Thinking about adding an Accessory Dwelling Unit (ADU) to your property? Whether you’re dreaming of a backyard studio for family, a rental unit to generate extra income, or simply more space, the California Housing Finance Agency (CalHFA) is here to help with their ADU Grant Program. It’s designed to provide financial assistance to homeowners for building or planning an ADU.

What Is the Program?

The CalHFA ADU Grant Program provides grants (not loans) for qualifying homeowners to build Accessory Dwelling Units. The funds are specifically for pre-development expenses like permits, architectural designs, and utility hookups—expenses that can pile up before construction even begins.

Key Details of the Program

Funding Source

This program is funded and administered by the California Housing Finance Agency (CalHFA) with the goal of expanding affordable housing options in the state.

Eligibility Criteria

• Property Ownership: The applicant must be a homeowner in California and the ADU must be constructed on their property.
• Income Requirements: Household income must not exceed CalHFA’s moderate-income limits for the county.
• First-Time Use: The grant cannot be used for ADUs that are already under construction or completed.
• Pre-Approval for a Loan: Applicants must obtain pre-approval for construction financing through a participating lender.
• Primary Residence: The homeowner must live on the property as their primary residence.
• Grant Usage: Funds must be used for eligible pre-development expenses like permits, architectural plans, and utility hookups.

Benefits of the Program

• Provides up to $40,000 in grant funds.
• Funds are non-repayable.
• Reduces upfront financial barriers for ADU construction.

Potential Drawbacks

• Funding is limited and distributed on a first-come, first-served basis.
• Does not cover actual construction costs.
• Requires working with a CalHFA-approved lender.

Application Process

1. Contact a CalHFA-approved lender.
2. Get pre-approved for construction financing.
3. Submit the grant application with the help of your lender.
4. Receive grant funds for pre-development expenses.
5. Begin building your ADU!

Where Is This Program Available?

Location: Statewide, California.

How to Learn More

For additional details or to begin the application process, contact CalHFA or a participating lender:

• • CalHFA Website: CalHFA ADU Grant Program
  • CalHFA Customer Service: 877-922-5432

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