Gov. Maura Healey, bottom right, Lt. Gov. Kim Driscoll, center, and state Housing Secretary Ed Augustus, rear right, tour an accessory dwelling unit in Lexington on Dec. 10, 2025. Photo by Sam Lattof | Banker & Tradesman Staff

Gov. Maura Healey and two of her top officials crowded into a Lexington accessory dwelling unit Wednesday morning to announce an ADU design contest and new “affordable” financing options for ADU construction.

Along with a design challenge and a new ADU construction financing product from the Massachusetts Housing Partnership, low- and moderate-income homeowners looking to build ADUs will also get an “affordable” financing option from MassHousing next year to help combat high construction costs.

“ADUs are an effective tool for increasing housing production and lowering costs across the state. They offer opportunities for people to age independently near their loved ones, people with disabilities to stay close to their parents, and young adults to start saving to buy a home,” Healey said at a press conference outside an ADU on Woodpark Circle in northwest Lexington. “We’re glad to see hundreds of people take steps to create ADUs thanks to the Affordable Homes Act, and this new campaign will help us build on this progress by making it easier to design, finance and build these homes. Together, we can increase the production of reasonably priced housing across the state and lower costs for everyone.”

In the first six months since ADUs became legal on single-family lots statewide, Healey’s office said that there have been 900 applications for ADU projects filed with towns and cities across Massachusetts.

Following its recent authorization of $20 million for “mission-oriented homeownership activities,” Healey said, MassHousing plans to utilize an unspecified portion of those funds to introduce affordable construction financing for low- and moderate-income homeowners beginning in 2026.

The quasi-public housing finance authority will make loans up to $250,000 for detached ADUs and up to $150,000 for attached ADUs.

“We want people who may be across a broad spectrum of income levels to be able to think about, ‘Hey, does this work for me?’ Not just folks who have higher incomes or maybe more equity in their home,” Housing and Livable Communities Secretary Ed Augustus said Wednesday. “We want it to be a tool for folks at all different income levels. So providing some ability to get some subsidized access to capital, I think it’s going to be critical for a lot of folks to take advantage of this.”

Backyard ADUs President Chris Lee, also present at the Lexington press conference, said the loan sizes on offer were “spot on.”

“It’s the most important thing to get this back into moderate- and low-income” homeowners, Lee said regarding MassHousing’s planned financing product. “Depending on what the subsidization is, which I assume they got right, it’s going to have a huge impact next year.”

While ADUs can provide some much-needed inventory and also create more affordable housing options, the progress in Massachusetts has left experts saying more needs to be done to enable their construction.

A Pioneer Institute study last month indicated that more work needs to be done. Massachusetts currently prohibits “unreasonable requirements” for ADU development, but study author Andrew Mikula, senior housing fellow at the institute, recommended statewide standards for policies like setback regulations or the percentage of a lot that can be built upon.

When asked by Banker & Tradesman, Augustus said that the original work of the Affordable Homes Act improved the permitting process for ADUs but didn’t rule out looking at further improvements.

“So we try to remove some of the local barriers or bureaucracy that sometimes gets put in place, and we’re going to keep looking at that,” he said. “We just rolled this out in February, so as we see communities adopt the new ordinances, we’re going to keep an eye on that and see if there are other pressure points that we can come in and be helpful to kind of smooth out the process to allow more people to take advantage of this.”