NY A05597

Defines "community land mortgage" as a first lien on a leasehold estate where a not-for-profit housing company retains title to the land while low or moderate-income buyers purchase improvements and execute long-term leases.

Authorizes the state mortgage agency to purchase community land mortgages from banks during periods of inadequate credit supply or when carrying charges exceed financial means of low and moderate-income persons and families.

Requires banks to certify that each mortgaged property is sold to an individual borrower and represents additional mortgages beyond what the bank would normally make, with agency approval of ground leases containing resale restrictions.

Permits the agency to set interest rates on purchased mortgages without regard to usury limits to ensure sufficient revenue for bond and note payments, and allows resale provisions in leases that terminate upon foreclosure.

Establishes bank representations and warranties regarding mortgage validity, borrower default status, and insurance requirements, with banks liable for damages and required to repurchase mortgages if representations prove untrue; takes effect 120 days after enactment.