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Revere trust outlines $10,000 ADU loan program to boost affordable rentals
Summary
Trust staff presented a proposed accessory dwelling unit (ADU) loan of up to $10,000 per project (for up to five projects) that would be forgiven 20% per year over five years if units remain rented at an affordable rate; the proposal requires owner occupancy and annual rent certification.
Joe Rafalese presented draft terms for an accessory dwelling unit (ADU) loan program aimed at helping homeowners create ADUs and rent them at an affordability level tied to HUD formulas.
Under the proposal, the trust would offer a maximum loan of $10,000 per ADU project and fund up to five projects. The loan would be forgiven in equal 20% increments over five years provided the unit remains in compliance with the affordability rules and the owner continues to occupy the property.
Rafalese said the rent would be certified annually by the city as not exceeding the affordable rent limit at 100% of area median income (AMI). He noted that under the HUD formula for the year discussed, the affordable rent for an ADU could be about $2,000 per month, and that the trust would require an owner-occupancy commitment for the five‑year term. If the owner sells, moves out, or rents above the allowable rate, the unforgiven portion of the loan would be due.
Rafalese described common ADU forms seen in Revere — usually internal units such as basement apartments or in‑law units rather than detached backyard units — and said demand is increasing. He said staff proposes waiting to start taking ADU loan applications until the senior repair application is fully live so staff can provide adequate customer service and not launch two program intake periods simultaneously.
Trust members asked clarifying questions about whether two‑ or three‑family homes were eligible; Rafalese said single‑, two‑ and three‑family properties could apply provided the owner occupies the property and meets other program requirements. He reiterated that state law passed last year allows ADU construction without an owner‑occupancy requirement at the state level, but that the trust’s loan would be limited to owner‑occupants.
Rafalese said the trust’s plan is to have an application and terms in place so staff can move quickly once the senior program moves forward; he suggested bringing the loan program for a vote at the next meeting if trustees are comfortable.
