Establishes guidelines for creditworthiness determinations concerning affordable housing programs.

S219 2R

[Second Reprint]

SENATE, No. 219

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator SHIRLEY K. TURNER

District 15 (Hunterdon and Mercer)

Senator� BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

Co-Sponsored by:

Senators Burgess, Stack, Cryan, McKnight and Ruiz

SYNOPSIS

���� Establishes guidelines for creditworthiness
determinations concerning affordable housing programs.

CURRENT VERSION OF TEXT

���� As amended by the Senate on March 23, 2026.

��

An Act
establishing creditworthiness analysis guidelines for
affordable housing and supplementing P.L.1945, c.169 (C.10:5-1 et seq.).

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� The Legislature finds
and declares that:

���� a.���� The current shortage of
affordable housing in this State has forced many low and moderate income New
Jersey residents to live in market rate housing they cannot afford but must
occupy rather than face homelessness.�

���� b.��� After paying rent, these
struggling families and individuals are frequently left with less money than
needed to meet other basic household obligations.� Late or partial payments, as
well as missed payments made up in subsequent months, are often the result.

���� c.���� These undesirable but
unavoidable decisions negatively affect many households� credit reports and
inevitably lead to lower-credit scores for these New Jersey residents.�

���� d.��� Access to housing with
affordable rents would remedy a major cause of the financial difficulties
experienced by lower-income persons, leave them with more income to meet their
basic expenses, and help them to restore their credit standing.

���� e.���� Those households
fortunate enough to obtain tenant-based housing subsidies, or access to
cost-controlled housing units, generally after years spent on waiting lists,
are often rejected by landlords based upon inadequate credit assessments.

���� f.���� These credit
assessments overlook the totality of the circumstances that confronted the
particular family or individual in question, fail to recognize that the credit
issues are generated by the very problem that affordable housing would resolve,
disregard the limited choices available to affected households, and discount
their best efforts to deal with those challenges.�

���� g.��� Available reports,
studies and data demonstrate that, because of past and present discriminatory
practices, and the persistence of structural and intentional racism,
unregulated and unlimited use of tenant screening criteria, including those
such as credit scores and reports, and other forms of credit analysis, have disparately
impacted African-Americans, other people of color, the disabled, and other
protected classes, and have also been used as a pretext to accomplish otherwise
prohibited discrimination against members of those classes.

���� h.��� It is in the interest of
the public to ensure that low- and moderate-income persons are not unfairly
denied the opportunity to obtain housing they can afford and desperately need.�

���� i.���� It is also in the
public interest to establish, in relation to housing subsidy and affordable
housing programs, fair and just standards and guidelines for credit evaluation
and the use of credit scores, credit reports, and related assessments of
creditworthiness or fitness to be a tenant.

���� 2.��� For the purposes of
P.L.����� , c.���� (C.���� ) (pending before the Legislature as this bill):

����� �Ability
to pay rent� means:

����� a.�� for
federal, State or local voucher holders, or applicants for project-based deep
subsidy units, that the gross monthly household income of the affordable
housing applicant is equal to or exceeds 2.5 times the share or portion of the
total monthly rent that the tenant shall be required to pay; multipliers based
upon the total rent for the dwelling unit, including both the tenant�s share of
the rent and the subsidized portion of the rent, shall not be permitted; and

����� b.�� for
all other dwelling units limited to occupancy by low or moderate income
households, that the gross monthly household income of the affordable housing
applicant is equal to or exceeds 2 times the amount of the monthly rent the
household will be required to pay; provided, however, that the required amount
of income needed if the applicant is certified as income eligible for a
particular dwelling unit pursuant to the applicable provisions of the Uniform Housing
Affordability Controls promulgated by the New Jersey Housing and Mortgage
Finance Agency

shall be in accordance
with those provisions, or, in the case of an applicant with a disability, shall
be the amount required in order to provide a reasonable accommodation pursuant
to the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et
seq.), the federal "Fair Housing Amendments Act of 1988," (42 U.S.C.
s.3601 et seq.) or other applicable statute or regulation.

