Many states, including California, have begun encouraging the development of ADUs to combat the growing housing crisis. As a result of this, the California ADU grant program has emerged. Here is what you need to know about it.
You Get $40k For Your ADU
The ADU grant program from CalHFA has created a way for low-to-moderate income homeowners to receive $40k towards pre-construction expenses. Pre-construction costs include things like: Soil tests Site prep Property survey Permits Impact fees Engineering plans and calculations Energy reports Architectural designs Pre-construction costs can cost anywhere from $9,000 and $25,000. Having access to up to $40,000 means that you could cover all of your pre-construction costs with this grant.
You will still need to find another way to finance the rest of your ADU construction though. A simple 2-car garage conversion costs at least $90,000, meaning you still have a good chunk of change to come up with especially if you are building a new construction detached ADU. However, having an extra $40,000 can mean less you have to take out in loan form and pay interest on.
You Need A Loan Too
The biggest stipulation to the grant program is that you need a loan from a pre-approved lender to qualify for the grant. This can severely limit your loan options since it needs to come from a group of specific lenders who may not offer the type of loan you had in mind for your ADU development.
There Are Qualifications To Meet
Before you start looking at pre-approved loan lenders to get the grant, you might want to make sure you qualify for it. The only real qualification for the grant is that the borrower (not the whole household) must be below the income requirement in the county they live in. For some parts of California, this is up to $200k, for others, it is as low as $159,000. You will need to look up your county’s eligibility limits to determine if you meet them. If you make more than your county allows, this grant won’t be an option for you.
For more valuable information visit this website