Key facts
- Accessory dwelling units (ADUs) are small housing units ranging from 150 to 1,200 square feet.
- The average cost to build an ADU can range from $100,000 to $300,000, plus permit costs.
- Colorado's ADUG program has $5 million available for jurisdictions to provide technical assistance to low- and moderate-income homeowners.
- Colorado's CHFA ADU Finance Programs channel $8 million into loans, credit enhancements, and interest-rate buydowns for homeowners.
- Maui County offers grants of up to $100,000 for qualifying homeowners through its ʻOhana Assistance Pilot Project.
- Kaua'i's ARU program can provide fee waivers and subsidies totaling nearly $20,000 for homeowners.
Building a tiny home, also known as an accessory dwelling unit (ADU), can be a costly endeavor, with average construction costs ranging from $100,000 to $300,000, not including permit fees. To address this financial barrier and promote housing equity, several states and local governments have introduced programs offering grants and financial assistance to homeowners looking to build ADUs.
In Colorado, the passage of HB24-1152 in 2024 aims to facilitate ADU construction. The Colorado Department of Local Affairs (DOLA) is providing $5 million through its Accessory Dwelling Unit Grant Program (ADUG) to jurisdictions that implement supportive codes and offer technical assistance to low- and moderate-income homeowners. Additionally, the Colorado Housing and Finance Authority (CHFA) is launching ADU Finance Programs with $8 million to offer loans, credit enhancements, and interest-rate buydowns directly to homeowners.
Hawaii also has initiatives to support ADU development. Maui County's ʻOhana Assistance Pilot Project offers grants of up to $100,000 for homeowners building attached or detached ADUs, provided they meet workforce housing rent requirements and commit to long-term rentals. The County of Kaua'i's Affordable Additional Rental Unit (ARU) program provides financial aid through fee waivers and subsidies, potentially totaling nearly $20,000, for homeowners who build an ARU no larger than 800 square feet and agree to long-term residential rental use.