What is a California ADU Grant?

A California Accessory Dwelling Unit (ADU) Grant is a financial assistance program designed to help low-income homeowners (with income less than 80% of the Area Median Income) create more housing units in the state. Eligible homeowners can receive up to $40,000 towards predevelopment and non-recurring closing costs associated with ADU construction. These costs include site preparation, architectural designs, permits, soil tests, impact fees, property surveys, and energy reports. As of the latest update, the funds for the most recent round have been fully allocated, but future opportunities may arise.

How do you qualify for the ADU grant in California?

Qualifying for an ADU grant in California requires homeowners to meet certain criteria set by various grant and loan programs, with the CalHFA ADU Grant Program being a primary source of assistance.

How do I apply for the ADU Grant?

To apply for the California ADU Grant, visit the official CalHFA website, gather the necessary documents, and plan for a potentially lengthy application timeline. It is essential to adhere to the requirements for the grant program and engage with experienced ADU contractors to ensure your project meets the necessary standards.

What are the predevelopment costs for the ADU Grant?

The California ADU Grant Program offers significant financial support to homeowners for constructing Accessory Dwelling Units (ADUs), focusing particularly on the crucial predevelopment phase. These costs represent the initial expenses incurred before actual construction begins and are vital for ensuring a successful and compliant ADU project.

Do I have to pay back the ADU grant program?

The California ADU Grant Program plays a pivotal role in assisting homeowners to build Accessory Dwelling Units (ADUs) on their properties. A key feature of this program is the nature of the funding: it provides grants, not loans, which significantly eases the financial burden on recipients as these funds do not require repayment.

If I already have funds, can I still receive a grant for the ADU program without refinancing/applying for a construction loan?

Yes, homeowners who already have funds for their ADU project can still receive a grant without refinancing or applying for a construction loan. The California Housing Finance Agency (CalHFA) offers a $40,000 grant to help low-income homeowners cover pre-construction costs associated with building an Accessory Dwelling Unit (ADU).

Is the ADU grant program still available in California?

No, as of the latest information available, all funds for the Accessory Dwelling Unit (ADU) Grant program in California were fully reserved as of December 28, 2023.

Besides the ADU grant program, how can I get funds to build an ADU in California?

California’s commitment to expanding affordable housing options extends beyond the ADU Grant Program. Homeowners looking to build Accessory Dwelling Units (ADUs) have access to a variety of financing sources, accommodating different financial circumstances and project needs.

What loan programs does CalHFA offer?

One popular loan program offered by CalHFA is the CalPLUS Conventional Loan Program. This program offers an affordable, fixed-rate mortgage combined with a CalHFA Zero Interest Program (ZIP) for down payment assistance. The ZIP loan is a deferred payment loan with a 0% interest rate, making it an attractive option for first-time homebuyers. CalHFA also provides the First-time Homebuyer Assistance Programs, which include the MyHome Assistance Program and the School Teacher and Employee Assistance Program (School Program).

What is the difference between CalHFA and FHA?

FHA, or the Federal Housing Administration, is a federal agency that provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. This insurance protects the lenders from financial loss in case a borrower defaults on the loan. FHA loan programs are designed to help first-time homebuyers and low to moderate-income borrowers obtain affordable mortgage financing.

What are the income limits for the California ADU Loan Program?

The income limits for the California ADU Loan Program vary depending on the location and size of the homeowner’s household. These limits are set to ensure that the program caters to low-to-moderate-income individuals and families. It is essential to review your specific county’s income limits to determine whether you qualify for the program.

What credit score is necessary to qualify for a CalHFA loan?

The minimum credit score required for CalHFA loans depends on the specific loan program being applied for. For all government loan programs offered by CalHFA, the minimum credit score is 640. This includes CalHFA FHA and CalPLUS FHA loans. However, there are certain scenarios where these loan programs require a higher credit score of 660, such as manually underwritten loans and manufactured housing.

How much can I get with CalHFA?

The California Housing Finance Agency (CalHFA) offers the Accessory Dwelling Unit (ADU) Grant Program to help homeowners cover the predevelopment and non-recurring closing costs associated with the construction of an ADU. Homeowners can receive up to $40,000 in assistance through this program.

