The Healey-Driscoll Administration, in partnership with MassHousing, has officially launched a new statewide accessory dwelling unit (ADU) loan program, making it easier for homeowners to finance the construction of additional housing units on their properties.
Eligible Massachusetts homeowners can now apply for fixed-rate second mortgages to support ADU construction, including:
- Up to $250,000 for detached ADUs
- Up to $150,000 for attached ADUs
- A fixed interest rate of 5.25%
- A 20-year amortization period
The program also includes additional funding at 0% interest with deferred repayment, helping reduce the effective borrowing cost and increasing affordability.
To be eligible, homeowners must:
- Own a single-family home, which they occupy as their primary residence
- Meet income limits up to 135% of area median income
- Meet standard underwriting criteria
- Have designs and local permits already secured
This is a construction-to-permanent financing program, meaning homeowners should be ready to move forward with building. It is specifically structured to maximize borrowing power without creating excessive debt, making ADUs more accessible across a wider range of households.
How It Fits into the Bigger Picture
This loan program is part of a broader statewide effort to accelerate ADU development, including:
- A design challenge to provide no-cost, replicable ADU plans
- A $10 million technical assistance program through the Massachusetts Housing Partnership (MHP)
- Expanded support for predevelopment activities like design and permitting
Homeowners may use MHP resources to get started, then transition into MassHousing financing when ready to build.
Homeowners can explore program details and connect with participating lenders at: masshousing.com/adu. With ADUs now legal statewide and financing more accessible than ever, this program represents a significant step forward in expanding housing options across Massachusetts—and a valuable opportunity for REALTORS® to guide clients through new possibilities.