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
MassHousing says it’s launching a new accessory dwelling unit construction loan program this spring, giving a concrete start date to an idea announced by Gov. Maura Healey in December.
Speaking in front of a Lexington ADU Dec. 10, Healey announced the quasi-public housing finance agency would be using an unspecified fraction of the $20 million in state housing bond money it was given last year.
The MassHousing loans will support new ADU construction, either within an existing property or elsewhere on a homeowner’s lot. The loan will be structured as a fixed-rate, 20-year second mortgage that will finance construction costs up to $250,000 for detached accessory dwelling units and up to $150,000 for attached accessory dwelling units. The loan is intended as construction-to-permanent financing.
“This program expands on the Healey-Driscoll Administration’s commitment to adding much-needed housing across the state by tackling one of the biggest barriers to building ADUs: access to affordable financing,” Housing and Livable Communities Secretary Ed Augustus said in a statement. “By pairing our statewide ADU framework with low-cost construction loans for households often locked out of traditional equity products, MassHousing is turning innovative policy into real, livable homes.”
Borrowers will see their loan matched with additional funding offered at 0 percent interest and deferred repayment terms, MassHousing said in a news release. This loan structure aims to lower effective interest rates for borrowers and allow consumers to access greater overall loan amounts, MassHousing said.
But the loans won’t be available to everyone.
Eligible borrowers will have to meet MassHousing’s statutory income limit – up to 135 percent of the area median income – and will have to meet other loan underwriting criteria. Homeowners looking to utilize the program will need to have designs and permits for their ADU in hand before applying, and will have to be ready to move forward with construction. Technical assistance funding from the Massachusetts Housing Partnership will be available for some borrowers to fund design and permitting.
“Financial barriers are a key constraint to the construction of new accessory dwelling units across the country,” MassHousing CEO Chrystal Kornegay said in a statement. “In collaboration with our partners in state government and community-based lenders, MassHousing is working to bring accessible, affordable ADU financing within reach of homeowners of all means, in all regions of our state. We are excited to reach this milestone, and we look forward to opening the new ADU loan program to Massachusetts homeowners in the coming months.”
