Durham Affordable ADU Loan Pilot Program Lottery Application

The City of Durham’s Housing & Neighborhood Services Department, in partnership with Coram Houses, LLC, is launching the Affordable ADU Loan Pilot Program. This pilot program provides low-interest construction loans to eligible Durham homeowners to build Accessory Dwelling Units (ADUs) that will remain affordable for 30 years. Funded under the Forever Home, Durham affordable housing initiative, the program will deploy $1.75 million with the goal of producing approximately 20 affordable ADUs citywide. ADUs increase housing supply without displacing residents and allow homeowners to generate rental income.

What Is an ADU?
Under the City of Durham Unified Development Ordinance (UDO), an Accessory Dwelling Unit (ADU) is a secondary dwelling unit located on the same lot as a primary dwelling. The unit contains independent living facilities and may be located:

Within the primary structure (attached), or
In a separate structure on the same lot (detached)

Accessory dwelling units are subject to specific zoning and development standards in the Unified Development Ordinance, including limits on size, location on the lot, and other design requirements.

Program Overview - Key program terms include:

Anticipated Average Loan Amount: Up to $80,000
Interest Rate: 2% fixed
Loan Term: 30 years (fully amortizing)
Affordability Period: 30 years
Tenant Income Limit: 80% Area Median Income (AMI) or below
Target Production: Approximately 20 units

In exchange for receiving the loan, homeowners agree to rent the ADU at an affordable rate to income-qualified tenants for 30 years.

Homeowner Eligibility - To qualify, applicants must:

Own and occupy a property within Durham city limits
Maintain a minimum credit score of 580
Be current on property taxes and mortgage obligations
Have a permit-ready site
Agree to execute a 30-year recorded Affordability Covenant

Additional underwriting criteria apply. Please refer to the Program Manual for complete requirements.

Property Requirements - The property must:

Be zoned to permit ADU construction under Durham’s Unified Development Ordinance
Have adequate lot size and setbacks
Have access to public water and sewer
Have no unresolved code violations
Maintain a clear title and active homeowner’s insurance

Note: Coram Houses will review each application to ensure the property meets the requirements

Application & Selection Process
Applications are accepted on a rolling basis until each lottery date. All eligible applicants will be entered into a stratified lottery designed to promote equitable distribution of program benefits. Categories include:

Tier A (6 winners): Homeowner household income at or below 80% AMI
Tier B (2 winners): Homeowner household income between 80% and 120% AMI
Tier C (4 winners): Property located in a formerly “redlined” area* (Grade C or D), as defined by Home Owners’ Loan Corporation (HOLC)
Tier D (4 winners): Property operating for certain civic uses permitted to construct an ADU under Section 5.4.2 of the UDO
Tier E (2 winners): Duplex ADU project (4 total units)

*For a map of the formerly "redlined" areas in Durham, click here.

Selected applicants will proceed to underwriting review and final City approval before loan closing.

Rental & Affordability Requirements - For 30 years:

ADU tenants must earn 80% of the Area Median Income (AMI) or below
Rent must comply with published program limits
Annual income certifications are required
Affordability Covenant restrictions are recorded and run with the land

Builder Options - Homeowners may select:

Option A: The Gerrard (Coram Houses will serve as the general contractor, and the $80,000 loan will cover all costs), or
Option B: Other ADU Design and meet two of the following requirements:
- Have access to financing for costs above the $80,000 loan amount AND
- A licensed NC General Contractor with stamped, permit-ready architectural drawings OR
- Select Coram to serve as the NC-licensed general contractor and provide stamped, permit-ready architectural designs

Privacy & Security - Key security features of the Durham ADU application:

Secure transmission - All information submitted through this application is protected with 256-bit SSL/TLS encryption, the same standard used by banks and other secure websites. This encrypts data as it travels between your device and the form, so it cannot be intercepted in transit.
Independently audited security - The company that hosts this application, JotForm, operates in a SOC 2 Type II–audited environment, meaning its systems and data-handling practices have been independently evaluated against established standards for security, availability, and confidentiality.
Protected document storage - Documents uploaded as part of the application—such as pay stubs, property records, or other required materials—are stored in secure cloud infrastructure, helping protect applicant information as it is submitted and processed during the intake process.

