Governor Healey and MassHousing Launch Affordable ADU Financing for Massachusetts Residents
Second mortgages of up to $250,000 will help homeowners add an additional unit to their home
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| Housing Undersecretary Nikko Mendoza （Middle, by Chutze chou) |
“Expanding housing options for Massachusetts residents is one of our administration’s top priorities, and accessory dwelling units are one of the most practical ways to create housing and drive down costs in communities across our state,” said Governor Maura Healey. “We made ADUs legal statewide through the Affordable Homes Act, and now we’re partnering with MassHousing to help more homeowners actually build them. This program will
“Homeowners want a clear, affordable path to build an ADU, and financing is often the biggest hurdle,” said Lieutenant Governor Kim Driscoll. “By offering fixed-rate second mortgages of up to $250,000 through trusted community lenders, we're helping more families move from plans and permits to construction. ADUs can support multigenerational living, help seniors stay close to family and create new rental opportunities in communities statewide.”
“Our goal is to make ADUs a real option for more homeowners, not just those with significant equity,” said Jennifer Maddox, Interim Secretary of Housing and Livable Communities. “By expanding access to affordable financing, we’re helping more residents take advantage of the new law to expand their housing options for themselves, family members or renters.”
“MassHousing is proud to support the Healey-Driscoll Administration’s efforts to bring accessible, affordable ADU financing within reach of homeowners of all means, in all regions of our state,” said MassHousing CEO Chrystal Kornegay. “Accessory dwelling units give homeowners the flexibility to meet their housing needs by creating an additional housing unit on their property for intergenerational family housing, or to create rental income. ADU construction empowers homeowners to help expand the state’s housing stock, and MassHousing’s new ADU loan program will help ensure that ADUs are within reach of moderate-income homeowners.”
“MassHousing’s new ADU loan program serves the needs of moderate-income Massachusetts families, by providing a fixed-rate second mortgage product at a lower interest rate and higher combined loan to value limits than are currently available through a home equity line of credit,” said Mounzer Aylouche, Vice President of Homeownership Programs at MassHousing. “We thank our statewide network of community lenders for their work to quickly stand up this new program, and we are excited to begin helping local families construct new housing units.”
Accessory dwelling units are small residential living spaces that are located on the same lot as another home. The Healey-Driscoll Administration’s Affordable Homes Act removed a significant obstacle to ADU construction by legalizing the construction of ADUs in single-family zoning districts statewide. The Administration’s action on ADUs created a simple and effective tool for increasing housing production statewide and lowering housing costs.
In December, Governor Healey launched a new campaign to accelerate ADU construction across Massachusetts. The governor announced a new ADU design challenge that will help bring replicable, no-cost ADU designs to consumers and communities; a $10 million technical assistance program, administered by the Massachusetts Housing Partnership (MHP), to accelerate predevelopment activities related to ADU construction; and new ADU financing through MassHousing.
Today’s announcement advances the Governor’s ADU campaign by bringing flexible, affordable ADU construction financing to homeowners throughout Massachusetts.
The MassHousing ADU loan supports new ADU construction, either within the envelope of an existing home or elsewhere on a homeowner’s lot. The loan is a fixed-rate second mortgage product that finances construction costs up to $250,000 for detached accessory dwelling units, and up to $150,000 for attached accessory dwelling units.
The program is structured to allow qualified Massachusetts homeowners to maximize their borrowing power, without burdening them with excessive debt. The product will be structured as an interest-bearing loan amortizing over a period of 20 years, matched with additional funding offered at zero percent interest and deferred repayment terms. This creative loan structure lowers the effective interest rates for borrowers and allows consumers to access greater overall loan amounts. MassHousing will offer ADU loans to qualified homeowners at an interest rate of 5.25%.
Eligible applicants will meet MassHousing’s statutory income limits of up to 135 percent of the area median income (ranging from $205,335 for a household living in eastern Massachusetts, to $165,345 in Worcester County, to $129,870 in Hampden County) and meet other loan underwriting criteria.
MassHousing’s new ADU loan product is intended to act strictly as construction-to-permanent financing. It will serve homeowners who have designs and permits for their ADU in hand.
MassHousing anticipates that potential borrowers may access MHP technical assistance funding to accomplish predevelopment activities, including design and permitting, then apply for MassHousing financing when they are ready to finance construction of their ADU.
Homeowners should apply for MassHousing ADU financing after they have secured local permits and are ready to move forward with construction. Interested homeowners can learn more about the program and connect with participating lenders by visiting masshousing.com/adu.
Since taking office, Governor Healey has focused on expanding pathways to homeownership, increasing housing production and lowering costs. Her administration has advanced new efforts to help first-time homebuyers, including expanding down payment assistance and lowering mortgage rates to make it easier for Massachusetts residents to buy their first home. At the same time, to build more homes, she has taken action to speed up the permitting process, turn state land into thousands of new homes, convert downtown commercial space into apartments and create a first-in-the-nation fund to finance mixed-income development in a time of high interest rates. She also legalized accessory dwelling unts. To help people afford their mortgages and rents right now, she banned mandatory renter-paid broker fees, gave seniors up to $2,800 a year to help with housing costs, and expanded home inspection protections.
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