Sponsors (2)
Ask me how I read this bill.
This is not an official government website.
Copyright © 2026 PLEJ LC. All rights reserved.
Allows housing preservation grants under the Housing Act of 1949 to be used for accessory dwelling unit (ADU) assistance and revises allowable uses and program rules. The change sets per-unit dollar caps (with inflation adjustments), requires most grant funds be directed to single‑family housing, adds owner‑residency and income eligibility requirements for ADU recipients, permits grantees to use up to 20% of grant funds for administration, and authorizes $200,000,000 to carry out the program.
Amends Section 533 of the Housing Act of 1949 (42 U.S.C. 1490m) to modify subsection (b) and add multiple new provisions, including use for accessory dwelling units.
Allows grant funds under the section to be used to provide loans or grants for accessory dwelling units (ADUs).
Assistance for single-family housing may only be provided for housing that is at least 25 years old as of the date the occupancy permit is issued.
The amount of assistance to an individual for single-family housing may not exceed $200,000.
A grantee may not use less than 75 percent of the assistance provided under this section for single-family housing for the purposes of grants.
Who is affected and how:
Homeowners (direct effect): Homeowners who want to add or rehabilitate ADUs are the primary direct beneficiaries. Owner‑occupancy and income rules will determine eligibility, so owner‑occupants meeting income limits will be positioned to receive assistance to build or upgrade ADUs.
Low‑ and middle‑income households (targeted beneficiaries): By tying ADU assistance to income limits, the program aims to increase affordable housing supply for lower‑income households either by enabling owners to house relatives/tenants affordably or to create affordable rental units.
Renters and local housing markets (indirect effect): Increased ADU production can expand rental supply at smaller scales, potentially easing local housing shortages. Effects on rents and neighborhood composition will vary by local zoning, permitting capacity, and housing demand.
Grant recipients and administrators (local governments, nonprofits, public agencies): Entities that apply for and receive preservation grants will need to incorporate ADU project criteria, document owner residency and income eligibility, and potentially use up to 20% of funds for administration. This creates additional compliance, reporting, and oversight work.
HUD/Implementing federal agency: The administering agency will need to issue new guidance, update application scoring and monitoring systems, and oversee inflation adjustments to caps and proper use of funds.
Potential benefits:
Potential risks and tradeoffs:
Overall, the legislation redirects preservation grant resources toward small‑scale housing production (ADUs) with guardrails to target funds by owner residency and income while authorizing a modest dedicated funding amount and allowing administrative costs to support program delivery.
Expand sections to see detailed analysis
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced February 24, 2025 by Angus Stanley King · Last progress February 24, 2025
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced in Senate