Establishes the New York state diplomas to homeownership assistance program; provides awards of up to fifteen thousand dollars to eligible applicants for repayment on student loans; makes an appropriation therefor.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4830
SPONSOR: Barclay (MS) TITLE OF BILL:
An act to amend the education law and the public authorities law, in
relation to establishing the New York state diplomas to home ownership
program; and making an appropriation therefor
PURPOSE OR GENERAL IDEA OF BILL:
To create the New York State Diplomas to Home Ownership program
SUMMARY OF PROVISIONS:
Section 1 adds a new section to the Education Law 679-j to establish the
New York State Diplomas to Home Ownership program. Specifically, this
subdivision 1 provides definitions for award, qualified property, delin-
quent, and program.
Subdivision 2 sets forth the eligibility requirements of this program.
Applicants must have graduated from a high school located in the State
or attended and received an approved state program for a state high
school equivalency diploma, be a graduate and a recipient of an under-
graduate degree from a college or university located in the state, have
outstanding student loan debt from obtaining such degree, be a first
time homebuyer, not be delinquent on a federal student loan or in
default on a student loan made under any State or federal education loan
program and be in the process of purchasing a qualified property.
Subdivision 3 provides for the administration of an award under this
program. Administration of the award is to be set forth in a manner
prescribed by the Higher Education Services Corporation (HESC).
Subdivision 4 sets the amount and duration of an award under this
program. The award amount shall be equal to 10% of the purchase price of
the qualified property, which shall not exceed $15,000. In the event
that 10% of the purchase price of a qualified property exceeds the
remaining balance of the recipient's student loan debt, the amount shall
be equal to the amount of debt remaining, not to exceed $15,000. The
award may only be used as payment toward an outstanding debt.
Subdivision 5 provides that an award under this program shall be
distributed to a recipient in the form of a State of New York Mortgage
Agency loan.
Subdivision 6 establishes a repayment provision; should the award recip-
ient not remain in the property for a period of five continuous years
the recipient will be required to repay such award to the State of New
York Mortgage Agency in the manner prescribed in the bill.
Section 2 directs the New York State Mortgage Agency to issue loans to
recipients of the New York State Diplomas to Home ownership program.
Section 3 provides an appropriation.
Section 4 sets forth the effective date.
JUSTIFICATION:
According to the Brookings Institution, Americans now owe a record $1.3
trillion in student loans. In 2016, the NYS Comptroller released a
report that indicates that over the past decade, student loan debt for
New Yorkers has grown by more than $10,000 for the average borrower. For
many New Yorkers, high student debt and the cost of living have made it
difficult for them to achieve the dream of home ownership.
The Diplomas to Home Ownership is an innovative program designed to
assist college graduates achieve the dream of home ownership while at
the same time helping revitalize and strengthen neighborhoods. Modeled
after similar programs implemented in Maryland and Rhode Island, the
program seeks to encourage home ownership for young professionals by
providing financial assistance with student loan debt.
Under the program, an interested homebuyer would be able to receive a
cash award to be applied to their student loan debt when purchasing a
property from one of the 15 Land Banks in New York State. The award will
be equal to ten percent of the purchase price of the property up to
$15,000.
By pairing the program with Land Bank acquired properties it will drive
investment back into communities and neighborhoods that need revitaliza-
tion. Further, it will support the sustainability of the Land Banks.
Enacted in 2011, the Land Bank Act intention is to help select communi-
ties address abandoned or tax delinquent properties. While each land
bank is unique and can create individualized plans based on the communi-
ty's needs, the overarching goal for all programs is for the acquired
properties to be returned to productive use.
This program seeks to maximize the state investment by linking together
the benefit to the young professionals, the viability of local land
banks, investment in upstate communities and revitalization efforts.
Lastly, this program will encourage talented young people to stay in New
York State.
PRIOR LEGISLATIVE HISTORY:
A6413 of 2021-22 Held in Higher Education
A5017 of 2019-20 Held in Higher Education
A8680 of 2017-18 Referred to Higher Education
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
4830
2023-2024 Regular Sessions
IN ASSEMBLY
February 23, 2023
___________
Introduced by M. of A. BARCLAY, McDONOUGH, LEMONDES, DeSTEFANO,
J. M. GIGLIO -- Multi-Sponsored by -- M. of A. K. BROWN, MANKTELOW --
read once and referred to the Committee on Higher Education
AN ACT to amend the education law and the public authorities law, in
relation to establishing the New York state diplomas to home ownership
program; and making an appropriation therefor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The education law is amended by adding a new section 679-k
2 to read as follows:
3 § 679-k. New York state diplomas to homeownership program. 1. Defi-
4 nitions. (a) "Award" means a New York state diplomas to homeownership
5 program award.
