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- Building backyard tiny homes can be expensive. The units cost from under $100,000 to over $300,000.
- There are three states that will help with the cost, by providing homeowners with grant money.
- Here are the programs, how much homeowners can receive, and who is eligible to apply.
If you've looked into building a tiny home in your backyard, turning your garage into an apartment, or transforming your basement into an extra housing unit you've probably discovered what many have: it can be expensive.
These backyard homes, called accessory dwelling units, or ADUs, are small housing units that homeowners can build on their property. They can range from 150 square feet to about 1,200 square feet, depending on where you live.
The cost of the unit itself can run from around $100,000 to $300,000. Then there's also the cost of the permit. In California, where most backyard homes are being built, ADU building permits cost anywhere from $450 to $15,000 — even before construction starts, according to Backyard Unlimited, a company that builds ADUs. There could be other costs too, like site preparation, which includes anything from inspections to running utility lines. Also, it can be hard to get a loan to build an ADU.
All this to say, if you don't have cash lying around or the ability to access financing for the project, it can be cost prohibitive — making it harder for middle- and low-income homeowners to actually build one, studies have shown.
To combat this disparity, promote equity, and ultimately propel the construction of much-needed housing, some states — and nonprofits in some cities — have created grant programs to help.
Insider reached out to all 50 states to learn which pay homeowners to build ADUs. Here are the programs we found.
California: Up to $40,000 per grantee
While funds have been allocated for this year, the details of the program itself have not yet rolled out. In past iterations of this program, the state provided $40,000 to Californians to use on pre-construction ADU costs — such as the cost of designing the unit, permitting the unit, or getting a soil inspection.
Courtesy of Abodu
Who can apply: Californians that fall in the range of low- to moderate-income limits
Total funding available: $50 million
When are applications open: to be determined
Agency or Department in charge of distribution: California Housing Finance Agency
Source: California Housing Finance Agency
New York: Up to $125,000 per grantee
This program allows low- to moderate-income New Yorkers to receive up to $125,000 to build an ADU or bring an existing ADU up to code.
Kelsey Neubauer/Insider
Who can apply: Any homeowner that makes at or below 100% of the area median income. In New York City, for example, this would mean a three-person household would have to make $127,100 or less to qualify. Upstate, the AMI tends to be much less, so the barrier for applicants is lower. In Onondaga County, where Syracuse is located, a three-person household would have to make $71,600 or less per year to qualify.
Total funding available: $85 million over the next five years
When are applications open: The next round of funding will be announced in the coming months
Agency or Department in charge of distribution: New York State's Homes and Community Renewal
Source: New York State Homes and Community Renewal
Vermont: Up to $50,000 per grantee
This program allows Vermonters to receive up to $50,000 to build an ADU on their property. Both landlords and owner-occupied homes with plans to rent are eligible. Those who receive a grant must abide by certain stipulations, such as complying with local ordinances, maintaining HUD Fair Market rent, matching at least 20% of the grant funds, and completing the project within 18 months of signing the grant agreement.
Kelsey Neubauer/Insider
Who can apply: Any Vermont homeowner can apply through these five regional organizations: RuralEdge, Champlain Housing Trust, NeighborWorks of Western Vermont, Downstreet Housing and Community Development, Windham and Windsor Housing Trust. Application review and project oversight is conducted through these organizations.
Total funding available: $15 million
When are applications open: Open now, on a rolling basis
Agency or Department in charge of distribution: Vermont Housing Improvement Program
Source: Department of Housing and Community Development
from All Content from Business Insider https://www.businessinsider.com/states-will-compensate-you-for-building-tiny-home-adu-2023-8
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