Tiny homes may create opportunity

While President Trump was signing the GENIUS Act on July 18, a pair of congressmen were introducing legislation at the Capitol to create a government-backed loan program to finance the construction of accessory dwelling units, sometimes called “tiny homes.” I like this legislation and if it passes, an organization such as the Federal Home Loan Bank system might make a logical place to “house” the program. .As the parents of adult children looking to purchase a home, it is readily apparent to me there is an affordable housing shortage. An article in the Wall Street Journal recently reported the country is short roughly 4 million homes, with nearly a third of homeowners saying they are in homes they can’t afford. ADUs typically run from 600 to 1,200 square feet, and often are built or in the back yard of an existing standard home. The WSJ reported that 1.4 million such homes existed in the United States in 2020. Apparently, it is difficult to finance the construction of ADUs under current law. That seems like it should be a fixable problem.Of course, there is still municipal red tape to work through, as some communities have laws restricting or prohibiting this kind of housing. But, if it was easy to finance their construction, I am betting demand for ADUs would grow and municipal officials would grow more apt to create the regulatory environment to allow them. I encourage residential mortgage lenders to advocate for the advancement of this legislation. It’s a win for a financially strapped generation that needs additional housing options, and it’s a win for lenders who could help more people realize the American dream of owning a home, even if it is a tiny one.