Last Updated on July 20, 2025 by The HD Post Staff

CALIFORNIA – Congressman Sam Liccardo (D-CA) and Congressman Andrew Garbarino (R-NY) introduced the bipartisan SUPPLY Act to ease the housing shortage by expanding access to financing for Accessory Dwelling Units (ADUs).

According to Liccardo, ADUs help address the housing crisis, but most are built by wealthier homeowners since modest-income and younger owners often lack the home equity needed for second loans.

The SUPPLY Act offers government-backed, flexible financing to help modest-income homeowners fund ADU construction.

“By allowing second-position financing that preserves a homeowner’s low-interest first mortgage, this bill makes it possible for more families to build the ADUs they need,” said Casita Coalition CEO Noerena Limon.

Creates program to insure second liens used to finance ADUs

The SUPPLY Act bill amends the National Housing Act to require HUD to create a program – within two years, to insure second liens used to finance ADUs.

Borrowers can only get the loan insured if:

• It’s less than 30% of the FHA loan limit, or;
• The total loans don’t exceed the home’s value after building the ADU – whichever is smaller.

The loan amount may increase up to 50% of the expected annual rental income from the ADU.

In addition, borrowers must apply for insurance and certify they own the property where the ADU will be built.

The HUD secretary will set an annual insurance premium up to 1% of the insured loan amount.

Lawmakers sent the bill to the House Committee on Financial Services for review.