6 (b) "Qualified property" means an approved land bank property pursuant
7 to article sixteen of the not-for-profit corporation law.
8 (c) "Delinquent" means the failure to pay a required scheduled payment
9 on a federal student loan within thirty days of such payment's due date.
10 (d) "Program" means the New York state diplomas to homeownership
11 program.
12 2. Eligibility. To be eligible for an award pursuant to this section,
13 applicants shall:
14 (a) have graduated from a high school located in the state or attended
15 an approved state program for a state high school equivalency diploma
16 and received such diploma. An applicant who received a high school
17 diploma, or its equivalent, from another state is ineligible for a
18 program award;
19 (b) have graduated and obtained an undergraduate degree from a college
20 or university located in New York state;
21 (c) have outstanding student loan debt from obtaining such degree;
22 (d) have not previously purchased a home at the time of application
23 for the program;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04886-01-3
A. 4830 2
1 (e) not be delinquent on a federal student loan or in default on a
2 student loan made under any statutory New York state or federal educa-
3 tion loan program; and
4 (f) be in the process of purchasing a qualified property; and
5 (g) not be received in conjunction with any other state homebuyers
6 incentives programs.
7 3. Administration. An applicant for an award shall apply for program
8 eligibility at such times, on forms and in a manner prescribed by the
9 corporation. The corporation may require applicants to provide addi-
10 tional documentation evidencing eligibility, including but not limited
11 to proof of loan amounts, and qualified property assessment and valu-
12 ation.
13 4. Amounts and duration. (a) The amount of the award shall be equal to
14 ten percent of the purchase price of the qualified property, not to
15 exceed fifteen thousand dollars.
16 (b) In the event that ten percent of the purchase price of a qualified
17 property exceeds the remaining balance of the recipient's student loan
18 debt, the amount shall be equal to the amount of debt remaining, not to
19 exceed fifteen thousand dollars.
20 (c) The award shall only be used as payment towards any outstanding
21 federal student loan or education loans taken out by the recipient.
22 (d) Payments shall be made directly to the entity that collects
23 payments on the federal student loan or loans on behalf of the recipient
24 on a monthly basis.
25 (e) Proof of payment shall be provided to the corporation within nine-
26 ty days of receipt of the award. Failure to provide proof of payment
27 will result in full repayment of the award amount by the award recipi-
28 ent.
29 (f) A maximum fifteen thousand dollars may be awarded.
30 5. Distribution of award. Such award shall be given to the recipient
31 in the form of a state of New York mortgage agency loan pursuant to
32 subdivision seventeen-a of section twenty-four hundred four of the
33 public authorities law.
34 6. Repayment. (a) A recipient of an award pursuant to this section who
35 is not a resident of the qualified property for a period of five contin-
36 uous years shall be required to repay such award to the state of New
37 York mortgage agency.
38 (b) If a recipient is required to repay any payment or payments to the
39 agency, the following provisions shall apply:
40 (1) If the recipient moves less than twelve months after the award was
41 made one hundred percent of the loan amount shall be due;
42 (2) If the recipient moves twelve months to twenty-four months after
43 the award was made eighty percent of the loan amount shall be due;
44 (3) If the recipient moves twenty-four months to thirty-six months
45 after the award was made sixty percent of the loan amount shall be due;
46 (4) If the recipient moves thirty-six months to forty-eight months
47 after the award was made forty percent of the loan amount shall be due;
48 and
49 (5) If the recipient moves forty-eight months to sixty months after
50 the award was made twenty percent of the loan amount shall be due;
51 (c) The interest rate shall be fixed and equal to the rate established
52 by section eighteen of the state finance law.
53 (d) Where a recipient has demonstrated extreme hardship as a result of
54 a disability, labor market conditions, or other such circumstances, the
55 agency may, in its discretion, waive or defer payment, extend the repay-
56 ment period, or take such other appropriate action.
A. 4830 3
1 § 2. Section 2404 of the public authorities law is amended by adding a
2 new subdivision 17-a to read as follows:
3 (17-a) To issue loans to recipients of the New York state diplomas to
4 homeownership program pursuant to section six hundred seventy-nine-k of
5 the education law;
6 § 3. The sum of five million dollars ($5,000,000), or so much thereof
7 as may necessary, is hereby appropriated to the state of New York mort-
8 gage agency out of any moneys in the state treasury in the general fund
9 to the credit of the New York state diplomas to homeownership program,
10 not otherwise appropriated, and made immediately available, for the
11 purpose of carrying out the provisions of this act. Such moneys shall be
12 payable on the audit and warrant of the comptroller on vouchers certi-
13 fied or approved by the state of New York mortgage agency in the manner
14 prescribed by law.
15 § 4. This act shall take effect immediately.
