RIHOUSING SUPPORTING DEVELOPMENT OF ACCESSORY DWELLING UNITS THROUGH 203(K) LOAN PROGRAM

Opportunity for RI homebuyers and homeowners to create an additional dwelling unit on their property

PROVIDENCE, RI – Last year the Rhode Island General Assembly passed, and the Governor signed, legislation to widen the net of qualified property owners who can add Accessory Dwelling Units (ADUs) to their homes. The bill was sponsored by Representative June Speakman and Senator Victoria Gu and spearheaded by House Speaker Joseph Shekarchi; it’s being supported by RIHousing’s Federal Housing Administration (FHA) 203(k) Loan program. 

“Tackling the housing crisis takes a whole-of-government approach and bold strategies,” said Governor Dan McKee. “The loan program supports increased access to housing, which opens the door to better health outcomes and a stronger economy for Rhode Island. I’m proud to have worked with Speaker Shekarchi, Senate President Ruggerio, and the legislature on this important legislation.” 

“Congratulations to RIHousing for developing this creative program to help homeowners and increase housing stock,” said House Speaker K. Joseph Shekarchi. “ADUs are a great way to increase density without changing the character of the surrounding neighborhood. I am thrilled that RIHousing is making it possible for more Rhode Islanders to benefit from the legislation we passed in the General Assembly.” 

“I have spoken to homeowners in my area who want to renovate their garage or a space within their home into an ADU but don’t have the funds readily available, so I’m glad that RIHousing is supporting homeowners through the 203(k) financing program. ADUs offer the ‘missing middle:’ housing that is smaller, more affordable and smartly repurposes our existing buildings and garages. Whether homeowners use their ADUs to receive additional income through a long-term rental, or house a loved one, friend or onsite caregiver, it’s a win-win,” said Sen. Victoria Gu (D-Dist. 38, Westerly, Charlestown, South Kingstown). 

“As the House sponsor of the ADU legislation, I have received many inquiries from constituents looking for help financing the construction of such accessory units,” said Rep. June Speakman (D-Dist. 38, Bristol, Warren). I am delighted that this program provides that needed assistance. ADUs are a great way to gently expand housing availability in our communities and an essential tool for addressing the housing needs of Rhode Islanders.” 

RIHousing offers the FHA 203(k) Loan program to help Rhode Islanders take advantage of this financing opportunity. The program offers assistance to homebuyers or current homeowners who wish to renovate and/or expand their properties with an ADU. The addition of an ADU can mean multigenerational living on one property or a space to rent to generate additional income. 

More on ADUs 
ADUs are smaller, independent residential units located on the same lot as a primary single- or multi-family home. Rhode Island homeowners using the RIHousing 203(k) Loan can build an attached or in-home unit on their property if it meets 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.    

“RIHousing is committed to expanding housing options across our state,” said Carol Ventura, CEO & Executive Director of RIHousing. “As we continue to deal with a tight housing market, creative ideas are key to increasing housing options that more Rhode Islanders can afford. Giving homeowners the option to build or renovate an ADU can open doors for homeowners and renters.” 

ADUs are an additional, flexible solution to Rhode Island’s current housing shortage. They can be vital for a family, letting older members – like parents and grandparents – live beside younger members while still maintaining independence. ADUs also let younger members, like recent college graduates, be near family while having their own space. Or an ADU can become a rental opportunity for the property owner. In addition to expanding livable space on the property, ADUs can increase a home’s value. AARP has more information about the ABCs of ADUs: https://states.aarp.org/rhode-island/the-abcs-of-adus. 

“Rhode Island’s housing needs are evolving, and we must be innovative in our approach to meet those needs,” said Secretary of Housing Deborah Goddard. “By supporting the development of Accessory Dwelling Units through programs like the FHA 203(k) loan program, we are empowering homeowners to enhance their properties while contributing to a more affordable and diverse housing market – strengthening multigenerational living and giving homeowners the opportunity to create new rental spaces that can support families and bolster the local economy.” 

203(k) Loan 
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 or renovate 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 the proposed project.  

Projects must be completed within 12 months of the purchase or refinance date. The homebuyer or homeowner must complete RIHousing’s FHA 203(k) homebuyer education class prior to closing, which is offered online for $15. The homebuyer or current homeowner must also select an FHA-approved RI 203(k) consultant and a RI licensed and insured contractor. 

Interested homebuyers or homeowners can visit https://www.rihousing.com/adu/ or reach out to the RIHousing Loan Center or a RIHousing Participating Lender for more information.