If you live in Fort Collins and have been thinking about building an ADU, also called a backyard cottage, carriage house, mother-in-law suite, or granny flat, you might want to pause before jumping in.
Not forever. But maybe for a little bit.
At the April 21, 2026 Fort Collins City Council meeting, Council supported a grant application that could make building an ADU easier and potentially cheaper for some homeowners. This is not a full program yet. It is not something you can use tomorrow. But it could be a big deal if you are not in a rush.
The city is applying for money from the Colorado Department of Local Affairs, also known as DOLA, through the Accessory Dwelling Unit Grant Program. Fort Collins became an “ADU Supportive Jurisdiction” in February 2026, which made the city eligible for this type of grant funding. The goal is to help cities make ADUs easier to build.
So the big question is simple:
Should you build your ADU now, or should you wait?
For many homeowners, the answer may be: wait a little while and see what happens.
What Is Fort Collins Trying to Do?
The city is asking DOLA for $157,000 in grant support.
That money would be used for two main things:
First, $97,000 would go toward creating two pre-approved ADU designs. These would be plans that are already reviewed and accepted by the city in advance.
Second, $60,000 would go toward fee waiver support. That means the city could help cover or reduce some of the fees homeowners normally pay when building an ADU.
This matters because building an ADU in Fort Collins can be expensive, confusing, and slow.
You are not just building a shed in the backyard. You are building a real home. That means design work, permits, city review, utilities, building code, energy code, and construction costs.
A pre-approved design could take some of that pain away.
Why Waiting Could Save You Thousands
There are two big ways waiting could save money.
You May Save on Design Costs
Right now, if you want to build an ADU, you may need to hire an architect, designer, engineer, or builder to create a custom plan. That can cost thousands of dollars before you even break ground.
A pre-approved ADU plan does not mean your project is free. You may still need a site plan. You may still need to deal with utilities, grading, drainage, setbacks, and your specific lot.
But it can give you a much better starting point.
Instead of asking, “Where do I even begin?” you may be able to start with a city-backed plan that has already been reviewed.
That could save time. It could reduce design risk. It could help builders give you better pricing. And it could help you avoid spending thousands of dollars on a plan that later runs into city review problems.
You May Save on City Fees
This is the more obvious one.
The city’s grant request includes $60,000 to help backfill waived capital expansion and review fees tied to the pre-approved ADU designs.
That does not mean every homeowner will get a giant check. It also does not mean every ADU will qualify.
But it does mean Fort Collins is trying to lower the cost barrier.
Depending on the size of the ADU and what fees are included, this could potentially save early homeowners thousands of dollars. In some cases, when you combine lower design costs, fewer review delays, and fee waivers, the savings could reach into the tens of thousands.
That is why this is worth watching.
How Long Would You Need to Wait?
This is the tricky part.
The city expects DOLA to announce grant awards in Q2 of 2026. If Fort Collins gets the grant, Council would still need to approve the money through a future appropriation.
So this is not an overnight thing.
A realistic timeline may look something like this:
- Spring/Summer 2026: DOLA announces grant awards
- After that: Fort Collins brings the money back to Council for approval
- Late 2026 or 2027: The city works on the pre-approved designs and fee waiver process
- After that: Homeowners may be able to use the program
That timeline is not guaranteed.
But if you are casually thinking about an ADU and do not need it built right away, waiting 6 to 12 months may be smart.
If you need housing for a parent, child, renter, or caregiver immediately, you may not have the luxury of waiting. But if your timeline is flexible, this could be one of those moments where patience pays.
What Else Could Help Lower the Burden?
There is another important piece.
The city’s match for the grant would come from the Build to 2030 program, funded by the Climate Tax. That program is expected to create three pre-approved building designs that meet the proposed 2030 Energy Code. One of those designs is expected to be an ADU.
That means Fort Collins may not just be making ADUs easier. It may be trying to make them more energy-efficient from the beginning.
That could help homeowners in a few ways:
- Better energy performance
- Lower utility bills
- More predictable design standards
- Easier path through city review
- Better long-term value
This also fits into the bigger picture of where Fort Collins is going. The city is trying to add more housing without changing every neighborhood overnight. ADUs are one way to do that. They use land that already exists. They can add housing in a quieter, smaller way.
One public commenter said it well during the meeting: ADUs will not solve the housing crisis alone, but they are a “solid first step” and a way to use lots and infrastructure we already have.
Who Should Wait?
You should strongly consider waiting if:
- You are early in the planning process
- You do not already have plans drawn
- You are cost-sensitive
- You want a simple, proven design
- You are building for rental income but do not need income right away
- You are building for a future parent, child, or caregiver
- You want to avoid wasting money on plans that may need major revisions
For these homeowners, waiting could be the right move.
Who Should Build Now?
Building now may still make sense if:
- You already have plans
- You already have permits in process
- You need the unit built quickly
- You have a builder ready to go
- Your lot has unique needs that would not fit a standard design
- You are not worried about the extra costs
In that case, waiting may cost you more in lost rent, delayed family plans, or rising construction costs.
My Take: Build Now or Wait?
If I were a Fort Collins homeowner thinking about building an ADU, I would probably wait unless I had a strong reason to move now.
This program is not guaranteed. And even if Fort Collins gets the money, it may take months before homeowners can use it.
But the upside is real.
Pre-approved plans could save time. Fee waivers could save money. Energy-ready designs could make the finished product better long-term.
The biggest risk of waiting is that construction costs could keep rising. But the biggest risk of building now is spending thousands of dollars on custom plans and fees right before the city rolls out a cheaper, easier path.
So for most homeowners, the smart play is this:
Start planning now. But don’t rush into spending major money yet.
Talk to the city. Talk to a builder. Look at your lot. Understand your utility situation. Get clear on your goal.
But before you write a big check for custom design work, keep an eye on this ADU grant.
Because in Fort Collins, the path to building a backyard cottage may soon get easier — and possibly a lot cheaper.