AN ACT ESTABLISHING VARIOUS REQUIREMENTS REGARDING SHARED APPRECIATION AGREEMENTS.

HB 5209 establishes rules for "shared appreciation agreements," a mortgage alternative where lenders receive a share of a property's value increase. It directly affects borrowers and lenders using these agreements by prohibiting unfair terms (e.g., occupancy requirements, prepayment penalties, or hidden fees) and mandating clear disclosures (Section 2(b)). Key mechanisms require lenders to calculate interest simply on the lump-sum payment at maturity (Section 2(a)), provide 90-day notice for borrower actions, and offer a 30-year fixed-rate refinance if borrowers can’t repay at maturity (Section 2(c)(8)). The bill also ensures borrowers get credit for property improvements and access to independent appraisals, with lenders covering borrower legal fees if they win disputes (Section 2(c)(9)). These changes take effect October 1, 2026.