CHI ACCESSORY APARTMENT PROGRAM

In response to the demonstrated need for housing choice in Westchester County and Long Island, and recognizing that a growing number of municipalities are encouraging the creation of small apartments in private homes, Community Housing Innovations has partnered with banks to establish a program to develop accessory apartments. The “CHI Accessory Apartment Program”(AAP) will provide low interest financing for homeowners to create new housing opportunities for their neighbors, while providing significant rental income for themselves.

Surveys of residents have established that many seniors and young couples must leave their communities because they cannot find apartments. But while many citizens recognize the problem, they oppose the density of multi-family housing.

Accessory apartments present a less controversial alternative to multi-family developments. They are defined as units created in the surplus space of a single family home—typically a one-bedroom or studio apartment or in a structure that is separate from the main house, such as a garage, former carriage house, etc.

The program will take a homeowner step-by-step through the development process:

• CHI will provide any homeowner interested in creating an accessory apartment with a free copy of the locality’s accessory apartment application (enclosed).
• Homeowners interested in pursuing the process will pay a non-refundable $250 program fee to CHI, which will include a site visit by a licensed HUD-Certified Consultant. In addition, CHI will attempt to pre-qualify the homeowner for a low interest home equity loan for the entire cost of the renovation. Upon completion of the apartment, CHI will provide a FANNIE Mae-approved landlord manual, with individualized counseling.
• The HUD-Certified Consultant’s site visit will assess the best location for the apartment and determine whether the project meets all of the requirements of the town code.
• If the homeowner chooses to proceed with the HUD-Certified Consultant, they will agree upon a price and the HUD-Certified Consultant will design the apartment to meet building code requirements, assist the homeowner through the approval process, and oversee construction through completion.
• Prior to closing, CHI will provide the homeowner with FANNIE Mae landlord counseling, including copies of leases and information about how to handle issues such as utilities and security deposits. The counseling fee will be paid by the participating bank. If the homeowner does not use a participating bank, the fee will be $250 to the home owner.
  Accessory Apartments Make Economic Sense

Accessory apartments not only increase the supply of housing, they also help homeowners increase their income.

For example, let’s say it costs $25,000 to create a one-bedroom accessory apartment. A $25,000 home equity loan at 6% translates into a monthly payment of $278 for ten years. But these apartments typically rent for over $1,100 a month—resulting in additional income of $800 a month, or about $10,000 per year. This extra income can be used to pay the homeowner’s mortgage, taxes, or living expenses.

In most communities, homes are reassessed after the improvement is made but some municipalities are considering exempting homeowners who agree to keep the units affordable, based upon county guidelines.

Many homeowners do not seek the option of accessory apartments because they either don’t know about it or are too intimidated by the prospect of becoming a landlord. As a housing and human services agency, CHI will help homeowners with all aspects of the process.

Download an application. (pdf file)