Rockland Voters Approve $10 Million Housing Bond to Drive Development and Reduce Tax Burden

Update: Rockland recently updated their program so that the (up to) $10,000 incentive grant now applies to Bangor Savings Bank home equity loans, as well as construction loans. And the income limits for eligibility were eliminated. Learn more here.

On June 3, 2025, Rockland residents made a bold and forward-thinking choice by passing a $10 million housing bond aimed at addressing the city’s growing need for housing. Becoming the first municipality in Maine to ever secure a bond dedicated to housing. The initiative represents a major local investment in Rockland’s future—designed not only to create new homes but to strengthen the local economy, attract private investment, and potentially lower the city's tax rate over time. 

Unlike typical borrowing measures that can increase municipal debt pressure, this bond is structured as phased borrowing, which means funds will be drawn incrementally as projects are ready to move forward. This approach helps to minimize financial risk while ensuring that progress keeps pace with capacity and demand.

What makes this bond particularly compelling is its self-sustaining potential. New housing developments funded through this initiative are expected to significantly increase Rockland’s property tax base. In fact, projections show that if new development generates more than $2.5 million in taxable value per $1 million borrowed, the bond could actually lead to a net reduction in the city’s overall tax rate. This performance-based return makes the housing bond both a smart investment and a fiscal win for Rockland taxpayers.

The city’s housing task force plans to work through the summer with its housing planning consultant to make a plan for the bond funds. The city is immediately allowed to spend funds on infrastructure, and is considering making a change to its charter in order to invest in privately owned housing projects, which would allow Rockland to work proactively with developers and nonprofit partners to shape the type, scale, and affordability of new housing—rather than relying solely on outside market forces. This positions the city to attract matching private investment, strengthen its workforce housing supply, and ensure a resilient and inclusive future for residents of all income levels.

Rockland's housing bond is more than a public finance tool—it’s a statement of intent to grow with purpose, equity, and sustainability. And a model for small to medium-sized communities across the state and country.

Liz Trice – Partnerships Director, Backyard ADUs

Liz Trice brings a strong background in community development, policy advocacy, and coalition-building to her role at Backyard ADUs. With a passion for housing innovation and local empowerment, she works to bridge the gap between municipalities, nonprofits, and private partners to advance sustainable ADU development across New England. Elizabeth is committed to creating collaborative solutions that expand housing options while preserving community character. At Backyard ADUs, she leads strategic initiatives that help towns unlock funding, navigate zoning reform, and build programs that serve real people in real neighborhoods.

Updated Freddie Mac Guidelines For ADU Financing Help Homeowners

Financing for Accessory Dwelling Units (ADUs) has become more streamlined, thanks to updated Freddie Mac guidelines. Aimed at making ADU appraisal and income verification clear, Freddie Mac’s Appraisal Checklist helps determine ADU eligibility by specifying requirements such as a separate entrance, independent utility, and rental market comparables.

The updated FHA policies for ADUs introduce several financial benefits:

• Rental Income Consideration: Up to 75% of estimated ADU rental income can qualify certain borrowers for FHA-insured mortgages, enhancing access to ADU-inclusive homes.

• Rehabilitation Financing: Borrowers can use 50% of expected rental income from a new ADU to qualify for FHA’s 203(k) program, supporting garage or basement ADU conversions.

• Appraisal Requirements: ADU-specific guidelines for appraisers help refine ADU valuation.

• New Construction: FHA allows financing ADUs in new construction projects, boosting ADU availability.

This means that when an ADU is part of a primary residence, rental income from it can now support loan qualification with Freddie Mac, provided zoning and market analysis requirements are met. These changes align with HUD's latest initiatives to expand affordable housing through ADUs​.

For more information, check out the Freddie Mac checklist and HUD’s recent announcement.

How to sell your backyard (Video)

Homeowners don’t need to subdivide their properties in order to sell part of it!

Across New England, there are countless in-town properties that can’t officially be subdivided, but have plenty of space for another detached home to be constructed on it. Backyard ADUs has developed a strategy that allows homeowners to sell the “right to build” a small home in their excess yard space.

We use Condominium law to make this possible. Condo bylaws serve as an overlay to city records and legally divide a property into two distinct assets and properties. They allow a property to be split right down the middle without applying for a formal subdivision. Cool.

With this strategy, a homeowner can receive a lump sum payment for their unused yard space and be part of the solution in helping create more quality housing. And, get an awesome new neighbor.

