Charlotte, N.C., offers loans for ADU construction

Charlotte, N.C., has begun offering homeowners interest-free loans to encourage construction of Accessory Dwelling Units (ADUs) in an effort to alleviate a housing shortage.

Charlotte is offering homeowners up to $80,000 in forgivable financing. The city requires that participating homeowners rent the ADUs to tenants not earning more than 80% of area median income and keep monthly rent below the fair market rent for a studio for renters earning 70% of AMI.

To meet eligibility, the ADUs must be self-contained units with their own kitchen and bathroom and total no more than 50% of the primary residence, with a cap of 1,000 sf for detached units. The program permits only one ADU per lot.

ADUs are smaller secondary residences on the same property as a primary residence. They are also called granny flats or tiny homes. These dwellings can be affordable housing options for seniors, retirees, single residents, and multigenerational families.