Mayor Mamdani Reopens $395K ADU Financing — What NYC Homeowners Need to Know

on march 18, 2026, mayor zohran mamdani made an announcement that tens of thousands of NYC homeowners have been waiting for: the Plus One ADU financing program is officially back. after a two-year pause, the city has reopened applications for up to $395,000 in combined grants and low-interest loans to help homeowners build accessory dwelling units on their property.

but the financing reopening was only part of the news. the administration also launched the ADU For You platform, released a library of 11 pre-approved architectural plans, and set a firm application deadline of june 12, 2026. if you have been thinking about adding an ADU to your property, this is the most concrete opportunity the city has ever offered.

here is everything you need to know -- who qualifies, how the money works, what the plans look like, and exactly how to apply before the window closes.

the big news: what happened on march 18

mayor mamdani's announcement was the culmination of months of work following the City of Yes zoning reforms that passed in late 2024. those reforms legalized ADUs across all five boroughs for the first time, but legalization alone did not solve the biggest barrier: cost.

the march 18 announcement addressed that head-on with three major moves:

1. reopened the Plus One ADU financing program -- providing up to $395,000 per project in a combination of grants and forgivable loans
2. launched the ADU For You platform at housing.hpd.nyc.gov/adu, a one-stop digital hub for ADU planning, design, and permitting
3. released 11 pre-approved architectural plans through the Pre-Approved Plan Library (PAPL), designed to slash permitting timelines and reduce upfront costs

the numbers tell the story of demand. according to HPD, 2,800 homeowners expressed interest during the first round of the program before it was paused. an estimated 68,000 properties across the city are eligible out of roughly 565,000 total. the city clearly heard the demand and is scaling its response.

what is the Plus One ADU program?

the Plus One ADU program is a city-funded initiative that provides financial assistance to homeowners who want to build an ADU on their property. it is administered by the Department of Housing Preservation and Development (HPD) in partnership with Neighborhood Restore and Restored Homes HDFC.

here is how the money breaks down:

the financial structure

• total available: up to $395,000 per project
• format: a combination of construction grants and low-interest loans
• loan forgiveness: the loan portion is forgivable after 10 years, meaning if you maintain the property and meet program requirements for a decade, you will not have to pay it back
• interest rate: low or zero interest during the 10-year period

this is not a typical home improvement loan. the grant component means a significant portion of the money does not need to be repaid at all. the forgivable loan structure means the rest effectively becomes a grant too -- as long as you stay in the program for 10 years.

income requirements

to qualify for Plus One financing, your household income must be at or below 100% of the Area Median Income (AMI) for the New York City metropolitan area. for 2026, that translates roughly to:

• 1-person household: approximately $90,000
• 2-person household: approximately $103,000
• 3-person household: approximately $116,000
• 4-person household: approximately $128,000

these thresholds are updated annually by HUD. if your income is close to the limit, it is worth applying anyway -- the exact calculation accounts for household size and can vary slightly. you can check your eligibility on our free tool before starting a formal application.

who qualifies? property requirements

the Plus One program is not available to every property in the city. here are the key requirements your property must meet:

property type

• detached or semi-detached one- to two-family home
• the home must be owner-occupied -- you must live there as your primary residence
• you must own the property (not rent it)

zoning and lot requirements

• your property must be in a residential zone that permits ADUs under the City of Yes reforms
• there must be sufficient lot area to accommodate the ADU -- the specific requirements depend on your zoning district and the type of ADU you want to build
• the ADU must comply with setback, height, and lot coverage requirements for your zone
• your property cannot have unresolved DOB violations that would prevent a building permit

ADU type

• detached backyard cottages (the most common type funded by Plus One)
• garage conversions
• basement conversions (subject to additional requirements including fire sprinklers)
• above-garage units

not sure if your property qualifies? the fastest way to find out is to use our free eligibility checker. it pulls your property data from the city's PLUTO database and checks zoning, lot size, building class, and more in about 30 seconds.

the 11 pre-approved plans

one of the most exciting parts of the march 18 announcement was the release of the Pre-Approved Plan Library (PAPL). this is a collection of 11 architectural designs that have already been reviewed and approved by the Department of Buildings for code compliance.

why pre-approved plans matter

normally, getting architectural plans approved through DOB can take months and cost $5,000 to $30,000 in architect fees alone. with a pre-approved plan, you skip the bulk of that process. the plans have already been vetted for structural integrity, fire safety, accessibility, and zoning compliance. you still need a site-specific review (to confirm the plan fits your actual lot), but the heavy lifting is done.

what is available

the 11 plans in the PAPL range from compact studios to larger one- and two-bedroom units:

• size range: 280 to 800 square feet
• estimated construction costs: $85,000 to $650,000 depending on size, finishes, and site conditions
• configurations: studios, one-bedrooms, and two-bedrooms across single-story and two-story designs
• styles: modern, traditional, and transitional designs to fit different neighborhood aesthetics

each plan includes full construction documents, structural engineering, and MEP (mechanical, electrical, plumbing) specifications. you can browse the designs and compare them on the pre-approved plans page to see which ones might work for your property.

cost expectations by plan type

based on the PAPL designs and current NYC construction costs, here is a general range:

• small studio (280-350 sqft): $85,000 - $180,000
• standard one-bedroom (400-550 sqft): $180,000 - $350,000
• large one-bedroom or two-bedroom (600-800 sqft): $350,000 - $650,000

these ranges account for foundation work, utilities, and standard finishes. high-end finishes, difficult site access, or basement sprinkler systems can push costs higher.

