Accessory Dwelling Units (ADU)


In July 2019 VSHA was awarded funding for the development and implementation of a two-year pilot Accessory Dwelling Unit Program (ADUP) in Montpelier, Vermont. ADUP aims to assist with the building and initial leasing of an Accessory Dwelling Unit (ADU), including help with pre-construction design and securing of finances, permitting and compliance, contractor procurement and project management, and finally, tenant selection and lease up procedures. This program will work with local and statewide partners for additional funding, in-kind resources, tenant selection, and construction coordination. This program will aim to serve low to moderate income participants but will also have open eligibility enrolment. Final tenant selection will be decided by the homeowner who will also be eligible for grant and loan funds. Upon successful completion of this pilot, the program will be evaluated for targeting other communities in Vermont for the development of a similar localized ADUP.


VSHA Policy:

Qualifying ADU participants will be eligible for a grant of up to $20,000 and a loan of up to $10,000 at 0%. Grants will be a reimbursement directly to the homeowner and determined by calculating up to 50% of project costs upon completion, and loans may be made available before construction with a signed agreement. The money for this grant will come from a Community Development Block Grant (CDBG) through the city of Montpelier with at least 51% dispersed to clients meeting a target audience according to funder guidelines. The loan will come from a VSHA with a 5-year term and be secured the homes deed and returned to VSHA if the home is sold within 5 years or before the loan is repaid in full. While the homeowner who completes the ADU will be the recipient of all grant and loan money, either the tenant or owner can be considered for program eligibility.

Homeowner eligibility requirements:

  • The property must be a single-family dwelling
  • The property must be the owner’s primary residence
  • The property must be current with mortgage, taxes and insurance
  • The home must not be on the market for sale
  • The homeowner must be able to obtain financing for the project

Qualifying ADU requirements:

  • Proposed unit must meet state and local ADU guidelines: 24 V.S.A. Section 4412 (E)
    • The property has the capacity to handle the additional demand for septic (wastewater) disposal
    • The size of the Accessory Dwelling Unit equals no more than 30% of the total habitable square footage of the house. (Flexible with town permission)
    • The property meets any applicable setback, coverage, and parking requirements contained in the town zoning bylaws.
  • Proposed unit must be located in Montpelier, VT

Tenant or homeowner eligibility requirements for the program include:

  • Being at or below area Low- or Moderate-Income guidelines
  • Tenant has a Section 8 Voucher or other housing subsidy

**Other environmental and historic preservation guidelines may be required on a case by case basis to comply with funding criteria. The funding for this program is limited and priority will be given on a first come first served basis of income eligible homeowners**

For more information contact Tyler Maas at 802-828-6418; gro.ahsvnull@relyt or Melisa Begovic at 802-828-5456; gro.ahsvnull@asilem



Pre-application / Intake

Montpelier ADU Program Application

Order of Operations


More Information:




RHSP Tenant Application

RHSP Landlord Certification






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