Who Qualifies for an ADU Grant in California
California's ADU Grant Program offers substantial financial assistance to promote the construction of accessory dwelling units (ADUs) and address the housing shortage. Here’s an in-depth look into the types of grants available and the qualifications needed to obtain them.
Types of Grants and Eligibility:
CalHFA ADU Grant Program: Offers up to $40,000 in assistance to cover predevelopment costs necessary to build and occupy an ADU. This program targets the planning, construction, and operation of ADUs to provide affordable rent for very-low to moderate-income households. To qualify, homeowners must meet specific income thresholds which vary based on location and household size
Other State Grants and Financial Incentives: These include the CalHome Program, Local Early Action Planning (LEAP) Grants, Local Housing Trust Fund (LHTF) Program, Regional Early Action Planning (REAP) Grants, and SB 2 Planning Grants. These grants are generally aimed at local public agencies, non-profit corporations, and homeowners to encourage ADU construction and improve local housing supply .
Application Requirements:
These are some general application requirements you can expect when applying for these types of grants.
Be the property owner and occupant where the ADU will be built.
Ensure household income does not exceed 80% of the area median income.
Have property zoned for ADUs, typically single-family homes.
Clear any outstanding liens or judgments against the property
For a full list of all application requirements refer to each loan program’s qualifications.
You might be wondering, why are there so many ADU financial incentives? Cärrin Johnson from Life House SD states: “Typically, these programs target homeowners looking to build ADUs to increase housing supply.”
Creative Financing Options for ADU:
Beyond grants, there are several ways to finance your ADU project:
Home Equity Line of Credit (HELOC): Leverage the equity in your home to finance ADU construction with flexibility in funds usage and repayment.
Mortgage Refinancing: Refinance your existing mortgage into a new one with a higher amount than what you currently owe, then use the extra funds for your ADU.
ADU-Specific Loan Programs: Some lenders offer loan products specifically designed for ADU construction.
Other Government Loans and Programs: Look into government-backed loans or local housing programs offering low-interest rates or down payment assistance.
Understanding the requirements and exploring multiple financing options can significantly ease the financial burden of adding an ADU to your property. Always consult with financial advisors or loan specialists to find the best solution tailored to your needs and circumstances
Ready to Build Your ADU in San Diego, Los Angeles or Orange County?
Lifehouse SD is here to turn your vision into reality, covering everything from design and permitting to construction with your ADU project. Click here to schedule your free 15-minute consultation with our CEO, Cärrin Johnson, today.
