SECURITY DEPOSIT LOAN ASSISTANCE LEGISLATION INTRODUCED BY SENATOR MARONEY MOVES TO SENATE FLOOR

This month, the General Assembly’s Banking Committee voted to advance legislation creating a loan assistance program for security deposits, moving the bill introduced by State Senator James Maroney (D-Milford) one step closer to becoming law. The bill will require the Commissioner of Housing to establish a security deposit loan assistance program and authorize a tax deduction for related interest to those loans if passed.

“We all need a place to live, especially as Connecticut’s housing crunch tightens further,” said Sen. Maroney. “There are any number of people who need to move for career opportunities, family or life changes and may struggle to meet the needs of a security deposit, especially if they’re undergoing financial strain. This loan program can make sure people can get the housing they need with our state supporting them in what can be a challenging or complicated time. I hope to see it continue to advance.”

Senate Bill 284, “An Act Concerning A Security Deposit Loan Assistance Program,” as drafted would see the security deposit loan assistance program support renters seeking to rent property who are members of low-income households, veterans, victims of domestic violence or recent college graduates. All of those demographics may struggle to meet the requirements of a security deposit due to financial constraints or immediate need for housing. The renter also would need income where the rent is not more than 35% of their monthly income.

The loans made would be charged with a maximum 4% interest and would require repayment within one to two years of being made. Funds would be paid directly to landlords and renters utilizing the program would be connected with other state resources if needed.

In the bill, a tax deduction would also be authorized for interest deferred by or not charged to eligible renters in connection with security deposit loans issued under the program.

The bill passed the Banking Committee on March 12 by an 11-1 vote. It now heads to the Senate floor.