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From city-backed grants to private loans, here are all the ways to fund your ADU project — including the Plus One ADU Program offering up to $395,000.
NYC's flagship ADU financing program administered by HPD. Combines grants and low-interest loans to make ADU construction accessible to middle-income homeowners.
Up to $395,000
Combined loans + grants
Up to $175,000
Grant component (no repayment)
165% AMI Income Limit
Preference at 120% AMI or below
Apply by June 12, 2026
Application deadline
NYC offers a significant tax break to homeowners who build ADUs.
Up to $200K
Increased market value exempt from property tax
5 Years
100% exemption on the increased value
Owner-Occupied
Must live on the property when the ADU is built
Example: If building your ADU increases your property's market value by $180,000, that entire increase is exempt from property tax for 5 years. At NYC's typical Class 1 tax rate, this saves roughly $2,000\u2013$4,000 per year in property taxes.
Private financing options for homeowners who don't qualify for Plus One or need additional funding.
Home Equity Line of Credit
Short-Term Build Financing
Refinance for Higher Amount
Recommended financing approaches based on your ADU type and budget.
| Project Type | Est. Cost | Recommended Strategy | Notes |
|---|---|---|---|
| Basement Conversion | $100K–$250K | Plus One grant + HELOC | Grant may cover most of the cost for qualifying homeowners |
| Garage Conversion | $150K–$300K | Plus One (may cover most/all) | Strong candidate for full Plus One financing coverage |
| Backyard Cottage | $250K–$400K+ | Plus One + construction loan for gap | Plus One covers base; construction loan bridges the difference |
| Higher Income (>165% AMI) | Varies | HELOC + construction loan | Not eligible for Plus One; combine private options |
Check your property eligibility first, then book a consultation to discuss financing options specific to your situation.