how to apply: step by step

the application process for Plus One has been streamlined compared to the first round. here is the current path:

step 1: check your eligibility

before anything else, confirm that your property qualifies. you can do this two ways:

• use nycadu.com's eligibility checker for an instant property analysis based on city data
• visit housing.hpd.nyc.gov/adu and use the city's ADU For You tools

step 2: choose your ADU type and plan

decide whether you want a detached cottage, garage conversion, basement conversion, or above-garage unit. browse the pre-approved plan library to find a design that fits your lot and budget. you are not required to use a pre-approved plan, but doing so will significantly speed up the permitting process.

step 3: contact Neighborhood Restore

the Plus One program is administered through Neighborhood Restore and Restored Homes HDFC. they handle intake, income verification, and financial counseling. you can reach them at:

• phone: 212-584-8981 ext. 12
• online: through the ADU For You platform

step 4: submit your application

the formal application requires:

• proof of property ownership
• proof of owner-occupancy
• household income documentation (tax returns, pay stubs)
• property survey or lot dimensions
• your preferred ADU plan (pre-approved or custom)

step 5: approval and construction

if approved, the program pairs you with a participating contractor and manages the disbursement of funds. HPD provides oversight throughout the construction process to ensure quality and code compliance.

the june 12, 2026 deadline -- why it matters

this is the part that should create urgency. the application deadline for this round of Plus One financing is june 12, 2026. that is less than three months away.

here is why that matters more than it might seem:

• the program was paused for two years. after the initial round, Plus One went dark. there was no guarantee it would come back, and many homeowners who waited missed out entirely. there is no guarantee that another round will open after this one.
• funding is limited. the city has not disclosed the exact budget for this round, but government financing programs are always capped. when the money runs out, the program closes -- potentially before the deadline.
• 2,800 homeowners expressed interest in round one. with the new ADU For You platform making the process more accessible, round two could see significantly higher demand.
• applications take time to prepare. gathering income documentation, choosing a plan, and completing the intake process with Neighborhood Restore is not something you can do the night before the deadline.

if you are even considering an ADU, the smart move is to check your eligibility now and start the conversation with Neighborhood Restore well before june 12.

what if you do not qualify for Plus One?

not everyone will meet the income requirements or property criteria for Plus One financing. that does not mean an ADU is out of reach. here are the most common alternative financing paths:

HELOC (Home Equity Line of Credit)

if you have significant equity in your home, a HELOC lets you borrow against it at relatively low interest rates. many NYC homeowners have seen substantial appreciation since purchasing, making this a viable option. current HELOC rates in the NYC market range from approximately 7% to 9%.

renovation loans

FHA 203(k) loans and Fannie Mae HomeStyle renovation loans allow you to finance construction as part of your mortgage. these can cover up to the full cost of the ADU project and are available through most major lenders.

construction loans

traditional construction loans provide funding in stages as the project progresses. they typically convert to a permanent mortgage once construction is complete. rates are higher than standard mortgages but lower than personal loans.

ADU-specific lenders

a growing number of fintech lenders now specialize in ADU financing. companies like Maxable, RenoFi, and others offer products designed specifically for accessory dwelling unit construction.

we break down all of these options in detail on our financing guide page, including current rates and eligibility requirements.

full cost breakdown: what to budget for

regardless of how you finance your ADU, understanding the full cost picture is essential. here is what you should budget for beyond the headline construction number:

construction costs

• detached backyard cottage: $85,000 - $650,000 (depending on size and finishes)
• garage conversion: $50,000 - $200,000
• basement conversion: $80,000 - $250,000
• above-garage unit: $150,000 - $400,000

fire sprinkler systems (basement ADUs)

if you are converting a basement, NYC fire code requires a sprinkler system for the entire building -- not just the ADU. this is one of the most commonly overlooked costs:

• residential sprinkler installation: $20,000 - $60,000
• water service upgrade (if needed for adequate pressure): $5,000 - $15,000

this is a major reason many homeowners opt for detached units instead. a backyard cottage does not trigger the whole-building sprinkler requirement.

architecture and engineering

• custom architectural plans: $5,000 - $30,000
• pre-approved plans: significantly less, since structural and MEP engineering are already included
• site-specific engineering: $2,000 - $8,000 (soil testing, foundation design)

permits and fees

• DOB filing fees: $1,000 - $5,000
• expeditor fees (optional but common in NYC): $2,000 - $6,000
• utility connection fees: $2,000 - $10,000

soft costs and contingency

• survey: $800 - $2,000
• insurance during construction: $1,000 - $3,000
• contingency budget: plan for 10-15% over your construction estimate

all in, a typical detached backyard cottage project in NYC runs between $120,000 and $400,000 when you include all soft costs. basement conversions can be deceptively expensive once sprinklers are factored in. understanding these numbers upfront prevents surprises later.

next steps: what to do right now

if you are a homeowner in NYC and this program sounds like it could work for you, here is what to do today:

1. check your property's eligibility -- our free tool analyzes your lot, zoning, building class, and more in about 30 seconds. you will know immediately whether your property is a candidate for an ADU.
2. review the pre-approved plans -- browse the 11 designs in the PAPL to get a sense of what is possible on your property and what it might cost.
3. explore financing options -- whether you qualify for Plus One or need an alternative path, understanding your financing is the foundation of any ADU project.
4. call Neighborhood Restore at 212-584-8981 ext. 12 to start the Plus One intake process. do not wait until june to make this call.
5. book a consultation -- if you want personalized guidance on your specific property, our ADU consultations walk you through feasibility, design options, costs, and the application process.

the june 12 deadline is real. the program paused once before and could pause again. if you have been thinking about an ADU, the window is open right now -- and it may not stay open indefinitely.