Diagram showcasing diverse types of Accessory Dwelling Units (ADUs), including Granny Flats and innovative housing solutions for sustainable and affordable living.
Exploring the World of ADUs: A visual guide to various types of Accessory Dwelling Units, offering versatile housing options for sustainable and affordable living.

CalHFA allocated additional funding for the CalHFA ADU Grant Program
CalHFA has secured additional funding for the CalHFA ADU Grant Program through the 2023-24 State Budget amendment via Senate Bill 104. This legislative update grants CalHFA a one-time appropriation of $25 million specifically earmarked for the CalHFA ADU Grant Program. The program itself offers valuable assistance, providing up to $40,000 for pre-development costs and non-recurring closing costs. Starting December 11, 2023, approved ADU Participants, which include lenders, non-profits, and local government agencies, will gain access to reserve funds for the program.

To manage the anticipated high demand, CalHFA will implement a maximum limit of 275 ADU Grant reservations per approved participant. Any duplicate reservations will be promptly canceled to ensure fair and efficient allocation of resources. For comprehensive details, please refer to Program Bulletin #2023-12 – CalHFA Allocated Additional Funding for the CalHFA ADU Grant Program.

CalHFA has recently received additional funding for the CalHFA ADU Grant Program through the 2023-24 State Budget as amended by Senate Bill 104. This one-time appropriation of $25 million is designated for the CalHFA ADU Grant Program, offering up to $40,000 in assistance for pre-development costs and nonrecurring closing costs. Starting December 11, 2023, CalHFA-approved ADU Participants, including lenders, non-profits, and local government agencies, will have access to reserve funds for the program. Given the anticipated high demand, CalHFA will limit each approved participant to a maximum of 275 ADU Grant reservations, with any duplicate reservations being canceled.

To qualify, the program is available exclusively to low-income homeowners (earning <80% AMI) who own and occupy the property as their primary residence. The ADU must adhere to Fannie Mae/FHA ADU feature requirements and comply with all local zoning ordinances for property use. ADU Participants are required to complete and sign the CalHFA Participant Affidavit (Rev 11/27/23), and applicants must complete and sign the CalHFA Applicant Affidavit (Rev 11/27/23). A Certificate of Occupancy must be provided upon ADU completion. For detailed program guidelines, please refer to CalHFA’s ADU Grant Termsheet. For inquiries, contact CalHFA’s Single Family Lending Division at 916.326.8033 or via email at SFLending@calhfa.ca.gov. Visit CalHFA’s website at www.calhfa.ca.gov or Single Family Lending directly at www.calhfa.ca.gov/homeownership for more information. CalHFA appreciates your business and looks forward to supporting your affordable housing loan needs.

Explore Program Bulletin #2023-12 for Details on CalHFA’s Latest Funding Boost

Accessory Dwelling Unit (ADU) Grant Program

The objective of the Accessory Dwelling Unit (ADU) Grant Program is to create more housing units in California by providing a grant for pre-development costs and non-reoccurring closing costs associated with the construction of the ADU.

Eligible Participant / Loan Origination / Servicing

  • CalHFA approved participants who have executed the ADU Lender Participation Agreement
  • Participant can use their own various delivery options to price and deliver their construction loans
  • CalHFA will not purchase construction loans, reimburse Participant for construction loans, or provide any sort of guarantee for Participant having made construction loans to eligible borrowers
  • Participant can retain servicing or release servicing to a 3rd party of their choice Qualifications
  • Low income limits — CalHFA ADU Grant income limit

    Program Description
    Participant will secure financing to construct the ADU. CalHFA provides up to $40,000 for pre-development costs and non-reoccurring closing costs to build the ADU.

    Applicant and Participant Process
    Submission package to include:

  1. Copy of current construction loan deed of trust for financing or current deed on file if no financing is used
  2. Construction loan approval documents to include income used for qualifying Escrow instructions to wire funds
  3. Loan Estimate or Closing Disclosure
  4. Itemization list for pre-development costs including Contractor’s Bid, Scope of Work, or Budget
  • Pre-development costs include but are not limited to architectural designs, permits, soil tests, impact fees, property surveys, energy reports and utility hookups
  1. CalHFA Participant Affidavit
  • Certify the construction of the ADU will follow Fannie Mae/FHA ADU feature requirements
  • Certify all locality permit and/or impact fees have been paid
  • Certify all eligible income is included in the income calculation.

    Participants shall not exclude or reduce applicant income or remove
    applicants to meet our income limit requirements.
    California Housing Finance Agency
    500 Capitol Mall Suite 1400, MS-990
    Sacramento, CA 95814
    916.326.8800
    www.calhfa.ca.gov

    Accessory Dwelling Unit Grant Program
    Last revised: 11/27/2023

  • Certify they will provide a certificate of occupancy upon completion of the ADU
  1. CalHFA Applicant Affidavit
  • Certify of Owner Occupancy and Rental or Intergenerational Housing Purpose
  • Certify ADU meets all local zoning ordinances for use of property and building codes
  • Applicant to acknowledge they will receive a Form 1099-G alerting them of potential income tax consequences

    CalHFA’s Process
    CalHFA will review the submission package and contribute up to $40,000 directly to construction escrow. These funds can be used to for eligible pre-development costs and non-reoccurring closing costs to build the ADU.
    Any pre-development or closing costs paid up front by the applicant cannot be reimbursed as cash back but can be reimbursed as a principal reduction to the
    construction loan for the ADU.rCalHFA will issue a Form 1099-G to the borrower for the calendar year in which CalHFA contributed funds to escrow.

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