Maximize your property’s value with ADU and grants by the CalHFA.
Who wouldn’t like to add more value to their property and generate passive income? In California, you have the option to do so by having Accessory Dwelling Units, or ADUs. According to our recent survey by the National Association of Realtors, building an ADU or any other building on your property can add up to 35% to your property’s value.
Another good thing about building an ADU is that the state of California is now offering a grant program to help homeowners offset their construction costs. Today, we are going to share with you what ADUs are and how to apply for California’s new grant program.
But first, let’s define what an ADU is. An ADU, also known as a granny flat or a converted garage, is a secondary dwelling unit built on the same property as a single-family home. They provide additional living space, rental income, or a solution for multi-generational households. There are different local regulations, so make sure to check your city and county’s specific requirements about square footage and other restrictions.
Now, let’s get into the more interesting part and talk about the California Housing Finance Agency’s new program that provides homeowners with up to $40,000 in grant money to help finance the construction of an ADU on their property. Because this is a grant, it doesn’t need to be repaid.
To be eligible for the grant, here are some of the criteria that you need to take note of:
- Income limitations. The maximum annual income of the borrower cannot exceed your local limits.
- Occupancy. Must be the homeowner living in the main house on the property, and investors are not eligible.
- Deed and occupancy. Your name must be on property and you must be living in the main house during ADU construction. After construction, you live in either the main house or the completed ADU.
“CALHFA’s new program provides homeowners with up to $40,000 in grant money to help finance the construction of an ADU on their property.”
If you fit the criteria, the process for applying is pretty straightforward, as follows:
- Apply for the grant by contacting an approved CalHFA lender.
- The lender approves your construction loan and pre-qualifies you for the ADU grant.
- Submit an ADU grant application with pre-development cost invoices.
- Secure a fixed-price construction contract (the lender can help with referrals).
- Grant funds are managed through escrow and released upon completion of construction phases.
If you are interested in building an ADU and potentially receiving a $40,000 grant, then contact us at (916) 919-5775. We are happy to connect you with a trusted ADU lender and builder. Don’t miss out on this opportunity to add value and earn passive income on your property.