Watch Our Recent Webinar to Learn More:

How to Plan Your Backyard Home (ADU) Project

How to Plan Your Backyard Tiny Home Project:

First, let us define what we mean by “backyard tiny home” because we are not talking about “tiny homes on wheels” that don’t come with a plan for last night’s dinner...

What’s the difference between this two tiny homes?

This could be a legal backyard home.

The difference goes beyond the visible wheels.

A backyard tiny home is a residential building code compliant structure often referred to as an Accessory Dwelling Unit (ADU), granny flat, backyard cottage, micro-cottage or even a casita in Southern California. The homes are typically smaller than the existing “big” home on the property, making them relatively tiny. Often they can be up to 900 SF, much bigger than the ~150SF homes seen on Tiny House Nation. 

However, the biggest difference between what we build and the image you may have in your mind is that a backyard home must home comply with state building codes.  This means it’s secured to a foundation, connected to utilities (sewer, water, electric), and is thoroughly insulated like a normal, standard house. (And, in fact, with the ADUs we build, it will probably be much better insulated than your current home.)

Interestingly, this does not mean that it can’t also be street legal. This will be the subject of another post. 

Ok – Moving on to the purpose of this article. How does a homeowner plan and then build a backyard tiny home in New England?

Step One: How will you use the backyard tiny home?

Nobody starts a project like this without a good reason for doing it. I (Chris Lee) have been blown away by the number of different ways homeowners are planning to use a backyard home. Here are a few of the more common uses:

Aging Parents: 

The biggest increase in renters and single-member households are seniors, who are also known as somebody’s grandparents. These grandparents are using new zoning bylaws to build a separate home (aka, “detached ADU”) on their children’s properties to save money and be closer to their family. Until recently most of these dwelling units had to be attached to the existing home. That has changed, which makes this option more palatable. We’ve heard families call these homes close, but not too close. 

Parents Helping Adult Children: 

Given the high cost of housing, construction, and land many children cannot afford to live in the communities in which they grew up. Aging parents have begun downsizing into their backyards and selling their old “big” house to their children.

Caring For People With Disabilities: 

There is a huge population of adults with a disability that could live independently if they stayed close to family. A backyard home creates the opportunity to give these persons their own space, the dignity of their own front door and keep their family close enough to provide love and care. 

Veterans Housing Veterans: 

There is an ENORMOUS opportunity to house pair Veteran homeowners with Veterans that are either homeless or having trouble finding a safe, comfortable place to live. Beyond housing, this approach to providing Veteran housing would create opportunities for mentorship and help Veterans integrate back into their communities. 

Full-Time Office & Part-Time Guest House: 

For those of us that work from home a backyard home can act as an office and guest house. When family or friends come to visit the office can be set up as a guest house. In most towns, it can even be used for Short Term Rentals, which create the opportunity to completely offset the cost of the space.

As a Rental Unit: 

We are in a housing crisis and every backyard has the potential to help alleviate it and generate income for the property owner. Backyard homes can be built to rent to tenants and often produce a CAP rate over 10, which is virtually unheard of in today’s real residential estate market without excessive risk. If the homeowner is willing to rent the home to someone with a disability or senior, they may be eligible for $50,000 at 0% interest that does not need to be repaid until the home is sold.

Step Two: What Can You Build?

Homeowners should determine what they can build on their property before worrying too much about the cost and how to finance construction. 

It is tempting for people to simply call their local planning department and ask “How can I build a backyard home?” 

But it will serve you a great deal more to do some research on your own first, including taking a look at your town’s ADU regulations. This will allow you to prepare more specific questions and help you get the most out of your local planners’ expertise. Some examples of questions you might have are:

• Could you show me where I can get more information about the rules for building an accessory dwelling unit on my property?

• Just to confirm, if my ADU is <20’ tall can it still be placed directly on a side lot line?

There is also an enormous amount of information on our website (https://backyardadus.com), including links to the ADU rules of many towns. Read on to see an overview!

Free Resources provided by Backyard ADUs:

We (Backyard ADUs) have spent countless days aggregating and converting local zoning bylaws into plain English to help homeowners begin their process. You can look for your city here, and if we haven’t created a page for your town yet let us know!  

We have also created D.I.Y. property evaluation guides that will walk you step by step on how to determine what you can build. Our team actually uses these guides when we create our custom property reports. 

If you want to dig into your town zoning bylaw independently, here is what to look for:

The ADU bylaw 

Towns in New England will title their ADU section as “Accessory Apartments,” “Supplemental Apartments,” and “Accessory Dwelling Units”. When reviewing this section you must confirm whether a “detached” ADU is allowed, review the restrictions, and what the permitting process consists of. 

