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: A5697
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:
A4830 of 2023-24 Referred to Higher Education
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
