How to Get a $125,000 Grant to Build an ADU on Long Island

What if someone offered to pay for half, or even all, of your ADU construction costs? That is exactly what New York State's Plus One ADU Program does. Through forgivable grants of up to $125,000, the program helps Long Island homeowners build accessory dwelling units while addressing the region's severe housing shortage. If you own a home in a participating Suffolk County town, this program could transform your ADU project from a financial stretch into a smart investment with virtually no out-of-pocket cost for a conversion.

This guide explains everything you need to know about the Plus One ADU Program, who qualifies, how the grant works, and how to apply.

What Is the Plus One ADU Program?

The Plus One ADU Program is a New York State initiative administered by the Housing and Community Renewal (HCR) agency. The state has allocated $85 million to the program, which provides forgivable grants to homeowners who create new accessory dwelling units on their properties and rent them to tenants at affordable rates.

The concept is straightforward: the state helps pay for your ADU construction, and in return, you agree to rent the unit to income-qualified tenants at below-market rates for a specified period. If you fulfill the rental terms, the grant is completely forgiven. You never have to pay it back.

The program targets homeowners in municipalities that have opted in, and several Suffolk County towns are participating. It is designed to create new housing units without the political and logistical challenges of building large apartment complexes. Instead, it distributes small-scale housing across existing residential neighborhoods, one ADU at a time.

Participating Suffolk County Towns

Not every town on Long Island participates in the Plus One ADU Program. As of 2026, the following Suffolk County towns have opted into the program:

• Town of Babylon — One of the most ADU-friendly towns on Long Island, with accessory apartment provisions since 1979. Babylon's participation in Plus One adds a significant financial incentive on top of already-favorable zoning.
• Town of East Hampton — The high cost of housing in the Hamptons makes the $125,000 grant especially impactful here. East Hampton has recognized the need for workforce housing, and ADUs offer a solution that preserves the town's residential character.
• Town of Huntington — With its dedicated Accessory Apartment Bureau, Huntington was a natural fit for the Plus One program. The town's established infrastructure for processing ADU applications makes the grant process smoother.
• Town of Islip — Islip's participation opens the door for homeowners across one of Suffolk County's most populated towns. Combined with Islip's existing accessory apartment provisions, the grant makes ADU construction significantly more accessible.
• Town of Riverhead — Riverhead has been proactive about affordable housing initiatives, and Plus One aligns with the town's existing housing strategy.
• Town of Shelter Island — As an island community with limited housing stock, Shelter Island's participation reflects the acute housing shortage faced by seasonal workers and year-round residents.
• Town of Southampton — Despite Southampton's large lot size requirements (up to 30,000 square feet in some zones), homeowners who qualify can offset the higher construction costs with the $125,000 grant.

If your town is not listed above, the program may expand in future funding rounds. Contact your town's planning department or reach out to us for the latest information.

Eligibility Requirements

To qualify for the Plus One ADU Program, both the homeowner and the property must meet specific criteria:

• Property location. Your home must be in a participating municipality. For Suffolk County, that currently means one of the seven towns listed above.
• Owner-occupancy. You must live on the property, either in the primary residence or in the ADU itself. This aligns with the owner-occupancy requirements that most Suffolk County towns already impose for accessory apartments.
• Tenant income limits. You must rent the ADU to a tenant whose household income does not exceed 80% of the Area Median Income (AMI) for the Nassau-Suffolk metropolitan area. For context, 80% AMI for a two-person household in Suffolk County is approximately $85,000 to $95,000 per year, depending on annual HUD adjustments. This is not low-income housing. It targets working families, teachers, first responders, and healthcare workers who struggle with Long Island's high rents.
• Affordable rent. The rent you charge must be at or below the affordable rent threshold set by HCR for the area. These rents are typically 20 to 40 percent below market rate for comparable units in your area.
• New construction or conversion. The grant applies to creating a new ADU, not legalizing an existing unpermitted unit. Eligible projects include garage conversions, basement conversions, above-garage apartments, detached new construction, and additions.
• Code compliance. The completed ADU must meet all applicable building codes, zoning requirements, and health department regulations. The unit must receive a certificate of occupancy.

How the Grant Works

Understanding the financial mechanics of the Plus One grant is important before you apply:

• Grant amount. Up to $125,000 per ADU project. The actual amount depends on your construction costs and the program's assessment of your project.
• Forgivable structure. The grant functions as a forgivable loan. If you comply with all program requirements for the full term, the loan balance is forgiven entirely. You owe nothing.
• Forgiveness period. The term during which you must maintain affordable rents and owner-occupancy is typically 10 to 15 years, depending on the grant amount. Shorter terms apply to smaller grants.
• Repayment triggers. If you sell the property, stop living on site, raise rents above the affordable threshold, or otherwise violate the program terms before the forgiveness period ends, you may be required to repay a prorated portion of the grant. The repayment amount decreases over time as you approach the end of the term.
• Disbursement. Grant funds are typically disbursed in phases tied to construction milestones, similar to how a construction loan works. This ensures the money is used for its intended purpose.

