Are you considering building an Accessory Dwelling Unit (ADU) or Junior Accessory Dwelling Unit (JADU) in California? If so, you should apply for state and local incentives available to help with your new construction.
ADU FUNDING FOR HOMEOWNERS
- CalHFA’s ADU Grant Program – Effective on or after September 20, 2021, the CalHFA ADU Grant Program will provide up to $25,000 to reimburse homeowners for predevelopment costs necessary to build and occupy an ADU.
NEW ADU FUNDING LAWS EFFECTIVE JANUARY 1, 2021
- The California Health and Safety Code (HSC), Section 65583(c)(7), requires that cities and counties develop a plan that incentivizes and promotes the creation of ADUs that can be offered at affordable rent for very-low to moderate-income households.
- As recapped below, HCD has developed a list of existing state grants and financial incentives in connection with the expenses for the planning, construction, and operation of an ADU with affordable rent for very low to moderate-income households.
POTENTIAL STATE GRANTS AND FINANCIAL INCENTIVES FOR ADUs
- CalHome Program — The CalHome Program Provides grants to local public agencies and nonprofit corporations for first-time homebuyer and housing rehabilitation assistance, homebuyer counseling and technical assistance activities to enable low- and very low-income households to become or remain homeowners.
- Local Early Action Planning (LEAP) Grants — State grants to local jurisdictions including eligible partnerships for housing planning, and developing or improving an ADU ordinance in compliance with Section 65852.2 of the Government Code (HCD LEAP program)
- Local Housing Trust Fund (LHTF) Program — Matching funds to local and regional housing trust funds. Funds may also be used for the construction, conversion, repair, reconstruction, or rehabilitation of ADUs or JADUs (HCD LHTF program)
- Regional Early Action Planning (REAP) Grants — Grants to the council of governments (COGs) and other regional entities for activities relating to housing planning and activities including establishing Prohousing Policies such as adopting ADU ordinances or other mechanisms that reduce barriers for property owners to create ADUs (HCD REAP program)
- SB 2 Planning Grants — Grants to local governments including eligible partnerships for housing planning and to encourage ADUs and other innovative building types through ordinances, outreach, fee waivers, pre-approved plans, website zoning clearance assistance, and other homeowner tools or finance tools (HCD SB2 program)
- Community Development Block Grant Program (CDBG) — The CDBG program improves the economic, social and physical environment of eligible, rural cities and counties to enhance the quality of life for low- and moderate-income residents, thereby strengthening the entire community. The CDBG Program offers General Purpose and Specialty grants. Applicants must be income qualified in low- to moderate-income households for rehabilitation and areas for planning. Contact your local jurisdictions for more information.
OTHER POTENTIAL GRANTS AND FINANCIAL INCENTIVES FOR ADUS
California Department of Housing & Community Development – https://www.hcd.ca.gov/policy-research/accessorydwellingunits.shtml