Tiny homes have become an increasingly popular housing option for a variety of reasons, ranging from their low prices to their eco-friendly features. In some cases tiny homes are built beside existing homes as accessory dwelling units (ADUs), while in others you might put a tiny home on an empty plot of land.
Tiny homes typically range in size from 150 square feet to about 1,200 square feet, Business Insider reported. The average cost is usually between $30,000 and $60,000, according to Rocket Mortgage. However, the price you pay might be as little as $8,000 or as much as $150,000 (or more), depending on factors such as the location and the amenities you choose to include. You’ll also face permitting fees in many jurisdictions.
Some states are especially friendly to tiny home owners by offering financial incentives and other perks. For example, in North Carolina you don’t have to pay property taxes for tiny homes built on a foundation, according to the TinyHouseMe website. Some states simply make it easier to build tiny homes through comparatively lenient permitting processes.
But a few states go further by offering government programs to help you pay for a tiny home. Here’s a look at three of them.
California
California’s ADU Grant programs provides up to $40,000 towards pre-development and non-reoccurring closing costs associated with the construction of an accessory dwelling unit, according to the state’s Housing Finance Agency (HFA). Predevelopment costs include site prep, architectural designs, permits, soil tests, impact fees, property survey and energy reports.
The program is open to Californians with low to moderate income. The state allocated a total of $50 million to the program and all funds were fully reserved as of March 1, 2023, according to the HFA. However, the agency is keeping grant program information available to help borrowers and lenders as they continue to process grants in their pipeline.
New York
The New York State Plus One ADU Program provides grants to units of local governments and not-for-profit organizations that are committed to “crafting community-specific programs for generating safe, quality ADUs,” according to the state government website. The program provides low- to moderate-income New York residents with up to $125,000 to build an ADU or bring an existing ADU up to code, Business Insider reported.
Applications are available to homeowners who make at or below 100% of the area median income. The state has set aside $85 million over the next five years to fund the program.
Vermont
The Vermont Housing Improvement Program-ADU initiative provides grant funding to create accessory dwelling units on owner-occupied single-family properties. Owner-occupants of a single-family property can apply for a grant of up to $50,000 for the creation of an ADU, according to Vermont.gov.
You can apply through these five regional organizations: Champlain Housing Trust, Downstreet Housing & Community Development, NeighborWorks of Western Vermont, RuralEdge, and the Windham & Windsor Housing Trust. You’ll have to meet certain requirements, such as matching at least 20% of the grant funds and completing the project within 18 months of signing the grant agreement.
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