California Black Media

California to Roll Back Grant Program That Helps Low- and Middle-Income Residents Build ADUs

The California Housing Finance Agency’s Accessory Dwelling Unit (ADU) Grant Program may receive only $25 million in new funding instead of the $50 million investment lawmakers initially proposed after negotiations with Gov. Newsom. The state had previously allocated $100 million to increase the housing inventory and address the homelessness crisis, but these funds were depleted months ago.

Published

2 years ago

September 28, 2023

Oakland Post

Homeowners with enough space can build an Accessory Dwelling Unit (ADU) to their property, either as an add-on to an existing building or a standalone building like the one above. Photo courtesy CBM.

By Joe W. Bowers Jr. and

Edward Henderson

California Black Media

The state had previously allocated $100 million to increase the housing inventory and address the homelessness crisis, but these funds were depleted months ago.

Since its inception, the program has provided up to $40,000 toward pre-development and non-recurring closing costs associated with the construction of the ADUs, an innovative, affordable, and effective living option for low-to-middle-income residents.

The predevelopment costs the grants cover include site prep, architectural designs, permits, soil tests, impact, fees property survey and energy reports.

One of the hurdles for ADU construction has been the reluctance of California lenders and major banks to offer 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.

Funding for the program is in flux because of a disagreement between CalHFA and lawmakers over how to use it.

Lawmakers and Newsom signed a budget bill that would restore the $50 million funding in July only to see another budget bill in August take the money back. Now an amendment will put half of the money back to restart the program this month.