The proposed legislation, General Assembly Raised Bill No. 1363, aims to establish a pilot program administered by the Connecticut Housing Finance Authority (CHFA) to assist certain mortgage borrowers who have unpaid student loan debt. Effective July 1, 2025, the program will allow eligible mortgage holders to receive a reduction in their mortgage interest rate by 1.125 percent. The CHFA is tasked with developing guidelines for the program, which will include eligibility requirements and other necessary criteria.

To qualify for this program, borrowers must be first-time homebuyers or individuals who have not owned a home in the past three years, unless they are purchasing in a targeted area as defined by federal tax code. Additionally, they must meet specific income guidelines, have a combined student loan debt with a minimum unpaid principal balance of $15,000, and ensure that their loans are in good standing. The bill emphasizes the importance of providing support to borrowers with student loan debt, thereby facilitating homeownership opportunities for this demographic.