The SUPPLY Act directs the Department of Housing and Urban Development to create a federal insurance program for second mortgages that help homeowners finance the construction of accessory dwelling units (ADUs)—additional residential units like basement apartments, guest houses, or converted structures on single-family properties. The program allows HUD to insure loans up to 30 percent of a standard home's value, with potential increases based on projected rental income from the ADU, and charges borrowers an annual insurance premium of up to 1 percent. The bill also permits government-sponsored mortgage companies Fannie Mae and Freddie Mac to purchase and resell these insured loans on the secondary market, potentially making financing more accessible and affordable. HUD must establish the program within two years of the bill's enactment and submit annual reports to Congress on its activities, though the Federal Housing Finance Agency director can halt purchases if market risks become excessive.
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