Bill
S 705
Mass. creates Chapter 255G to license and oversee shared-equity home investments, boosting transparency for homeowners and setting standard costs and terms.
Note: the bill metadata you provided contains some inconsistent items (a different short title about medical pricing and a sponsors list that appears to include legislators from other states). This summary is based on the text of the bill that was included, which creates a new Massachusetts General Laws chapter titled "Chapter 255G — Shared Equity Investments" (Senate No. 705 / Senate Docket No. 862). The available excerpt runs through definitions and the license requirement (the full bill is longer — 23 pages — but only the early sections were supplied).
Summary — An Act relative to home investments (Chapter 255G: Shared Equity Investments)
Purpose
- To regulate “shared equity investments” in residential property by defining the product, establishing licensing and supervisory authority, setting standardized definitions and calculation methods for cost and equity measures, and exempting certain actors. The bill brings shared-equity home financing arrangements under state oversight to increase transparency and consumer protection.
Key provisions (from the provided text)
- New statutory chapter: inserts Chapter 255G into the Massachusetts General Laws titled “Shared Equity Investments.”
- Definitions: detailed, operative definitions for terms including:
- “Shared equity investment” — a non-recourse transaction where an investor grants a sum to a homeowner in exchange for an equity interest or future contingent payoff; explicitly distinguished from mortgages/loans.
- “Shared equity investor,” “homeowner,” “investment amount,” “settlement payment,” “agreed home value,” “senior secured debt,” “beginning home equity,” “annualized cost,” “term days,” “shared equity investment application,” “shared equity investment holder,” “multi-state licensing system,” and “instrumentality created by the United States or any state.”
- Standardized calculations:
- Annualized cost formula: (((settlement payment / investment amount)^(365 / term days)) - 1) — yields an annualized percentage cost of the shared equity investment.
- Beginning home equity formula: 1 - ((senior secured debt + investment amount) / agreed home value).
- Licensing requirement:
- No person may act as a shared equity investor for residential property in the Commonwealth without a license issued by the Commissioner (the Massachusetts Commissioner of Banks).
- Exemptions:
- Employees/agents acting under a licensed investor need not be separately licensed.
- Small-volume investors (making 12 or fewer shared equity investments in any 12-month period) are exempt.
- Certain banks, federally-chartered institutions, and specified instrumentalities (public/quasi-public/nonprofit entities operating under public contracts or using public funds) are exempt (text truncated in supplied excerpt; further specifics likely in full bill).
Who would be affected
- Homeowners considering or using shared-equity financing for homes (owner-occupied or rental-in-part dwellings up to four units).
- Companies and individuals who make, solicit, or service shared equity investments — they must obtain state licensing unless exempt.
- Investors who passively hold these interests (termed “shared equity investment holders”) are separately defined; servicers must be licensed.
- State regulator: Commissioner of Banks would gain supervisory and licensing authority over this product.
- Exempt actors: small providers, certain banks and public instrumentalities, and employees of licensed investors.
Procedural status and timeline (from provided actions)
- Filed: January 15, 2025 (Senate Docket No. 862); introduced/read Feb 25, 2025.
- Referred to committee(s): Referred to the Committee on Health (status shows “REFERRED TO HEALTH”) and also references to the committee on Financial Services (multiple entries). Primary sponsor listed in the petition: Sen. John J. Cronin (Worcester and Middlesex).
- Hearings: multiple hearing entries scheduled/rescheduled for November 18, 2025 (committee hearing logistics noted).
- Current status (per supplied data): Referred to committee; hearing scheduled.
Potential impacts and issues to watch
- Consumer protection: licensing and standardized cost/equity metrics could improve transparency and comparison across providers, helping homeowners evaluate shared-equity offers.
- Regulatory compliance: companies offering shared-equity products likely will face licensing costs, reporting obligations, and supervisory oversight; small-volume providers and certain public/nonprofit programs may be exempt.
- Market effects: may constrain or formalize an expanding alternative home-financing market (home equity sharing), potentially affecting product availability, pricing, and investor business models.
- Interjurisdictional coordination: inclusion of a “multi‑state licensing system” definition suggests the bill contemplates interstate regulatory cooperation.
Limitations of this summary
- The supplied bill text was truncated after the beginning of Section 2; later sections (consumer disclosures, filing/licensing procedures, prohibited acts, penalties, recordkeeping, required contract terms, or other substantive rules) were not included and may contain material provisions. Review of the full 23‑page bill is recommended for complete details.
Compiled from official sources — confirm details with the bill’s official record.
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