NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2135
SPONSOR: Dinowitz (MS) TITLE OF BILL: An act to amend the real property law, in relation to
including cooperative unit loan dwellings as those eligible for reverse
mortgages for persons seventy years of age or older
PURPOSE:
To enable owners of co-op apartments, who are over the age of 70, the
ability to obtain reverse mortgages, in a manner similar to the way such
reverse mortgages can be secured by the owner of a one to four-family
owner/occupied residence or condominium unit owner.
SUMMARY OF PROVISIONS:
Section 1: Amends Real Property Law section 280-a 1(a) to include in the
category of owner occupied residential properties that can obtain a
reverse mortgage, a Coop unit, in addition to the already authorized
owner occupied residential real properties, such as single family homes,
owner occupied town homes, and condominium units. This expansion in the
ability to obtain such a reverse mortgage would be only for persons who
are 70 years of age or older.
EXISTING LAW:
The current law allows for owners of one to four family residences or
condominiums that is the residence of the mortgagor to apply for a
reverse mortgage if the mortgagor is over the age of 65 (see Real Prop-
erty Law section 280) and over the age of 70 (see Real Property Law
section 280-a). This provision adds the owners of cooperative housing
units, who are over the age of 70, in the category of those allowed to
apply for reverse mortgages.
JUSTIFICATION:
This legislation would level the playing field for many senior citizens
who live in New York, many of whom are of low to middle income, who own
their primary residence by means of a cooperative unit, as opposed to
being owned as condominium or one to four family unit residence. While
some estimates state that only about 10% of national housing units are
structured in cooperative units, the percentage in New York City may be
closer to up to 75 percent. Therefore, the current law on obtaining
money via a reverse mortgage financing plan excludes a large portion of
residents who own their residences in one of the most expensive residen-
tial markets in the nation. Further, this current situation in the law
precludes such persons, over the age of 70, from taking advantage of a
financing program that would allow them to remain in their homes unen-
cumbered by the fear of eviction or unmet medical or other expenses.
LEGISLATIVE HISTORY:
2015-16- A.10246 - Referred to Housing/S.7844 - Passed Senate
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
2135
2017-2018 Regular Sessions
IN ASSEMBLY
January 17, 2017
___________
Introduced by M. of A. DINOWITZ, SEAWRIGHT, COOK, JOYNER, OTIS, ABBATE,
GOTTFRIED, ROSENTHAL, CRESPO, HOOPER, QUART, BRAUNSTEIN -- Multi-Spon-
sored by -- M. of A. HEVESI -- read once and referred to the Commit-
tee on Housing
AN ACT to amend the real property law, in relation to including cooper-
ative unit loan dwellings as those eligible for reverse mortgages for
persons seventy years of age or older
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (a) of subdivision 1 of section 280-a of the real
2 property law, as added by chapter 613 of the laws of 1993, is amended to
3 read as follows:
4 (a) Reverse mortgage loan. A loan which is secured by a first mortgage
5 on real property improved by a one to four-family residence [or], condo-
6 minium or cooperative unit that is the residence of the mortgagor(s) the
7 proceeds of which are advanced to the mortgagor(s) during the term of
8 the loan in equal installments, or in advances through a line of credit
9 or otherwise, in lump sums, or through a combination thereof.
10 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03795-01-7
