NY A01401

Establishes an accessory dwelling unit (ADU) forgivable loan program administered by the Division of Homes and Community Renewal to provide financial incentives for creating ADUs on owner-occupied properties.

Provides forgivable loans up to $75,000 or 50% of eligible project costs (whichever is less) with a 20-year term at prevailing market interest rates, fully forgiven if the ADU is rented to income-qualified tenants for the entire 20-year period.

Requires ADU tenants to have income not exceeding 100% of the state mortgage agency's low-interest loan program limits and rent limited to 70% of area median income (AMI), with no income restrictions on property owners.

Creates a state income tax credit of up to $10,000 annually equal to 50% of the difference between market-rate rent and the affordable rent charged under the program guidelines.

Authorizes counties, cities, towns, villages, and school districts to adopt local property tax exemptions for the increased assessed value attributable to affordable ADU improvements, with applications requiring a recorded legal instrument securing the income and rent restrictions.