Set Backs

Each zoning bylaw has a section that defines how close a structure can be built to neighbors. Set back requirements are different per zoning district and can be found in separate tables often called “Area Regulations,” or  “Dimensional Regulations.” 

Accessory Structures

If a detached ADU is considered an accessory structure, you must review the rules for accessory structures in your town. These can include special set back rules, height restrictions, design requirements, and privacy barriers.

Parking Design:

If the ADU bylaw requires parking to be provided you will need to find the bylaw’s parking section. The zoning bylaw will define exactly how big a parking spot needs to be, where it can be located, and what materials can be used to build it. 

Open Space Requirements: 

Town zoning ordinances often define the maximum amount of ground that can be covered by structures. Zoning bylaws most commonly refer to this as “Building Coverage Ratios” or “Open Space Ratios.”

Environmental:

Environmental is probably the most difficult part to understand as the rules have some ambiguity and leave room for flexibility. The biggest items homes owners will see are related to restrictions on removing trees, drainage, and runoff. 

Step Three: Ballpark Construction Estimate

Once you know what you can build it’s time to get a ballpark number on construction cost. Unfortunately, a ballpark number is really difficult to get from a General Contractor. They don’t like providing these types of estimates for fear of being held to them later on and they simply don’t have time!  

When you do get in touch with a GC you will want to sound very confident about doing your project and your ability to pay for it. If you don’t, they will think you are “window shopping” and will not allocate the time to producing a quote. Additionally, don’t be afraid to follow up about the quote once per week until you have it. 

Backyard ADU provides fixed prices for our ready-to-build homes, with our standard specs on typical lots to save you time. Check Backyard ADUs prices.  

Step Four: Financing Options

First off– financing should not be a reason not to do a backyard home project. I (Chris Lee) have a background in Real Estate Financing and there are so many creative strategies to paying for a backyard home. I have also been blown away by how many publicly funded options are available in Massachusetts to help people with disabilities and seniors age in place.

Cash:

If you are consolidating households the proceeds from a home sale can be used to fund the construction of the new home. 

Massachusetts’ Home Loan Modification Program: 

$50,000 at 0% interest with no repayment due until the home is sold. This funding is available to help modify a home (building a backyard home counts) for people with disabilities or to help seniors age in place. An accessible backyard home does count as a modification. 

See state website

Reverse Mortgage: 

This option is available for seniors. It can be an extremely attractive option for cash strapped seniors that are trying to downsize. Funds from a reverse mortgage can be used to construct the backyard home, after which, the senior could rent out or even sell their old primary home to generate much-needed cash flow.

FHA “Home Style Renovation” Loan: 

This is a construction loan that allows homeowners without excellent credit to do renovations on their properties and still get 30-year financings and the low-interest rates associated with mortgages. 

Cash-Out Refinancing:

This is a traditional mortgage refinancing where the homeowner takes out a new mortgage on their home, resets the payment schedule and withdraws cash from their home’s equity. Depending on how much equity is in your home, your current interest and original loan balance, you could withdraw a significant amount of money without changing the mortgage payment. 

Home Equity Line Of Credit:

This is a line of credit secured by your house to keep the interest rate more affordable. This option has a higher interest rate than home refinancing and shouldn’t be used to pay for the entire backyard home project.

Self Directed IRA: 

An IRA can be used to invest in real estate. By setting up a self-directed IRA, a homeowner could potentially use funds from their IRA to build an ADU as an investment property. This option is somewhat experimental as it is a brand new concept and requires a third-party custodian to keep careful documentation about rental income and expense.  

Step Five: Permitting & a trip to the Town Hall

If your town allows backyard homes by right (Northampton, Great Barrington, Montague, Plainfield and much of Cape Cod), your general contract just needs to pull a building permit as if an addition was being constructed. 

If your town requires a special permit to build an ADU expect 2-4 months of waiting and a public hearing to review your application. This step usually sucks and can take months. It can be intense and challenging. It will be important to prepare extensively for this type of hearing and it is extremely helpful to communicate with your neighbors to gauge opinions and prevent unnecessary angst during the meeting which can cause delays. 

Step Six: Construction

Finally, with a  permit in hand, you can build. Depending on what construction methodology you chose, active construction could last anywhere from 2 weeks to 2 months with modular construction being on the shorter time frame.

Want someone else to do all the work?

In case you were wondering, Backyard ADUs is able to help homeowners beginning right at step one in this process. Getting a backyard home planned, approved, and built can be a daunting DIY project. At Backyard ADUs we love to help you get started early on, and can, of course, see you all the way through to completion.