Charlotte Launches $80K Forgivable Loan Program for Building ADUs

[Pat Rineman]

Hey BP Community,

The City of Charlotte just rolled out a new initiative — the Queen City ADU Program — that could be a game-changer for local housing and for investors keeping an eye on this market.

Quick highlights:

• 🏡 Up to $80,000 in forgivable, interest-free financing to build an ADU (detached or attached).

• 👨‍👩‍👧‍👦 Eligible for both owner-occupants and non-occupant property owners within city limits.

• 📏 ADU must be no more than 50% of the main home (capped at ~1,000 sq. ft. for detached units).

• 💰 Affordability strings attached: must be rented to tenants at or below 80% AMI, with rent caps tied to FMR at 70% AMI.

• 📉 Loan forgiveness at $10K per year of affordability (8 years total), or up to $15K/year if you house voucher holders or tenants referred by city housing partners.

• 🔑 Only one ADU per lot allowed.

Why it matters:

• Charlotte is under major housing pressure, and this is a way the city is incentivizing “gentle density” without rezoning entire neighborhoods.

• For investors, it creates a structured pathway to add a unit with city support — though the affordability requirements and rent caps may limit cash flow potential compared to market-rate rentals.

• On the flip side, the forgiveness structure (essentially free capital if you comply) could offset the reduced rental income.

My take: This could work best for buy-and-hold investors who don’t mind playing in the affordable space and are looking for long-term, low-cost additions to their portfolio. It might be less attractive for those focused on maximizing market rents or STRs.

Curious what you all think:

• Would you consider building an ADU under these terms?

• Do you see this more as a wealth-building opportunity or more of a social impact play?

• How would you underwrite the trade-off between the capped rents and the forgivable loan?

Here’s the official city info if you want to dive deeper: Queen City ADU Program