����� �Affordable
housing applicant� means a low or moderate income household that possesses a
State or federal tenant-based housing subsidy; or a household that applies to
lease any rental dwelling unit that is restricted to occupancy by low or
moderate income households pursuant to any State or federal affordable housing
or subsidy program, including but not limited to the "Fair Housing Act,"
P.L.1985, c.222 (C.52:27D-301 et al.), and any low or moderate income housing
mandated pursuant to a court order or settlement.�

����� �Credit
or other risk score or assessment� means a number or other form of rating that
is derived from an algorithm, computer application, model, or other process
that is based in whole or in part on credit information, court records or
similar data, and which purports to characterize or categorize a person�s
creditworthiness, fitness to be a tenant, or other position or status.� The
term includes but is not limited to FICO or other credit scores, tenant scores,
insurance scores or other enumerations.� The term also includes the use of
generic events or occurrences, such as a filing or discharge in bankruptcy, or
being a named party in a court proceeding, as justification for denying a
person credit or admission to an apartment or other rental dwelling.

����� �Creditworthiness�
means the determination of a landlord or creditor, in accordance with section 4
or 5 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this
bill), with regard to a prospective tenant�s fitness to be a tenant or resident
of a particular housing complex or dwelling unit.

����� �Deep
rental subsidy� means a State or federal tenant-based housing subsidy, or State
or federal project-based housing subsidy, which limits the tenant�s share of
the rental payment to a percentage of the tenant�s income, and which can be
adjusted to maintain that percentage should the tenant�s income change.�

����� �Low
or moderate income household� means a household meeting the applicable State or
federal definition of such households for the particular housing program or
housing units in question.

���� �State
or federal tenant-based housing subsidy� means a tenant-based subsidy, enabled
pursuant to a State or federal tenant-based housing program available to low or
moderate income households, including but not limited to section 3 of P.L.2004,
c.140 (C.52:27D-287.3), commonly known as the State rental assistance program,
or the federal Housing Choice Voucher (Section 8) Program.

���� 3.���
On or after the effective date of P.L.��� , c.��� (C.������ ) (pending
before the Legislature as this bill), a credit or other risk score or
assessment calculated or disseminated by any entity shall not be used in any
manner to evaluate the creditworthiness of an affordable housing applicant.� A
creditworthiness evaluation of an affordable housing applicant shall involve an
individualized assessment conducted in accordance with the applicable
provisions of sections 4 or 5 of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill)
.

���� 4.��� a.� A rental housing
application submitted by an affordable housing applicant with a tenant-based
deep rental subsidy, or for a dwelling unit with a project-based deep rental
subsidy, shall not be denied based on an assertion of lack of creditworthiness
if the applicant has the ability to pay rent.

����� b.�� Notwithstanding the
provisions of subsection a. of this section, an applicant so described may be
rejected for lack of creditworthiness if, within the previous three years, and
while in receipt of a tenant-based deep rental subsidy, or while residing in a
dwelling unit with a project-based deep rental subsidy, the applicant failed on
two or more occasions to pay the unsubsidized tenant share of the monthly rent
in accordance with the rental agreement; provided, however, that, prior to
making the decision to deny such an applicant, the landlord shall conduct an
individualized assessment of the specific facts and circumstances surrounding
the failures to pay.� The individualized assessment shall include, but shall
not be limited to, factors such as any disputes regarding the amounts of rent
due, the accuracy of the calculations determining the tenant�s share of the
rent, and other relevant factors as they may be present.� If the applicant had
a bona fide reason for the failures to pay and subsequently paid all outstanding
amounts owed as the tenant�s share, then the applicant shall not be denied
based on a lack of creditworthiness.

���� c.� Rent discharged in a
bankruptcy proceeding shall not be considered unpaid for the purposes of this
section.

