In an effort to create more affordable housing, California re-opened a program Dec. 11 that provides up to $40,000 for homeowners to build an accessory dwelling unit (ADU), sometimes called backyard cottages or granny flats, in their backyard.
Qualifying applicants can use the grant to reimburse some “pre-development” costs such as site prep and architectural designs, according to state officials, in addition to non-recurring closing costs, such as a home protection plan, attorney fees, and a home inspection, to name a few.
To qualify one must be considered low-income, which is for households earning below 80 percent of the county’s median income, which translates to $84,160 in Los Angeles and $126,560 in San Francisco, for example.
A list of approved lenders for a loan, including governmental or nonprofit agencies, can be found on the state’s Housing Finance Authority website—which is in charge of managing the program—with 30 options of which to select. .
Earlier this year, the program exhausted $100 million in funding and is now offering an additional $25 million.
Currently, one of the approved lenders, the California Community Economic Development Association—a community-based nonprofit—is advising applicants that the funding it was allocated was already depleted as of Monday Dec. 18.
Funding is still available for some lenders “but due to limited overall funds in this round,” the program is soon reaching its capacity, according to a spokesperson for the finance authority.
Other pre-construction costs include impact fees, soil tests, property surveys, utility hookups and energy reports, according to state officials.
Approved applicants must sign an affidavit with the housing authority stating that they are a U.S. citizen or legal resident; they are the primary homeowner and occupant of the main residence on site of where the ADU will be built; and they will use the funding only for ADUs that are permanent housing or long-term rentals or face a fine of up to $10,000 or a prison term, according to officials. The ADU must also conform to local building and zoning codes.
