New legislation paves way for more ADU construction

A new bill proposed in Congress would make it easier for homeowners to build accessory dwelling units on their properties, a step supporters say will help alleviate the nation’s housing affordability crisis.

The legislation, called the SUPPLY Act, aims to expand access to second mortgages for homeowners who want to build an ADU by making it easier for them to get financing. The bill would direct the Federal Housing Administration, Fannie Mae and Freddie Mac to do more to support ADUs, further expanding access to capital by making the loans less risky for lenders.

Homeowners who want to build an ADU would also be able to count expected rental income and property value increases when applying for FHA loan insurance, further building on a policy HUD instituted back in 2023. While the older…