Building an ADU or secondary suite in the Waterloo Region just got more affordable. Multiple levels of government now offer grants and incentives to encourage homeowners to create additional housing units. Here’s what’s available as of spring 2026.

City of Waterloo ARU Grant Program

Interior ARU (basement apartment, converted space within existing home): up to $20,000

The City of Waterloo launched its Additional Residential Unit grant program to encourage homeowners to create legal rental units. The grant covers up to 50% of project costs for interior ARUs, to a maximum of $20,000.

Eligibility requirements and program details are available at waterloo.ca or by emailing ARU@Waterloo.ca. The program has limited annual funding, so early application is recommended.

Region of Waterloo Secondary Suites Program

Up to $25,000 forgivable loan

The Region of Waterloo offers up to $25,000 through its Secondary Suites Program (part of the Ontario Renovates initiative) for homeowners who create a secondary suite and rent it at an affordable rate for 15 years. The loan is forgiven over the 15-year period — meaning if you maintain the affordable rental rate for the full term, you don’t repay anything.

The program is designed to increase affordable rental housing stock in the region. Eligible projects include basement apartment conversions, attached secondary suites, and other ARU configurations.

City of Cambridge

Cambridge has offered ADU grant programs in the past to encourage secondary suite construction. Program availability varies by year and budget allocation. Contact the City of Cambridge planning department for current program status.

City of Kitchener

Kitchener has not had a standalone ADU grant program as of early 2026, but homeowners in Kitchener can apply for the Regional program. Check with the City of Kitchener planning department for any new municipal incentives.

Federal and Provincial Incentives

The federal and provincial governments have announced plans to remove HST from new homes up to $1 million for first-time buyers. While this primarily targets new home purchases, it signals a broader government commitment to housing affordability that may expand to include ADU incentives in the future.

How to Maximize Your Grants

Apply early. Most programs have annual funding caps. Once the money is allocated, the program closes until the next fiscal year.

Stack where possible. The city and regional programs have different criteria, so you may qualify for both on the same project — potentially $45,000 in combined grants.

Work with a contractor who knows the programs. Grant applications require specific documentation including cost breakdowns, drawings, and compliance evidence. A design-build contractor experienced in ADU construction can prepare this documentation as part of the project.

Frequently Asked Questions