A bill that would allow seniors aged 70 or older living in New York state to take out a reverse mortgage loan on a co-operative living space has been signed by Gov. Kathy Hochul, making it the law of the land in the state of New York. This is according to the latest information regarding the bill made available by the New York State Assembly and the New York State Senate.
Since the Federal Housing Administration (FHA) does not permit Home Equity Conversion Mortgages (HECMs) on co-ops, the reverse mortgage activity for such dwellings will be limited to proprietary products in New York.
The newest version of the bill — which serves as the culmination of a years-long effort by members of the reverse mortgage industry and New York state lawmakers — was authored after a similar bill that would allow reverse mortgages on co-ops failed to overcome a veto by then-Gov. Andrew Cuomo. The latest version of the bill was passed less than 60 days before Cuomo resigned from office following allegations of sexual misconduct, and appeared to be in legislative limbo precisely because of the turnover in the governor’s office.
However, nearly six months after it cleared the State Assembly and the State Senate, the bill was delivered to Gov. Hochul who signed it in relatively short order. The governor acted well within a deadline of 30 days, avoiding a “pocket veto” and allowing the bill to become law.
Soroush Shahin of law firm Weiner Brodsky Kider (WBK), PC based in Washington, D.C. – which worked in concert with the National Reverse Mortgage Lenders Association (NRMLA) on the bill – described a sense of accomplishment for seniors who could be assisted by this legislation.
“We are glad seniors in New York who live in co-ops will now have the ability to obtain reverse mortgages,” Shahin told RMD. “And we look forward to working with our clients, industry participants, and the superintendent to help effectuate the intent of the bill.”
Lawmakers who worked to get the bill passed lauded the development, including Democrats Senator Alessandra Biaggi and Assemblyman Jeffrey Dinowitz who each sponsored the bill in their respective chambers. Both lawmakers describe the move as necessary given the support it had garnered from advocates for cooperative housing in the state of New York.
“This legislation will grant elderly and low to middle-income co-op residents the same resources and protections as traditional homeowners, ensuring that they are not ever forced to sell their homes and leave their communities if in need of additional loans,” Sen. Biaggi said in a statement. “These protections will safeguard elderly communities and allow New York’s seniors, who so desperately wish to stay in their homes, the ability to do so. I am grateful to Assemblymember Dinowitz for his continued advocacy on this issue, and to Governor Hochul for signing this legislation into law and protecting our senior homeowners.”
Rep. Dinowitz also lauded the bill’s passage as a sign of specific attention to seniors residing in the state, and as an acknowledgment of co-operative housing’s prominence in New York.
“I am proud that this legislation has finally been signed into law, and I am grateful to the many organizations who helped support and shape this policy on behalf of older cooperators,” Dinowitz said. “Thank you to Governor Hochul for looking at this legislation with a fresh pair of eyes, and I look forward to a future New York where people are not compelled to leave their homes simply because they need some extra cash flow.”
Also adding to the conversation was AARP New York State Director Beth Finkel, Association of Riverdale Cooperatives & Condominiums President Stephen Budihas and Executive Director of the Council of New York Cooperatives & Condominiums Mary Ann Rothman.
“When Governor Hochul signed the reverse mortgage legislation it provided hundreds of seniors the hope of living out their lives in the housing cooperatives that have long been their homes,” Rothman said.
Read the statements from the lawmakers and the other stakeholder organizations.
Editor’s Note: This story has been updated to specify that proprietary reverse mortgages – and not FHA-sponsored HECMs – are the only types of reverse mortgages currently permitted for New York co-op residents.