California takes back $50 million for ADU program – transfers $20 million to down payment program

Published on

Photo credit: CalHFA

CALIFORNIA – CA lawmakers reverted $50 million, August 30, from the California Housing Finance Agency’s (CALHFA) ADU Grant Program that provides $40,000 to homeowners to cover pre-construction costs of an accessory dwelling unit (ADU).

Lawmakers now say $25 million may be put back into the program as well as $20 million transferred into the California Dream for All down payment program.

Hurdles for ADU construction

According to the LA Times, Assembly Budget Chair Phil Ting said one of the hurdles for ADU construction has been the reluctance of California lenders and major banks to develop ADU loans. Although CALHFA provides a $40,000 grant to qualified homeowners, the overall cost of an ADU can range from $300,000 to more than $400,000.

Two years ago, lawmakers provided $50 million to CalHFA to create a loan loss reserve fund that would backstop ADU loans from private lenders.

A loan loss reserve fund is money set aside to cover potential losses — loans don’t get repaid.

After CalHFA studied the issue, Ting said there was still a significant amount of hesitancy at the agency to start a loan loss reserve program.

Ting said as homeowners built more ADUs, more lenders took an interest in the field. After initially agreeing to redirect all $50 million to other programs, Ting is proposing to put $25 million into the existing ADU grant program and redirect the remainder.

RELATED: Accessory Dwelling Unit grant for $40,000 gets $50 million in funding

California Dream For All down payment assistance

The Assembly Budget Committee also transferred $20 million to the California Dream For All (DFA) program, in addition to the $200 million that was restored to the program in July.

The first-time homebuyer program provides up to 20% down payment assistance in return for a share of the appreciation in the home’s value.

RELATED: CA Dream for All 20% down payment program gets additional $200 Million in funding

Earlier this year, CalHFA paused DFA applications in less than two weeks after they allocated the initial $300 million in funding to 2,300 applicants.

According to the website, CalHFA will provide an update Fall 2023 that will include a timeline for applications. They will send out all updates through their eNews to ensure all stakeholders remain informed.

To stay up to date on the latest CalHFA news visit https://public.govdelivery.com/accounts/CAHFA/signup/35119

spot_img

Latest articles

VVUHSD secures part of $500 Million grant for electric school buses

VICTORVILLE – The California Air Resources Board (CARB) announced April 23, that the state...

Major SoCal fast food chain closing up to 200 locations nationwide

CALIFORNIA – Jack in the Box announced April 23, that it will close 150...

California officially becomes 4th largest economy overtaking Japan

CALIFORNIA – Governor Gavin Newsom announced April 23, that California has officially overtaken Japan...

California kids get a $120 grocery boost with SUN Bucks

CALIFORNIA – Governor Gavin Newsom announced April 23, that California will soon be releasing...

More like this

California kids get a $120 grocery boost with SUN Bucks

CALIFORNIA – Governor Gavin Newsom announced April 23, that California will soon be releasing...

Victorville offers $100 gift cards for curbside recycling contest

VICTORVILLE – The City of Victorville invites residents to participate in the “The Right...

Major crypto exchange launching in U.S. with headquarters in California 

CALIFORNIA – Cryptocurrency exchange OKX, announced April 15, that it was launching a U.S....