ADUG Frequently Asked Questions

What is ADUG?

ADUG is the acronym for the Accessory Dwelling Unit Grant Program in DOLA’s online grant portal system. 

Who is eligible to apply for grant funds?

Local governments that are designated as an ADU Supportive Jurisdiction are eligible to apply. This includes municipalities, counties, and tribal governments that have been certified as ADU Supportive Jurisdictions. 

If residents are interested in funding for ADUs, the Colorado Housing and Finance Authority (CHFA) will offer funding opportunities in ADU Supportive Jurisdictions beginning in late 2025.

Can my community become eligible for grant funds even if we’re not subject to HB24-1152?

Yes. HB24-1152 applies to 67 local governments, but any jurisdiction may opt in and voluntarily comply with HB24-1152 to become eligible for the grant program and CHFA’s funding opportunity. 

What is the process for becoming a certified ADU Supportive Jurisdiction?

To be designated as an ADU Supportive Jurisdiction, local governments must submit a report showing compliance with 29-35-403 of HB24-1152 and implement at least one strategy from a menu provided by DOLA encouraging construction or conversion of ADUs. You can apply to be an ADU Supportive Jurisdiction through the Land Use and Housing Implementation Portal. Contact DOLA staff to learn more about the ADU Supportive Jurisdiction certification process.

How do we know if our jurisdiction is subject to the requirements of HB24-1152?

Information about subject jurisdiction requirements is on the DOLA site, but an overview of the requirements is shared below in the bulleted list. 

• By June 30, 2025, a Subject Jurisdiction must allow one ADU as an Accessory Use to a Single-unit Detached Dwelling in any area, lot, or parcel where the jurisdiction allows Single-unit Detached Dwellings.
• The ADU must be allowed to be either internal to, attached to, or detached from the Single-unit Detached Dwelling.
• Applications for ADUs must be reviewed through an Administrative Approval Process that does not include a public hearing. Approval or denial must be based on compliance with Objective Standards included in the land use code or other ADU regulations.
• The land use code and/or architectural design standards may not include Restrictive Design or Dimension Standards. These requirements apply to all lots that allow the construction of Single-Unit Detached Dwellings regardless of whether the lot or parcel is located in a standard zone district, overlay zone district, or a Planned Unit Development, and regardless of whether restrictive declarations, bylaws, or rules of an HOA prevent ADUs.

Additionally, jurisdictions are encouraged to contact the Technical Assistance team to request a courtesy review of their land use code and ADU policies.

Can two or more jurisdictions partner on a grant application or project?

Yes, if the applicants are both certified by DOLA as ADU Supportive Jurisdictions.

How long will grant agreements be open for?

Grant agreements will be set for two years to allow sufficient time for project completion and full expenditure of funds.

Can the ADUG program fund mortgage rate buydowns?

No. ADUG cannot fund mortgage rate buydowns. Per HB24-1152, The Colorado Housing and Finance Authority (CFHA) will have funding available through lenders to support ADU development. We will share information related to CHFA’s ADU-related funding opportunities as soon as they become available. 

Can this program fund ADUs that are designated to be short-term rentals?

No. The intent of the ADUG program is to fund the construction of new ADUs that are used as long-term rentals (six months or longer). Applications that support the creation of long-term rentals and respond to locally demonstrated housing needs will be more competitive.

Can this program fund ADU-specific technical assistance and education for homeowners and developers?

Yes. The ADUG grant can fund technical assistance and education programs specific to ADU construction, permitting, financing, or other aspects of ADU development.

What is the match requirement?

A minimum of 25% local cash match of the total project cost is required. The specific match amount is listed in grant agreements. Local match may include a financial commitment from partners (e.g., COGs, housing authorities).

What can be counted as matching funds? Only eligible ADUG costs paid by the grantee using non-DLG funds can be counted as matching funds. In-kind match (e.g., staff time) does not count towards the match requirement. Please note that any costs that are ineligible for reimbursement cannot be used to meet match requirements.

How do we calculate local match?

The 25% match amount is based on 25% of the total project cost, not 25% of the grant request amount. The table below shows two different examples where the grant request reflects 75% of the total project cost, while the local match represents 25% of the total project cost.

Grant awards will be made in whole numbers. Figures in your budget should generally be rounded up to reflect the project cost in whole numbers.

Most projects will have only one budget line item (consultant services).

The application includes space for a budget narrative description and a project budget worksheet. The budget narrative should describe and explain how funds will be spent.

If we apply for fee waiver/reduction funds, does the $15,000 per ADU cap apply to ADU development funded by this grant?

HB24-1152 requires that requests for funding to support ADU financial assistance be limited to no more than $15,000 per ADU permitted by the local government. The amount an applicant may request is limited to $15,000 per ADU previously permitted between May 13, 2024 and October 3,2025. 

The $15,000 per ADU limit only applies to the amount that can be requested, not the way a jurisdiction distributes it.  For example, if a jurisdiction previously permitted ten ADUs, they could request up to $150,000 and choose to apply funds in a tiered manner to incentivize locally identified housing needs such as specific income limits or workforce restrictions. However, the jurisdiction may apply awarded funds in amounts greater than or less than $15,000 per ADU.

The grant language refers to converting ADUs. Does this apply to converting existing ADUs to be compliant with code updates?

No. “Converting ADUs” in the grant scope refers to converting an existing space into an ADU. For example, converting a garage or basement space to an ADU.

What constitutes a robust and inclusive community engagement or outreach process?

Robust and inclusive engagement and outreach deliberately seeks to include as many groups as possible, makes engagement opportunities accessible and flexible, and creates trust. This will look different for every community, but at minimum, should include targeted communication to reach underrepresented groups, offering multiple participation methods, and, where possible, scheduling public meetings at a variety of times and locations to allow for maximum participation. Some communities may also seek translation or interpretation services if a large proportion of their constituents have a primary language besides English. 

Does the official action have to be completed at the time of application?

No. If the official action is not completed at the time of application, It is acceptable to explain in the grant application that official action is scheduled after the application deadline but will occur before the grant award. Evidence of official action must be provided before the grant award can be made. In this scenario, documentation of official action must be provided to DOLA staff as soon as it becomes available.