Substitute Bill No. 284 Summary

• Establishes a security deposit loan assistance program effective July 1, 2024, administered by the Commissioner of Housing that guarantees repayment of 25% of outstanding principal on security deposit loans made by eligible financial institutions to qualified renters.

• Eligible renters must be state residents applying to rent residential property, with proposed rent not exceeding 35% of household income, and be members of low-income households, veterans, victims of domestic violence, or recent college graduates.

• Loan limits cap principal at one month's rent with interest rates not exceeding 4% per annum, 12-24 equal monthly installments over 24 months maximum, and direct payment to landlords; financial institutions cannot use creditworthiness or debt-to-income ratios in underwriting decisions.

• Requires eligible renters to pay a $50 maximum application fee, participate in financial literacy classes, and have access to credit counseling and rental payment reporting services; landlords receiving deposits must not have histories of frivolous housing claims.

• Modifies Connecticut income tax law effective January 1, 2025, to exclude interest deferred or not charged to eligible renters in connection with security deposit loans from taxable income.