Rhode Island recently passed legislation to expand the opportunity for homebuyers or current homeowners to build an Accessory Dwelling Unit. ADUs can be a big help for a family, letting older members – like parents and grandparents – live beside younger generations while still maintaining independence. ADUs also let younger adults, like recent college grads, be near family while having their own space. Or the unit can become a rental option for the homeowner – though the law prohibits short-term rentals.
Whatever you decide to use it for, ADUs can increase your property value and help make the most out of your home.
ADUs are smaller, independent residential units located on the same property as a primary single- or multi-family home. They come in various forms; the types that can be financed through RIHousing’s loan are:
Rhode Island now allows homebuyers and current homeowners to build an ADU on their property if they meet certain criteria. Each town may have its own specific regulations, so it’s best to consult a qualified contractor who is familiar with the local requirements.
In addition to individuals or families purchasing a new home, RIHousing is now offering the FHA 203(k) as a refinance option for current homeowners who wish to build an ADU. Homebuyers or homeowners utilizing a FHA 203(k) Loan will receive a loan for both the purchase or refinance of the home and rehabilitation project(s) and/or the addition of the ADU.
Our network of approved Participating Lenders know our programs and can help you choose a loan that’s right for you.
RIHousing’s FHA 203(k) Loan finances attached or interior ADUs. The loan does NOT finance detached ADUs such as small cottages or tiny homes.
You must also talk to your contractor as each town has different regulations. Make sure your contractor is knowledgeable in the regulations for ADUs in the town where the work is happening.
We have refinancing options available. Talk to our Loan Center or a Participating Lender today to learn more about refinancing your home with 203(k).
A 203(k) consultant is a professional that works closely with the homebuyer/owner, the contractor, and their lender to identify opportunities for enhancements and guide the project.
Find a 203(k) consultant through the U.S. Department of Housing and Urban Development website or talk to your RIHousing mortgage expert.
An RI-licensed and insured contractor must do the work. Find out of if your contractor is licensed here.
Payments should not be made to the contractor directly. RIHousing will disburse funds in the escrow account as work is inspected and completed.
Talk to a Participating Lender or our Loan Center to learn more about the loan process.
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| Central Falls | 44007010900, 44007010800, 44007011100, 44007011000 |
| Pawtucket | 44007016000, 44007015300, 44007015100, 44007015200, 44007015500, 44007016600, 44007016700, 44007017000, 44007017100, 44007016100, 44007016400 |
| Newport | 44005040500, 44005041100 |
| East Providence | 44007010100, 44007010501 |
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