Massachusetts House Bill H1106

Massachusetts 2025-2026 Regular Session

• Introduced: 2/27/25
• Refer: 2/27/25

Caption

Relative to home investments

Impact

The bill is anticipated to significantly impact the home financing landscape, particularly for low to moderate-income homeowners seeking alternative funding mechanisms. By formally recognizing shared equity investments, H1106 provides a structured approach for homeowners and investors alike, rather than leaving such dealings in a gray area of regulation. This change is poised to enhance access to homeownership while balancing the interests of investors and ensuring that homeowners are adequately informed about the risks and costs associated with these investments.

Summary

H1106, titled 'An Act relative to home investments,' seeks to establish a framework for shared equity investments in residential properties within Massachusetts. This legislation introduces a new chapter in the General Laws pertaining to the licensing and regulation of shared equity investors, mandates disclosures to homeowners, and defines key terms relevant to shared equity transactions. One notable provision includes the stipulation that the annualized cost of such investments shall not exceed 20%, aimed at protecting homeowners from excessive financial burdens. Additionally, the bill introduces mechanisms for homeowner recourse and sets standards for valuation and appraisal reports to uphold industry practices.

Contention

Despite its intended benefits, H1106 may encounter opposition from parties concerned about its regulatory framework. Critics may argue that the requirements for shared equity investments could stifle investment opportunities within the real estate market. Additionally, there may be apprehension about the potential control shared equity investors may exert over homeowners, particularly regarding sales of the property and settlement processes. The balance between enabling homeowner investment options and protecting homeowners' rights and interests will likely be a focal point of debate as the bill moves through legislative scrutiny.