Revival of CalHFA’s ADU Grant Program
California state officials have relaunched an essential grant program that provides assistance to lower-income homeowners aiming to construct accessory dwelling units (ADUs). The program was previously in doubt due to funding, but California officials have pulled through and renewed it.
This program assists with some of the early financial hurdles. However, potential applicants should act swiftly as the available funds are limited, and the demand for these grants is expected to quickly exceed supply.
California’s Grant Program Just Reopened
The program just opened on Monday, December 11, 2023. Funding is limited and early applicants have better luck with obtaining funds.
Understanding CalHFA’s ADU Grant Offerings
The California Housing Finance Agency (CalHFA) is allocating up to $40,000 to eligible homeowners through the ADU Grant Program, covering pre-construction expenses such as planning and permit fees. Following an overwhelming response that depleted the initial $100 million in funding, the agency has secured an additional $25 million to continue supporting Californians in their ADU endeavors.
New Guidelines for Applicants
The grant process has specific requirements, beginning with updated income limits. Applicants must earn less than 80% of the area median income (AMI).
For instance, Los Angeles County residents must have a household income less than 80% of the area median income, equal to $84,160—a decrease from the previous requirement of 150%.
2023 Low-Income Limits by California County
Below are the 2023 low-income limits set at 80% of Area Median Income (AMI) for each county in California, as determined by the California Housing Finance Agency.
| County | Limit |
|---|---|
| Alameda | $126,560 |
| Alpine | $91,680 |
| Amador | $80,960 |
| Butte | $73,280 |
| Calaveras | $76,960 |
| Colusa | $67,040 |
| Contra Costa | $126,560 |
| Del Norte | $67,040 |
| El Dorado | $91,120 |
| Fresno | $63,520 |
| Glenn | $67,040 |
| Humboldt | $67,040 |
| Imperial | $54,320 |
| Inyo | $68,320 |
| Kern | $58,080 |
| Kings | $58,080 |
| Lake | $67,040 |
| Lassen | $67,040 |
| Los Angeles | $84,160 |
| Madera | $65,280 |
| Marin | $126,560 |
| Mariposa | $67,040 |
| Mendocino | $71,760 |
| Merced | $53,920 |
| Modoc | $67,040 |
| Mono | $76,640 |
| Monterey | $80,320 |
| Napa | $103,680 |
| Nevada | $90,000 |
| Orange | $84,160 |
| Placer | $91,120 |
| Plumas | $67,040 |
| Riverside | $75,600 |
| Sacramento | $91,120 |
| San Benito | $143,040 |
| San Bernardino | $75,600 |
| San Diego | $93,440 |
| San Francisco | $126,560 |
| San Joaquin | $80,240 |
| San Luis Obispo | $90,480 |
| San Mateo | $126,560 |
| Santa Barbara | $85,840 |
| Santa Clara | $143,040 |
| Santa Cruz | $106,240 |
| Shasta | $69,600 |
| Sierra | $67,040 |
| Siskiyou | $67,040 |
| Solano | $90,080 |
| Sonoma | $102,480 |
| Stanislaus | $74,080 |
| Sutter | $60,880 |
| Tehama | $67,040 |
| Trinity | $67,040 |
| Tulare | $54,160 |
| Tuolumne | $78,160 |
| Ventura | $98,800 |
| Yolo | $91,120 |
| Yuba | $60,880 |
These limits are used to determine eligibility for affordable housing programs such as CalHFA’s ADU Grant Program.
Navigating the Application with an Approved Lender
Prospective applicants must collaborate with state-approved lenders or special financing participants, as the grants are disbursed to lenders, not directly to homeowners. The CalHFA website lists eligible lenders along with governmental and nonprofit organizations that can facilitate the grant process, such as Neighborhood Housing Services of Los Angeles County with its focus on affordable housing solutions.
Pre-Grant Loan and Eligible Reimbursable Costs
Typically, a construction loan obtained from a participating lender for the ADU’s total costs must precede a grant application. This step ensures that the expenses covered by the grant—such as architectural designs, permits, and utility hookups—are in place. These reimbursable costs are a significant component of new ADU construction, particularly when converting existing structures.
Even Without a Loan, You Can Apply
If the ADU project is still in the planning phase without a secured loan, hopeful grant recipients can still queue for a grant. Required details include a mortgage statement, income proof, and personal identification, which can be submitted via email to Neighborhood Housing Services to potentially reserve a grant spot.
Direct ADU Build Without a Loan
For homeowners who surpass the income thresholds but can independently fund their ADU construction, the option to apply through an agency like NHSLA remains. This route would require the construction team of the agency to oversee both the project and the grant management, as described by Iris Cruz from Neighborhood Housing Services.
Mandatory Legal Attestations
Grant applicants are required to sign an affidavit confirming various aspects of their project, such as U.S. residency, property ownership, and the intended use of the ADU in alignment with housing and rental needs, not to mention adherence to local building regulations. It is crucial to provide truthful information, as false declarations can result in severe legal consequences, including fines and imprisonment.
Income Verification by Lender
Finally, the lender must confirm that the applicant fulfills the program’s income criteria, adding another layer of verification to the application process.
Don’t Miss Out on the ADU Grant Program
This revived grant opportunity opens doors for homeowners to create additional living spaces while addressing California’s housing shortage. By providing critical financial assistance and engaging with specialized lenders and nonprofit organizations, the CalHFA makes ADU construction an achievable goal for qualifying residents.
Ready to Start Your ADU Project? Apply Now
Gain more insight and begin the application process for the CalHFA ADU Grant Program through their website. Take the first step to join the movement of Californians making headway in affordable housing and maximizing their property’s potential.