Massachusetts

Massachusetts has launched one of the most aggressive ADU-specific state financing programs in the country. MassHousing's Accessory Dwelling Unit Loan Program (ADULP), announced 2026-01-14 by Governor Healey, provides second-mortgage construction financing of up to $250,000 for detached ADUs and up to $150,000 for attached ADUs. The product is structured as a 5.25% fixed-rate, 20-year amortizing loan, with a portion of additional funding offered at 0% interest with deferred repayment terms. Eligible homeowners must meet MassHousing's statutory income limits (up to 135% of Area Median Income — ranging from ~$165K to ~$205K depending on county). MassHousing initially authorized $20M for mission-oriented homeownership, with a portion supporting ADULP. The Massachusetts Housing Partnership administers a separate $10M ADU Technical Assistance Program for predevelopment activities. The Massachusetts Housing Partnership's One Mortgage program also includes an ADU Incentive Program component.

• MassHousing Accessory Dwelling Unit Loan Program (ADULP) (MassHousing)
• Massachusetts Housing Partnership ADU Incentive Program (Massachusetts Housing Partnership)
• Massachusetts Housing Partnership ADU Technical Assistance Program (Massachusetts Housing Partnership)

Massachusetts operates one of the most ADU-relevant state insurance regimes in the country because of its coastal hurricane and Nor'easter exposure. The Massachusetts Property Insurance Underwriting Association (MPIUA), branded the Massachusetts FAIR Plan, was established 1968 as the state's insurer of last resort. MPIUA is a joint underwriting association backed by all insurers writing basic property insurance in Massachusetts; it issues policies, collects premiums, and processes claims directly. Coverage is largely in line with a standard HO-3 policy but capped at $1M per home. The FAIR Plan has become the largest insurer of homes on Cape Cod and the Islands — about 4 in 10 (~40%) of all homes on Cape Cod and the Islands are now FAIR-Plan insured (up from 33% in 2023). Bristol and Plymouth counties combined with the Cape and Islands account for ~55% of all FAIR Plan policies. Coastal admitted-market retraction is the dominant property-insurance dynamic in Massachusetts as of 2026. ADUs are typically covered as accessory structures under standard homeowner policies (often at ~10% of dwelling coverage) or require a dwelling-fire or landlord endorsement when rented; the FAIR Plan covers eligible properties on the same homeowner basis without ADU-specific provisions but may apply hurricane/wind-deductibles separately to ADUs in coastal towns.

Massachusetts operates an integrated state-level ADU program suite combining preemption (760 CMR 71.00 + M.G.L. c. 40A), construction financing (MassHousing ADULP), technical assistance (MHP $10M program), and a no-cost ADU Design Challenge launching replicable plan templates. Governor Healey announced this campaign in 2026 alongside the 1,200+ ADU first-year approval milestone. The state does not yet operate a statewide impact-fee waiver, but municipalities cannot impose unreasonable regulatory requirements per the Act.

• Affordable Homes Act ADU Protected-Use Framework (760 CMR 71.00) — ADUs by-right in single-family districts statewide, capped at smaller of 50% of principal dwelling or 900 sqft. Implementing regulation defines model bylaw provisions and municipal-compliance requirements.
• MassHousing ADU Loan Program (ADULP) — 5.25% fixed-rate second mortgage up to $250K (detached) or $150K (attached), 20-year amortization, with a portion at 0% deferred. Launched 2026-01-14.
• MHP ADU Technical Assistance Program — $10M state-funded program administered by Massachusetts Housing Partnership for ADU predevelopment — site evaluation, design, permit preparation, contractor coordination.
• ADU Design Challenge — Healey administration program launching replicable, no-cost ADU design templates for use across Massachusetts municipalities.