The General Laws are hereby amended by inserting after Chapter 121G the following chapter: Chapter 121H Accessory Dwelling Unit Fund

Section 1. Definitions

"Accessory Dwelling Unit," as defined in MGL Chapter 40a Section 1a

"Eligible Participant," property owner who has an income of up to 110% of the area median income, as defined by the United States Department of Housing and Urban Development

"Fund," the Accessory Dwelling Unit Fund established in section 2

Section 2. There shall be an Accessory Dwelling Unit Trust Fund to support low- and moderate-income property owners whose incomes are not more than 110 per cent of median income as determined by the federal Department of Housing and Urban Development build an Accessory Dwelling Unit. The fund shall be administered by the Executive Office of Housing and Livable Communities or through contracts with 1 or more of the following administering agencies: (i) the Community Economic Development Assistance Corporation, established in chapter 40H; (ii) the Massachusetts Housing Partnership Fund, established in section 35 of chapter 405 of the acts of 1985; or (iii) the Massachusetts Housing Finance Agency, established in chapter 708 of the acts of 1966; provided, that an administering agency may directly offer financial assistance for the purposes pursuant to this section or may enter into subcontracts with non-profit organizations established pursuant to chapter 180 for those purposes; and provided further, that the administering agency may establish additional program requirements through regulations or policy guidelines.

Section 3. There shall be credited to the fund: (i) revenue from appropriations or other money authorized by the general court and specifically designated for the fund; (ii) any gifts, grants, private contributions, repayment of loans, fees and charges imposed relative to the making of loans, grants, subsidies, credit enhancements and other financial assistance; (iii) any investment income earned on the fund’s assets; and (iv) any other sources. Money remaining in the fund at the end of a fiscal year shall not revert to the General Fund.

Section 4. Funds expended pursuant to this chapter may be in the form of grants, loans or other financial assistance to eligible participants to build an accessory dwelling unit by providing reimbursement or an initial outlay of funds to cover pre-development and non-recurring closing costs associated with building an Accessory Dwelling Unit, which may include, but shall not be limited to, architectural and design costs, site preparation, such as clearance or landscaping, utility connection fees, impact fees, permitting fees, or other services and activities determined by the administering agency to be a pre-development or non-recurring closing costs; provided, however, that assistance shall be the minimum amount necessary to make a project feasible. 

Funds expended pursuant to this chapter may finance low and no interest loans, grants, subsidies, credit enhancements and other financial assistance as determined by the administering agency for the purpose of supporting the construction and development of Accessory Dwelling Units; provided, however, that assistance shall be the minimum amount necessary to make a project feasible. 

Section 5. The Executive Office of Housing and Livable Communities may promulgate regulations for the implementation, administration and enforcement of this chapter and may, in consultation with the Executive Office of Economic Development, issue guidelines for the fund.