A new bill to establish a reverse mortgage program for low income seniors to enable them to use the equity in their homes to provide for their long term care needs was introduced in the New York state Senate earlier this month.
According to the legislative findings, there are many senior citizens living in New York own their own homes and want to continue to live at home for as long as possible. By unlocking the funds through a reverse mortgage, “house-rich and cash-poor” seniors can purchase the long-term care services they feel best meet their needs.
“Private funds from reverse mortgages also can strengthen community long-term care systems and reduce the burden on state and local Medicaid budgets,” said the findings.
According to the bill, any loan origination fees, closing costs or fees charged by the program would be at a reduced rate determined by the New York mortgage agency. The loans would only be available to borrowers whose income does not exceed the maximum income limits established by the agency. In addition, the loans will not have a pre-payment penalty, not be issued for more than 80 percent of the value of the borrowers home, and the loan should include the cost of the care needed.
S639 was introduced by Senator Martin J. Golden at the end of December and was referred to the corporations, authorities and commissions on January 2.