Basement Apartment Conversion Pilot Program

Administered by the New York City Department of Housing Preservation and Development (HPD), in partnership with Cypress Hills Local Development Corporation, a local non-profit, the Basement Apartment Conversion Pilot Program (BACPP) provides eligible low- and middle-income homeowners living in one- to three-family homes in East New York and Cypress Hills, Brooklyn (Community District 5) with low or no-interest, or possible forgivable, loans to convert their basement or cellar into a safe, legal, and rentable apartment, based on altered building code legislation passed in February 2019, Intro. 1004. The homeowner is also provided with technical assistance needed to close on a loan and complete the construction project.

This pilot program will help to create safe housing for tenants or occupants, while providing homeowners an opportunity to earn rental income.

For information on loan terms and the program, see the BACPP term sheet. It is also available in Spanish: Hoja de condiciones del Programa Piloto de Conversión de Sótanos en Apartamentos.

Pilot Program Eligibility

To be eligible for the program, a homeowner must:

• Own a one-, two-, or three- unit home in East New York or Cypress Hills (Brooklyn Community District 5)
• Occupy the home as their primary residence. Primary residency is defined as residing in the home 270 days a year.
• Homeowners are eligible based on their gross household income and size, outlined below. In order to determine if a homeowner might be eligible, locate the household size in Column 1 (how many people live in the home) in the chart below and review the corresponding income in Column 2. A household’s gross household income cannot be more than 165% Area Median Income (AMI) or the dollar amount shown below in Column 2:

• Comply with zoning requirements for one-, two-, or three-unit homes.
• Homes in the gray shaded area on the map may qualify for the program if all eligibility criteria are met. Homes in the blue shaded area on the map do not qualify for a basement or cellar conversion since they are in an area subject to future flood risk.
  • The program will determine if the home complies with zoning or is subject to future flood risk.

Process

Eligible homeowners are provided with financial assistance in the form of a loan to convert their basement or cellar into a safe, livable apartment by providing low - or no-interest loans, with a maximum loan amount of $120,000, and the technical assistance necessary for completing a construction project.

Cypress Hills Local Development Corporation will provide the technical assistance by managing and navigating the pre-development and construction process on behalf of the homeowner to convert the basement or cellar into an apartment and obtain a Certificate of Occupancy from the NYC Department of Buildings. Cypress Hills Local Development Corporation will also guide the homeowner through the process of applying and obtaining the loan.

The pilot program will utilize modifications to the NYC Building Code standards for a one unit home converting to a two unit home, since a basement or cellar converting into an apartment is an increase in units. The code modifications will help to make it more financially feasible to convert a basement or cellar into an apartment, while upholding the highest health and safety standards for the occupants of these apartments. 

The Multiple Dwelling Law has jurisdiction over an existing two-unit home converting to a three-unit home or an existing three-unit home converting to a four-unit home, as a result of a basement or cellar converting into an apartment. The program will also provide low or no-interest, or possibly forgivable, loans to homeowners who fall under the Multiple Dwelling Law jurisdiction.

How to Participate