Affordable housing: Cape Cod banks make it easier for homeowners to add ADU construction – Cape Cod Times

When Alisa Magnotta and staff at the Housing Assistance Corporation started researching why there weren’t more accessory dwelling units (ADU) on the Cape, they learned that traditional loan options held some homeowners back.  

They asked local lenders for help, Magnotta said. Now, Cape Cod 5, First Citizens Bank and the Cooperative Bank of Cape Cod offer products for homeowners who want to build ADUs — an in-law unit is an example of an ADU — but who might otherwise not be able to. 

Each bank’s offering is different and depends on the homeowner’s situation and the kind of equity they have. Homeowners can refinance their homes, take out home equity lines of credit or home equity loans.  

“They all want to bring more housing online,” Magnotta said. “They want to help their customers and homeowners on the Cape be successful.” 

Magnotta said having the right kind of loan that can inspire year-round housing is a great tool. It will help customers and homeowners on the Cape, and it will bring more housing online, she said.  

Nine towns on the Cape have established accessory dwelling unit bylaws to combat the housing crisis. While bylaws vary by town, the loan products require that the ADUs be used for year-round and not short-term rentals. 

The Housing Assistance Corporation has been at the forefront of affordable housing efforts since 1974. Today it offers an incentive program for people to build ADUs, a technical assistance program that walks homeowners through the construction process and a vetting process to make sure renters and landlords are a good match.  

More: Barnstable proposes ADU ordinance, zoning changes to increase housing units

“We wanted to make it easier for homeowners to say yes to building housing,” Magnotta said. 

HAC incentivized homeowners to be part of the solution by having technical assistance, incentive payments and loan products that she said were modeled after the solar industry.  

“We hope to develop a scalable program that we can take beyond the Cape,” Magnotta said.  

Local lenders are crucial to the efforts.  

More: Housing headaches: Can a new bylaw help Wellfleet solve a crisis for workers, residents?

The Cooperative Bank of Cape Cod has put flexible qualifying guidelines in place, including considering an applicant’s projected rental income in addition to their existing income.  

Projected income usually can’t be considered but community banks have more flexibility, according to Shanika Rogowski, senior vice president and chief residential lending officer for the Coop. 

“We’re hoping that opens the door to entry for a lot of folks that might not have had that option,” said Rogowski.  

Banks are using town criteria for long-term rental agreements. They are working with local appraisers to assess appropriate rental amounts. What makes the loan products special is they work with affordable housing efforts by requiring year-round rentals.  

“One great thing about living and working on the Cape are the people and the community,” Magnotta said. “We are problem solvers.”

She points to the controversy surrounding so many affordable housing projects, including Twin Brooks in Hyannis and Cloverleaf in Truro. To build 150 apartments would take millions of dollars, millions in subsidies and anywhere from three to five years, she said  

More: To understand Cape Cod’s housing crisis, look at what’s happening at Twin Brooks

“But if every town encouraged 10 homeowners to build ADUs, we could have 150 apartments in less than a year,” Magnotta said. “Without taxpayer dollars. You’ve got a real solution.”  

For more information, visit or contact the banks mentioned directly.

Contact Denise Coffey at