House Bill No. 5317 aims to define "mortgage loan" specifically for the purpose of certain notice provisions related to flood damage and insurance. The bill modifies Section 49-7b of the general statutes by repealing the existing language and substituting it with new definitions. The new definition states that a "mortgage loan" is a loan secured by a first mortgage on one-to-four-family residential real property located in the state and made for the purpose of financing the purchase of such property. This change narrows the scope of mortgage loans that require specific flood insurance notifications.

Additionally, the bill stipulates that creditors must provide a written notice to mortgage loan applicants at least ten days before closing, informing them that standard homeowners insurance does not cover flood damage, that flood damage can occur regardless of the property's location in a flood zone, and that the applicant may wish to consult an insurance professional regarding flood insurance. The notice must be written in plain language and signed by the applicant to acknowledge receipt. The bill is set to take effect on July 1, 2026, and does not impose any fiscal impact on the state or municipalities.