Application Process

The Plus One ADU Program application is administered by local agencies rather than directly by the state. In Suffolk County, the primary administering agencies include Community Development Long Island (CDLI) and the Long Island Housing Partnership (LIHP). Here is the general process:

1. Contact the local administering agency. Reach out to CDLI or LIHP to confirm that your town is currently accepting applications and to request the application package. Your contractor can often facilitate this initial contact.
2. Complete the application. The application requires information about your property, your income, your proposed ADU project, and construction cost estimates. You will need to provide proof of homeownership, income documentation, and a project description.
3. Submit construction plans and estimates. Include architectural drawings or detailed plans for the ADU, along with at least one contractor estimate. Having a licensed contractor's estimate strengthens your application.
4. Environmental and compliance review. The administering agency reviews your application for environmental compliance, zoning eligibility, and program fit. This may include a site visit.
5. Grant approval and agreement. If approved, you sign a grant agreement that outlines the terms, forgiveness schedule, and your obligations as a property owner. This is a legally binding document.
6. Construction and inspections. Build the ADU using a licensed contractor. The administering agency may conduct progress inspections and will verify completion before releasing final funds.
7. Tenant placement and ongoing compliance. Rent the unit to an income-qualified tenant at the approved rate. You will need to certify compliance annually throughout the forgiveness period.

The application timeline from submission to approval typically ranges from 8 to 16 weeks. Starting the process early, ideally while you are still in the design phase of your ADU, is strongly recommended.

Other ADU Financing Options

Not everyone qualifies for the Plus One grant, and the grant may not cover the full cost of larger ADU projects. Here are other financing options Long Island homeowners use:

• Home equity loan. A fixed-rate loan against the equity in your home. Good for homeowners who have built substantial equity and want predictable monthly payments. Interest rates are typically lower than personal loans or credit cards.
• Home equity line of credit (HELOC). A revolving credit line secured by your home equity. HELOCs offer flexibility since you only draw what you need and pay interest on the outstanding balance. Useful for projects where costs may fluctuate.
• Construction loan. A short-term loan specifically designed for building projects. Funds are disbursed in draws as construction progresses. After completion, the loan typically converts to a standard mortgage or is paid off with permanent financing.
• Cash-out refinance. Refinancing your existing mortgage for more than you owe and using the difference to fund ADU construction. This makes sense when interest rates are favorable relative to your current mortgage rate.
• Personal savings. For smaller projects like garage or basement conversions that fall in the $50,000 to $100,000 range, some homeowners fund the project entirely from savings, avoiding interest costs altogether.

How Much Does an ADU Cost on Long Island?

Understanding construction costs puts the $125,000 grant into perspective. ADU costs on Long Island range widely depending on the type of project:

• Garage conversion: $50,000 to $100,000
• Basement conversion: $50,000 to $100,000
• Above-garage apartment: $80,000 to $150,000
• Detached new construction: $150,000 to $250,000+

For a garage or basement conversion, the Plus One grant could cover the entire project cost. Even for more expensive detached builds, $125,000 covers 50 to 80 percent of the total. This makes the economics of ADU construction dramatically different than paying entirely out of pocket. Read our complete ADU cost guide for detailed pricing breakdowns.

Why This Grant Is a Game-Changer

The Plus One ADU Program fundamentally changes the financial equation for Long Island homeowners considering an ADU. Here is why it matters:

• Eliminates the biggest barrier. The number one reason homeowners hesitate on ADU construction is cost. A forgivable grant of up to $125,000 removes or dramatically reduces that barrier. For conversions, it can cover the entire build. For new construction, it covers the majority.
• You still collect rental income. Even at the below-market rates required by the program, a one-bedroom ADU in Suffolk County generates $1,200 to $1,800 per month in affordable rent. That is $14,400 to $21,600 per year in income on a unit you may have built for free.
• Property value increases regardless. A legal, permitted ADU adds 15 to 35 percent to your property's appraised value. That increase applies whether you are renting at market rate or at the affordable rate required by the program. When the forgiveness period ends, you can rent at market rate or continue at affordable rates.
• You are helping your community. Long Island's housing crisis is real. Teachers, nurses, first responders, and service workers increasingly cannot afford to live in the communities they serve. Your ADU provides a home for someone who needs one, and you get paid for it.

At Alec's Construction, we have helped homeowners across Suffolk County navigate the Plus One application process while building high-quality ADUs. We handle the construction, and we can connect you with the administering agencies that process grant applications. Learn about Suffolk County's ADU regulations to understand the zoning requirements in your town.