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Committee approves licensing framework for shared-equity home financing
Summary
Lawmakers approved amendment A03014 and passed House Bill 21 20 as amended to create licensing, disclosure and enforcement rules for shared-equity (shared appreciation) home financing, including a $5,000 initial license fee and $2,500 annual renewal for providers.
The Commerce Committee unanimously approved an amendment and then passed House Bill 21 20 as amended, establishing a regulatory framework for shared-equity agreements in residential property transactions.
Representative Torczyk offered amendment A03014, which a staff summary described as a near-complete rewrite of the original bill that would add a new Chapter 63 to Title 7 (Banks and Banking). Jen summarized the measure’s provisions: licensing requirements and application procedures for shared-equity service providers; an initial license fee of $5,000 and a $2,500 annual renewal fee; disclosure and counseling requirements for homeowners; and authority for the Department of Banking and Securities to suspend, revoke or refuse licenses. The amendment also creates civil remedies for homeowners affected by violations, including damages and reasonable attorney fees, and penalties for unlicensed activity.
Representative Powell explained the product to the committee and warned that home shared-equity agreements can be "incredibly predatory." Powell described the mechanics: a homeowner might accept 10% of their home's value as a lump sum and later owe a percentage of future appreciation (Powell used a numerical example to illustrate how repayment can exceed the original amount). Powell said vulnerable populations, including seniors and people unable to access traditional loans, could be at particular risk and urged guardrails rather than an outright ban.
Representative Torczyk said the amendment reflected input from multiple stakeholders and the Department of Banking. Representative Venkat and other sponsors urged an affirmative vote. The committee approved the amendment unanimously and then passed the bill as amended unanimously.
The amendment tasks the Department of Banking and Securities with promulgating regulations to administer the new chapter; no implementation timeline or fiscal note was read aloud at the hearing. The committee did not record individual member votes for the final bill in the transcript; the chair announced unanimous passage.
