Bill > HB05209

This bill establishes various requirements for shared appreciation agreements, which are financial arrangements where a borrower receives a lump sum payment from a lender in exchange for sharing a portion of the property's appreciation in value. The bill clarifies that interest charged under these agreements will be simple interest calculated on the lump sum payment and that these agreements are subject to specific state laws regarding interest and usury. It prohibits provisions that restrict a borrower's use of their property, prevent refinancing, or require the borrower to pay more than half of third-party origination or servicing costs. Furthermore, the bill disallows prepayment penalties, waiving borrower rights, charging the borrower for the lender's attorney fees in disputes, confidentiality clauses, or unilateral changes to the agreement by the lender. Key terms of the agreement must include advance notice of borrower actions, a prompt payoff quote, a clear termination process, credit for improvements or increased property value, and appraisals by independent, certified appraisers. Borrowers will have a three-day right to cancel, and lenders must offer refinancing if the borrower cannot repay at maturity without selling the property. If a borrower successfully disputes an agreement provision, the lender will cover their attorney fees. The bill also mandates that security interests clearly state the maximum borrower payment and requires borrowers to undergo homeownership counseling from HUD-certified or state-authorized counselors who have received specific loan documentation before the agreement is finalized. Finally, lenders must provide borrowers with direct access to a representative to answer questions at the time of consummation.

Business and Industry

Banking Committee (Joint)

https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=HB05209&which_year=2026