The City of Charlotte is offering $80,000 forgivable, interest-free loans to property owners who build small, affordable rental homes on their land.

The new Queen City Accessory Dwelling Units (ADUs) Program helps address the affordable housing crisis while homeowners have a chance to earn extra income from their backyard.

ADUs could be a converted basement or a standalone backyard building and must have a kitchen, bathroom, sleeping area and separate entrance – a set-up that typically works well for seniors and single residents.

To be eligible for the city financing, owners must rent their ADUs to residents earning no more than 80% of the area median income ($62,850 for a single person or $89,750 for a family of four).

• Rent must be capped at the "Fair Market Rent" for a studio at 70% AMI, which currently would be $1,099, per the city's zoning administration manual.
• The loan is forgiven at $10,000 per year of affordability, up to eight years.
• For faster forgiveness, landlords may lease to voucher holders or residents referred by supportive service agencies or the city's housing partners and receive up to $15,000 annually.

Building an ADU costs around $90,000 to $250,000, depending on the size, design and materials, per the city's estimates.

• From design to move-in, the construction process could take six months to two years.

Charlotte's housing affordability crisis continues to worsen. More than half (51%) of the metro area's renters are cost-burdened, meaning more than 30% of their income is spent on housing.

• Mecklenburg County produced 11,500 fewer housing units than it needed to keep up with growth over the past decade. To catch up, it needs 10,600 new housing units a year.

Homeowners can apply here through the city's Housing and Neighborhood Services Department.