What are the interest rates for the CalHFA loan program?

Interest rates for CalHFA loan programs can vary depending on the specific program and market conditions. For example, the CalPLUS Conventional program comes with a 3% Zero Interest Program for eligible homebuyers. This program aims to help borrowers by offering a deferred payment loan with a 0% interest rate for a portion of their down payment or closing costs.

Can a buyer combine a CalHFA loan with a 203k program?

Yes, a buyer can combine a CalHFA loan with a 203k program. CalHFA recently added the option to use a limited 203k as part of their offerings, allowing buyers to roll the costs of minor remodeling and non-structural repairs into their mortgage payment. This option is ideal for those looking to make improvements to their new home, with up to $35,000 available for eligible repairs.

Can I still qualify (meeting all other requirements) if I use a “co-borrower” or “co-signer” for CalHFA FHA Loans?

According to the CalHFA guidelines, neither non-occupant co-borrowers nor co-signers are allowed on any of their loan programs, including FHA Loans. CalHFA’s goal is to assist low- to moderate-income borrowers, and they have certain requirements that need to be met to ensure the integrity of their programs.

Is it possible to refinance a CalHFA loan?

Yes, it is possible to refinance an existing CalHFA loan. The California Housing Finance Agency (CalHFA) offers refinancing options for homeowners who currently have a CalHFA loan. These refinancing options aim to provide financial flexibility and potentially lower interest rates for homeowners.

What is the ADU bonus program in San Diego?

The ADU bonus program in San Diego is an initiative that aims to increase the supply of affordable housing in the city by incentivizing homeowners to build accessory dwelling units (ADUs) on their property. Under this program, homeowners can receive additional benefits if they deed restrict their ADUs as affordable for very low-, low-, or moderate-income households for a period of 15 years.

How can I stay current on CalHFA’s programs, news, and updates?

Staying informed about the California Housing Finance Agency’s (CalHFA) programs, news, and updates is essential for those interested in the ADU Grant and Loan Programs. One effective way to stay current on CalHFA’s information is by signing up for their eNews Announcements page, which offers email notifications of recent announcements and important updates.

Does ADU increase property tax in California?

Yes, constructing an Accessory Dwelling Unit (ADU) on your property may lead to an increase in property taxes. This is because the construction of an ADU often results in an increase in the property’s value, and property taxes are typically based on the assessed value of the property. For a precise assessment, consider consulting your local assessor’s office or a property tax advisor.

How much does an ADU increase property taxes in California?

The exact amount by which an ADU may increase property taxes depends on the value added by the ADU and the local property tax rate. Each jurisdiction in California has its own tax rate, so the increase may vary based on your location. The increase in property taxes can be calculated by multiplying the increased assessed value by the local property tax rate. For a more accurate estimate tailored to your property, you might want to contact a local tax assessor or a real estate professional.

What is the maximum amount of money available for the ADU Grant in California?

The California ADU Grant Program can provide up to $40,000 in assistance for predevelopment and non-reoccurring closing costs associated with the construction of an ADU. These costs may include items such as site preparation, architectural designs, permits, soil tests, impact fees, property surveys, and energy reports.

Where can I find the application forms for the CalHFA ADU Grant?

Information on the CalHFA ADU Grant application process and forms can be found on the CalHFA website. Homeowners interested in the program should visit the website for complete details and instructions on how to apply.

Are there any lenders participating in the CalHFA ADU Grant program?

Yes, there are lenders that participate in the CalHFA ADU Grant program. To find a participating lender, you can refer to the list of approved lenders provided on the CalHFA website.

Is the California ADU amnesty program still available?

As of the time of writing, it is unclear if the California ADU amnesty program is still available. The program aimed to help homeowners legalize unpermitted ADUs by providing assistance with the permitting process. It is recommended to check with your local jurisdiction or a housing expert for the most current information on this program.

Who is considered a first-time homebuyer?

A first-time homebuyer is generally defined as someone who has not owned a home in the previous three years. However, specific definitions and eligibility requirements may vary depending on the program or financial assistance. It is best to consult with the specific program or lender for their eligibility criteria.