ADU Phase II – $25 Million grant fund for accessory dwelling unit taking applications December 2023

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CALIFORNIA – The California Housing Finance Agency (CalHFA) announced Thursday that the Accessory Dwelling Unit (ADU) Grant Program Phase II will be accepting applications in December 2023. 

CalFHA estimates that the $25 million fund will provide 600 grants to ensure underrepresented low-income homeowners have opportunities to build wealth through homeownership.

New eligibility requirement

According to CalHFA ADU Grant Program Manager Cheryl Silva during Phase I of the program, 35% of the grant was distributed to low-income households. 

CalHFA wants to increase grant awards to this demographic.

“They would like to see us reduce the income limits from moderate income at 150% AMI to low-income at 80% AMI,” said Silva.  “In phase one we saw 35% or $35 million go to low-income homeowners so we do not have any concerns with distributing the full $25 million to low-income households.”

Phase I results

Silva said CalHFA distributed grant awards to 44 of the 58 counties in California.  

“Forty-two percent of the grants went specifically to LA County which we struggle sometimes to serve LA County with some of our other programs,” said Silva. 

Silva also said the grant performed well in LA county because the county has a high permit rate and an ADU-friendly permitting process.

In addition, Silva said CalHFA was very pleased to see that in the Black Community where homeownership rates are 5%, they awarded 9% of the ADU grants.

ADU Grant

The ADU Grant Phase I provided a $40,000 grant to low to moderate-income homeowners to construct an ADU –  a secondary housing unit on a single-family residential lot typically between 600 and 1,200 square feet.

Grant funds could be used for pre-development costs and closing costs including interest rate buydowns. 

For more information about the ADU program visit https://www.calhfa.ca.gov/adu/

RELATED: FHA changes policy to allow projected income from ADU to qualify for a mortgage

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