The Farmhouse-to-Workforce Housing Act of 2025
The Farmhouse-to-Workforce Housing Act of 2025 would amend the Housing Act of 1949 to allow Housing Preservation Grants (the Section 533 program) to be used to fund accessory dwelling units (ADUs) on or near single-family homes. The bill sets specific rules for how much funding can be used for ADUs, cost-sharing limits, and program safeguards to encourage creation of small, self-contained units that can house workers while preserving existing housing. It also creates inflation-linked Adjustments, establishes annual funding caps and administrative cost limits, and imposes occupancy and ownership conditions on grant recipients to ensure long-term stewardship of the dwelling units. The act defines an ADU as a self-contained unit located within, attached to, or detached from a single-family dwelling on the same parcel. In practical terms, the bill aims to channel federal grants toward expanding workforce housing by adding ADUs to existing homes, with caps on assistance, requirements on owner occupancy and income, and a framework for how much money can be directed to these projects each year and how any excess funds would be redirected to states. It also requires grant recipients to limit administrative costs and enumerates permissible and prohibited uses of grant funds.
Key Points
- 1The bill authorizes using Housing Preservation Grants to provide loans or grants specifically for accessory dwelling units (ADUs) and sets a 50% cap on how much of an ADU’s total cost can be funded, with a hard cap of $100,000 per ADU (adjusted for inflation after 2026).
- 2For single-family housing under this section, any project must involve homes at least 25 years old, with individual grants not exceeding $200,000, and grantees must devote at least 75% of total assistance to single-family housing activities (the remainder could support ADUs).
- 3Funding and inflation: the $100,000 ADU cap is adjusted annually for inflation using CPI increases after 2026. The bill also places a ceiling of not more than $16,000,000 (inflation-adjusted) that can be allocated in a fiscal year under this section; any excess funds in a year are redirected to states that have committed to passing funds to grantees within the state.
- 4Ownership, occupancy, and duration: owners receiving assistance for ADUs must reside in the primary home (or in an ADU), maintain ownership of the home and ADU, ensure ADUs are not leased for less than 6 months, and have household income not exceeding 150% of the area median income. These requirements last for five years after the final ADU is available for occupancy or until the owner dies, whichever occurs first. If the owner fails to meet these conditions, the owner must repay the full amount of assistance.
- 5Administrative costs: recipients may use up to 20% of funds for administrative costs, with specific allowances (salaries, staff, office expenses, training, audits, travel, landlord education, etc.) and a list of prohibited uses (planning beyond project needs, buying property from recipients, pre-grant expenses, non-topic political activities, etc.).
- 6Funding authorization and definition: the bill authorizes $200,000,000 to the Secretary to carry out this section, available until expended. An ADU is defined as a self-contained unit within, attached to, or detached from a single-family dwelling on the same parcel.