Relates to creating the mortgage assisted population recovery program

Title of bill

An act to amend the private housing finance law, in relation to creating the mortgage assisted population recovery program

Purpose

To provide an incentive for first-time homebuyers and potential out-of-area homebuyers to purchase homes in counties that have suffered population loss.

Summary of provisions

Section 1 amends the Private Housing Finance Law by adding a new Section 45-d, creating the Mortgage Assisted Repopulation Program. The Program requires the State of New York Mortgage Agency (SONYMA) to make the mortgage and down payment incentives it offers potential homebuyers in economically distressed areas available to potential homebuyers in counties that have suffered population loss from the 2000 decennial census to the present. Homebuyer eligibility includes first-time homebuyers and potential homebuyers who have been established residents outside the respective county for at least a year prior to their application to the program. A homebuyer, the homebuyer's spouse, the homebuyer's domestic partner, or the homebuyer's co-signatory on the mortgage or co-owner on the property deed can take advantage of the program only once. Qualifying counties that experience 24 consecutive months of population growth will be removed from the list of qualified counties.

Section 2 is the effective date.

Justification

Formerly industrial cities nationwide face higher residential vacancy rates and declining populations, even as other cities are seeing population increases.{1} With its history of industrial strength, the situation in upstate New York reflects this trend. Upstate localities are losing population, especially younger and working-age residents.{2} Twenty-eight upstate counties have suffered population loss since the 2000 decennial census, ranging from Greene County in the Hudson Valley, which has seen a relatively small decline of .04%, to Hamilton County in the State's North Country, which has seen a decline of over 12% during the same period.{3} Although federal programs exist to encourage home buying in certain federally-targeted areas classified as distressed,{4} expanded state programs could attract new residents to upstate cities, towns, and villages through location-based mortgage assistance, direct state incentives for housing and home-ownership in vacant areas, or other programs.{5}

The Mortgage Assisted Population Recovery Program seeks to address this problem by expanding the home buying incentives that are currently directed at distressed areas to those counties that have experienced population loss from the 2000 decennial census to the 2014 estimated population, as determined by the U.S. Bureau of the Census. Eligible buyers must either be first-time homebuyers or have had established residences outside the eligible county for at least a year prior to application to the program. The Program is designed to add another incentive for young homebuyers to stay in the area rather than move away, and attract both those who have moved away back to New York.

Legislative history

New Bill. FISCAL IMPLICATIONS :

To be determined.

Effective date

This act shall take effect immediately. {1} See Vey, J., The Brookings Institution Metropolitan Policy Program, Restoring Prosperity: The State Role in Revitalizing America's Older Industrial Cities (2007) at 25. {2} McMahon, E.J. "The Graying of the Empire State." Empire Center. 8/16/2012; Ellis, K. "Panel examines New York's 'rural brain drain." 4/19/2011; Federal Reserve Bank of New York. "Upstate at a Glance." December 2007. {3} U.S. Bureau of the Census. {4} see http://portal.hud.gov/hudportal/HUD?src./program offices/housing/sfh/reo/abtrevt (describing the FHA Revitalization Area Sales Programs); currently many New York State mortgage incentives incorporate definitions from these federal programs. See, e.g., http://www.nyshcr.org/topics/home/purchasingahomeinatargetarea.htm. {5} For example, Maryland has initiated a variety of mortgage incentives, grants and other assistance to attract new residents and homebuying throughout Baltimore. See htt:/livebaltimore.com/financial-incentives/.