HB05317 • 2026

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

Labor

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Banking Committee
Last action: 2026-03-23
Official status: File Number 111
Effective date: Not listed

Plain English Breakdown

The official source confirms the effective date is July 1, 2026, but the metadata section in the prompt left this field blank; the summary reflects the confirmed date from the bill text.

Defining Mortgage Loans for Flood Insurance Notices

This law changes the rules so that lenders must give flood insurance warnings only when a loan is used to buy one-to-four family homes secured by a first mortgage.

What This Bill Does

Defines 'mortgage loan' as a loan secured by a first mortgage on one-to-four-family residential property in this state made for purchasing that property.
Requires lenders to give written flood insurance notices only when the loan fits the new definition of a purchase-money mortgage.
Mandates that the notice be given at least ten days before the closing date of the transaction.
States that standard homeowners' policies do not cover flood damage and related losses, and that floods can happen outside designated zones.
Requires applicants to sign and date the notice to acknowledge receipt, while lenders must keep a copy in their records.

Who It Names or Affects

Creditors such as state or federal banks, credit unions, mortgage lenders, correspondent lenders, or other financial institutions operating in this state.
Applicants seeking loans specifically to purchase one-to-four-family residential properties secured by a first mortgage.
Licensed insurance producers or surplus lines brokers who may be consulted about flood coverage.

Terms To Know

Creditor: A state or federal bank, credit union, mortgage lender, correspondent lender, or other financial institution that lends money for a mortgage.
First Mortgage: The primary loan used to buy a property where the lender has the first claim on the home if payments stop.
Surplus Lines Broker: An insurance professional who helps find coverage for risks that standard insurers may not cover, such as flood damage.

Limits and Unknowns

The law does not require lenders to give these specific notices if the loan is used for refinancing or buying properties with more than four units.
The text does not specify penalties for lenders who fail to provide the notice correctly.

Bill History

2026-03-23 LCO
Reported Out of Legislative Commissioners' Office
2026-03-23 Connecticut General Assembly
Favorable Report, Tabled for the Calendar, House
2026-03-23 Connecticut General Assembly
House Calendar Number 105
2026-03-23 LCO
File Number 111
2026-03-16 LCO
Referred to Office of Legislative Research and Office of Fiscal Analysis 03/23/26 12:00 PM
2026-03-10 BA
Joint Favorable
2026-03-10 LCO
Filed with Legislative Commissioners' Office
2026-02-27 Connecticut General Assembly
Public Hearing 03/03
2026-02-26 Connecticut General Assembly
Referred to Joint Committee on Banking

Official Summary Text

To define "mortgage loan" for purposes of certain notice provisions relating to flood damage and insurance.

Current Bill Text

Read the full stored bill text

House of Representatives
HB5317 / File No. 111 1

General Assembly File No. 111
February Session, 2026 House Bill No. 5317

House of Representatives, March 23, 2026

The Committee on Banking reported through REP. DOUCETTE
of the 13th Dist., Chairperson of the Committee on the part of
the House, that the bill ought to pass.

AN ACT DEFINING "MORTGAGE LOAN" FOR PURPOSES OF
CERTAIN NOTICE PROVISIONS RELATING TO FLOOD DAMAGE
AND INSURANCE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Section 49-7b of the 2026 supplement to the general statutes 1
is repealed and the following is substituted in lieu thereof (Effective July 2
1, 2026): 3
(a) For purposes of this section, "mortgage loan" means a loan that is 4
(1) secured by a first mortgage on one -to-four-family residential real 5
property located in this state, and (2) made for the purpose of financing 6
the purchase of such property. 7
[(a)] (b) Not later than ten days prior to the date of the closing in a 8
mortgage loan transaction, each creditor, as defined in section 49 -6a, 9
shall notify the mortgage loan applicant, in writing, that: (1) Standard 10
homeowners insurance policies do not cover flood damage and related 11
losses; (2) flood damage to property may occur regardless of whether 12
HB5317 File No. 111

HB5317 / File No. 111 2

the real property is located in a designated flood zone; and (3) the 13
applicant may wish to consult a licensed insurance producer or surplus 14
lines broker concerning the availability and benefits of obtaining flood 15
insurance. 16
[(b)] (c) The notice required by subsection [(a)] (b) of this section shall 17
be written in plain language and signed and dated by the mortgage loan 18
applicant to acknowledge receipt of such notice. Each creditor shall keep 19
and maintain a copy of such notice with the mortgage loan applicant's 20
mortgage records. 21
This act shall take effect as follows and shall amend the following
sections:

Section 1 July 1, 2026 49-7b

BA Joint Favorable

HB5317 File No. 111

HB5317 / File No. 111 3

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: None
Municipal Impact: None
Explanation
The bill limits flood notice requirements to mortgage loan applicants
for only certain types of mortgages. This has no fiscal impact to the state
or municipalities as they are not parties to mortgage loans.

HB5317 File No. 111

HB5317 / File No. 111 4

OLR Bill Analysis
HB 5317

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

SUMMARY
This bill narrows the circumstances under which a creditor must give
a mortgage loan applicant a plain language notice about flood
insurance. Current law requires creditors to do so at least 10 days before
closing on any mortgage loan transaction. The bill limits this notice
requirement to apply only when the mortgage loan application is to
finance buying a one-to-four family residential real property that is
secured by a first mortgage.
Creditors subject to the law , unchanged by the bill, include state or
federal banks, credit unions, mortgage lenders, correspondent lenders,
or other financial institutions.
By law, unchanged by the bill, the written notice must state that (1)
standard homeowners ’ policies do not cover flood related losses, (2)
flood damage can happen regardless of whether the property is in a
designated flood zone, and (3) the applicant may want to consult an
insurance producer or surplus lines broker about flood insurance
availability and benefits.
EFFECTIVE DATE: July 1, 2026
COMMITTEE ACTION
Banking Committee
Joint Favorable
Yea 13 Nay 0 (03/10/2026)