���� 5.��� a.� For all situations
not covered by section 4 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill), and unless standards more favorable to the applicant
are mandated by other federal or State laws or regulations, a landlord proposing
to evaluate the creditworthiness of an affordable housing applicant who has
demonstrated an ability to pay rent, shall conduct an individualized assessment
of the applicant�s income, employment, and payment history.� The individualized
assessment shall include, at a minimum, an evaluation of the following factors:
employment history and wage history, especially the amount of household income
in relation to the cost of living in the region; rent or mortgage and utility
payment history;
2
[
1
proof
of
1

health
]
2

1
[
history
]

2
[
insurance
coverage
1
,
including
]
2

1
[
any
]

2
[
proof of
1
health
]
2

1
[
issues
affecting
]

2
[
insurance
coverage for all
1

other members of the applicant household;
]
2

the need for a reasonable accommodation in the case of a household which
includes a person with a disability;
2
any
significant or extraordinary circumstances that have affected the household�s
income or expenses, including, but not limited to, emergencies or other factors
that have significantly affected the household�s ability to meet its financial
obligations;
2

and the extent to which the household developed a budget or payment plan that
enabled it to meet most of its expenses most of the time, keeping payments of
expenses as close to current as was reasonably possible, and considering the
occurrence of unanticipated problems, and emergencies or other factors that
significantly affected the household's ability to adhere to any such budget.

���� b.��� Notwithstanding any
provision of subsection a. of this section to the contrary, for the purposes of
evaluating the creditworthiness of an affordable housing applicant, there shall
be a rebuttable presumption that an applicant household is creditworthy if: (1)
the applicant household has demonstrated an ability to pay rent; (2) a member
or members of the household has a history of regular employment or has been in
receipt of another source of regular income; and (3) despite a household income
that has been, for a period of time, below the self-sufficiency level as that
term is defined under section 3 of P.L.1992, c.43 (C.34:15D-3) or was otherwise
inadequate to meet its basic needs, the household made a good faith effort to
meet its regular rent or mortgage obligations and other household expenses, and
was able to do so most of the time.

���� c.���� Notwithstanding any
provision of subsection a. of this section to the contrary, an affordable
housing applicant who has completed a credit counseling or debt management
course certified by the Department of Community Affairs shall be presumed
creditworthy, provided that the applicant household has demonstrated an ability
to pay the rent.� A presumption of creditworthiness based upon the provisions
of this subsection shall only be available on one occasion to any affordable
housing applicant.

���� 6.� If a landlord denies a
rental housing application from an affordable housing applicant, approves an
application with conditions that exceed reasonable conditions routinely imposed
upon a prospective tenant, or takes any other adverse action on an affordable
housing applicant�s rental housing application, the landlord shall provide a
written notice of the adverse action to the applicant that states the reasons
for the adverse action.�
The adverse action
notice shall disclose any screening information about the affordable housing applicant
accessed by the landlord, and shall append any screening report about the
applicant that was accessed by the landlord.� The adverse action notice shall
be provided in a substantially similar format as set forth in this section,
unless an alternative format is established pursuant to rules and regulations
of the Attorney General.� The adverse action notice shall include specific
written findings as to each of the factors that landlords are required to
consider as part of the individualized assessment.� An adverse action notice
that does not include a specific finding as to each factor or that does not
consider the facts and circumstances relevant to the particular affordable
housing applicant shall be deemed presumptively invalid and shall not
constitute a lawful basis upon which to take adverse action against an
applicant.� All written notices required herein, including but not limited to
the adverse action notice, shall be printed in both the English and Spanish
languages and given to the affordable housing applicants.� In any county in
which the Language Access Plan of the Department of Community of Affairs
indicates that five percent or more of the residents� primary language is any
language other than English or Spanish, all written notices in that county
shall also be printed in that additional language.

