AN ACT DEFINING "MORTGAGE LOAN" FOR PURPOSES OF CERTAIN NOTICE PROVISIONS RELATING TO FLOOD DAMAGE AND INSURANCE.

This bill defines "mortgage loan" as a loan secured by a first mortgage on one-to-four-family residential property in the state, used to purchase that property. It directly affects mortgage lenders and homebuyers by requiring lenders to provide specific written notices at least 10 days before closing. The notice must explain that standard homeowners insurance doesn’t cover flood damage, floods can occur anywhere (even outside designated zones), and buyers should consider flood insurance. Lenders must use plain language, have buyers sign for receipt, and keep copies in records. The law takes effect July 1, 2026.