limits 34 established by the agency. Loans shall not be issued for more than 35 eighty percent of the value of the borrower's home, with minimum and 36 maximum loan amounts to be determined by the agency on a case by case 37 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 his or 53 her own due to a chronic illness or condition, and who, based on an 54 assessment performed by an area agency on aging pursuant to subdivision 55 five of this section, requires or is expected to require one or more of 56 the following items or services for an extended period of time of sixA. 1582 3 1 consecutive months or more: home care, including nursing and personal 2 care services, homemaker and chore services, including chore services 3 related to home maintenance or repair, nutrition services, transporta- 4 tion, counseling, physical therapy and other medical or non-medical 5 support services, respite, adult day care, durable medical equipment, 6 medically indicated home alterations, and uninsured catastrophic or 7 recurring medical expenses including prescription drugs. An applicant's 8 personal and household income may not exceed the maximum income limits 9 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, his or her authorized repre- 20 sentative and informal caregivers, using the standardized process and 21 instrument prescribed by the office for the aging for expanded in-home 22 services for the elderly program (EISEP) clients, unless the area agency 23 has received approval from said office to use a different instrument. 24 All information derived from the assessment of the applicant shall be 25 confidential and shared only with others involved in the arrangement or 26 provision of services to the applicant pursuant to written consent from 27 the applicant or his or her authorized representative. If, based on the 28 assessment, the applicant is determined to have a need for or is 29 expected to need any of the items or services contained in subdivision 30 four of this section, such applicant shall be deemed functionally eligi- 31 ble 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 his or her finances, and in this event, having 47 the applicant consider who he or she would want to manage his or her 48 finances, and advising the applicant of the need to obtain estate plan- 49 ning counseling and proper legal documentation in order to effectuate 50 his or her wishes under these circumstances; and 51 (d) discussing with the applicant his or her wishes regarding how 52 title of the residence should be transferred upon the death of the 53 applicant, and advising the applicant of the need to obtain estate plan- 54 ning counseling and proper legal documentation in order to ensure that 55 his or her wishes are carried out.A. 1582 4 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.