ADVERSE
ACTION NOTICE

Name

Address

City/State/Zip Code

This notice is to inform you that
your application has been:

..... Rejected

..... Approved, subject to the
following conditions:

_______________________________________________________

Adverse action on your application
was based, in part, on the following:

.....Information contained in a
consumer report (The prospective landlord shall include the name, address, and
phone number of the consumer reporting agency that furnished the consumer
report that contributed to the adverse action.)

..... Information received from
previous rental history or reference

..... Information received in a
criminal record

..... Information received in a
court filing or other court record

..... Information received from an
employment verification

..... Other

The following is (are) the name(s),
address(es), and phone number(s) of each of the consumer reporting agencies, or
other agencies or entities, that furnished the reports or information referred
to above:

_______________________________________________________

Your application was not accepted,
or was approved with the additional conditions described above, for the
following reasons (include specific facts and circumstances relevant to the
particular applicant in relation to each of the enumerated factors that the
owner/landlord is required to consider as part of an individualized assessment,
as well as any other stated screening criteria):�
_______________________________________________________

Dated this ..... �day of ........,
.... (year)

Agent/Owner Signature"

���� 7.���
Each landlord that denies, or takes any adverse action
against, any affordable housing applicant for creditworthiness reasons shall be
required to submit to the Attorney General, on an annual basis, a report that
contains the following information for the preceding 12-month reporting period:

���� a.���� the number of applications for affordable housing
reviewed over the preceding 12-month reporting period;

���� b.��� the number of denials of applications for
housing rendered on the basis of creditworthiness reasons;

���� c.���� the number of denials to which the affordable
housing applicant filed a complaint in Superior Court;

���� d.��� the number of denials that were overturned or found
unlawful in Superior Court; and

���� e.���� the information required under subsections a.
through d. disaggregated by the race of the applicant, the ethnicity of the
applicant, the sex of the applicant, and whether the applicant had a
disability.

���� 8.��� a.� In addition to the
types of discrimination set forth in subsections g., h., i., j., l., and m. of
section 11 of P.L.1945, c.169 (C.10:5-12), it shall constitute unlawful
discrimination for a landlord to use a credit or other risk score or
assessment, calculated or disseminated by any entity in any manner, to evaluate
the creditworthiness of an affordable housing applicant in a way that violates
the provisions of P.L.��� , c.��� (C.����� ��) (pending before the Legislature
as this bill).

���� b.� A person claiming to be
aggrieved pursuant to P.L.,��� c.��� (C. )
(pending before the Legislature as this bill) may file a complaint or action
with the Division on Civil Rights in the Department of Law and Public Safety,
or in the Superior Court of New Jersey, alleging a violation of the �Law
Against Discrimination,� P.L.1945, c.169 (C.10:5-1 et seq.).

���� c.� Following the receipt of a
complaint the Director of the Division on Civil Rights in the Department of Law
and Public Safety shall be authorized to prohibit the landlord from renting out
the housing unit that the claimant applied for, pending the investigation of
the claim.�

����
2
d.�
The provisions of P.L.,��� c.��� (C.������� ) (pending before the Legislature
as this bill) shall not be construed to impose a duty on a person licensed by
the New Jersey Real Estate Commission pursuant to R.S.45:15-1 et seq. during a
transaction for which the licensee is not the landlord.
2

����
9.��� The Attorney General,
in accordance with
the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), and
in consultation with the Commissioner of Community Affairs, shall adopt rules
and regulations to effectuate
P.L.��� , c.��� (C.����� ) (pending before
the Legislature as this bill) on or before the effective date of P.L.��� ,
c.��� (C.����� ) (pending before the Legislature as this bill)
.� The rules and regulations adopted by the Attorney
General may restrict the application of the provisions of
P.L.��� ,
c.��� (C.����� ) (pending before the Legislature as this bill), if necessary
to comply with federal law.

���� 10.� This act shall take
effect on the first day of the third month next following enactment.