For more information on the City of Durham's Affordable ADU Loan Pilot Program, please visit: https://www.durhamnc.gov/5527/ADU-Pilot-Program. To apply for the program, please complete the application below.

Individual homeownerCivic institution permitted to construct and ADU under Section 5.4.2 of the UDO

Prefix

First Name*

Middle Initial

Last Name*

Suffix

Title*

Organization*

Phone*

Please enter a valid phone number.Format: (000) 000-0000.

Email*

example@example.com

Date of Birth*

Mailing Address*

Street Address

Street Address Line 2

CityStateZip CodeCountry

Household Size*

e.g. 3

Annual Household Income*

e.g. $85,000

How long have you lived in Durham? (years)*

YesNo

Property Address (If different from mailing address)*

Street Address

Street Address Line 2

CityState / ProvincePostal / Zip CodeCountry

How long have you owned this property? (years)*

Option A: The Gerard (Coram as General Contractor, $80,000 loan covers all costs)Option B: Other ADU Design (Applicants must provide additional funding for costs above the $80,000 loan and choose a general contractor)

I have access to financing for costs above the $80,000 loan ANDI have an NC-licensed general contractor and stamped, permit-ready architectural drawings ORI would like Coram to be my NC-licensed general contractor and provide stamped, permit-ready designs

Option B: Design/Model (If you plan to work with Coram, write "Other Coram Design"

Option B: Estimated Total Cost (If Coram, include your estimated total budget)

e.g. $105,000

Option B: Financing Source for Costs Above $80,000

Option B: General Contractor (If Coram, write "Coram Houses")

Option B: General Contractor License Number (If Coram, you can leave this blank)

Number of ADUs to Build*

Yes

No

Estimated Property Value*

e.g. $275,000

Current Mortgage Lender

Approximate Mortgage Balance

e.g. $150,000

Monthly Mortgage Payment

e.g. $1,275

YesNo

Insurance Provider

Why do you want to build an ADU? What does this mean to you and your household/organization?*

Who do you imagine living in your ADU?*

Are you comfortable being a landlord for an affordable rental?*

Photo ID for all owners on the title (For civic institutions, provide a photo ID for the individual submitting the application) *

Income documentation (pay stubs or benefits letters) - DO NOT submit documents containing your full Social Security Number. To keep the application simple and protect sensitive information, we only ask for recent pay stubs or benefit letters at this stage.*

Proof of owner-occupancy (utility bills, voter registration)*

Proof of homeowner’s insurance*

Stamped architectural drawings

Proof of supplemental financing or lender commitment

GC license and insurance certificates

Construction estimate or bid

If selected and approved, here's what the program asks of you:

Affordability Covenant. Rent the ADU to a tenant at or below 80% AMI, at a rent within HUD limits, for 30 years.
Deed of Trust. The loan is secured by a recorded deed of trust. The City of Durham is placed as a lien holder.
Annual Compliance. Submit tenant income and rent certifications each year to Coram.
Maintenance. Keep the ADU in a safe, livable condition.
Occupancy. The ADU must stay rented. If a tenant moves out, place a new qualified tenant promptly. Coram will help.

All information in this application is true and complete to the best of my knowledge.I authorize Coram Houses and the City of Durham to verify this information, including credit and title checks.I understand submission does not guarantee selection or loan approval.I have reviewed the design options and indicated my choice.I understand and agree to the program commitments as outlined above.

Name*

Type your name

Title*

Organization*

Signature (Please sign below)*

Date

Durham Affordable ADU Loan Pilot Program Lottery Application

What You're Agreeing To

Certification & Signature