As a nonprofit corporation, CCEDA is proud to be one of CalHFA’s preferred partners offering the $40,000 ADU grant to cover pre-development costs. Currently we are the only partner who has an open application for acquiring the grant without a loan.
Through CCEDA you can apply for the $40,000 CalHFA ADU grant, whether you have all the cash needed for your ADU project or if you require a loan to help bridge the gap.
If you have the cash and / or existing loan proceeds in hand to pay for your entire ADU budget, you can now utilize those funds to pay for your ADU and utilize the CalHFA ADU grant to cover your eligible predevelopment costs. We will place your funds into a managed escrow account along with the grant proceeds for safe dispersement to approved 3rd party vendors throughout your ADU project.
If you require financing to help bridge the gap between your current cash resources, the CalHFA grant, and your final project budget, we offer second mortgages through pre-approved lenders. A benefit of acquiring financing through a CCEDA pre-approved lender is you can utilize the grant funds to pay non-recurring closing costs such as lender origination fees, escrow and title fees, or even buy down the interest rate of your loan. CCEDA will oversee payments to vendors during the entirety of your ADU project.
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Accessory Dwelling Units (ADUs) have been known by many names: granny flats, in-law units, backyard cottages, secondary units and more. No matter what you call them, ADUs are an innovative, affordable, and effective option for adding much-needed housing in California.
A managed escrow account ensures accountability in the disbursement of state grant funds, protect lender funds, and ensure your cash remains available for the duration of your ADU project. CCEDA’s team oversees the 3rd party escrow account, approves your construction budget and reviews each milestone of your ADU project. You and your funds are protected with disbursement of funds to the appropriate vendor/contractor upon their meeting predetermined milestones. Having a third party review construction progress prior to authorization of payments has the added benefit of protecting you throughout the process.
Yes, the grant is free – you do not have to pay it back. You will receive a 1099 from the State at the end of the year, meaning you may need to pay taxes next year on the grant funds you utilized, but the grant is essentially free financial assistance from the state of California to help offset costs associated with building an ADU. Check with your accountant or CPA to better understand your potential tax liability given your unique circumstances.
We will process the grant applications in the order they are submitted. You can ensure timely processing by submitting your employment and financial documents as soon as they are requested. Rest assured, we will keep you informed at each step of the application process. The quicker you respond to requests for additional information, the sooner your application will be approved and funded.
You can only have one managed escrow account associated with the grant funds. You may still apply through CCEDA even if you’ve already applied and received a grant acceptance letter through another program participant. If you choose to move forward with CCEDA, on confirmation of your acceptance, we can reach out to CalHFA on your behalf to revoke any previous submission and reservation with another program participant.
Any remaining grant funds after you receive your Certificate of Occupancy will be returned to CalHFA’s grant fund. However, there are plenty of opportunities to utilize the funds including applying them to non-recurring closing costs such as paying down your interest rate. We will help guide you through the process.
Every financial institution and organization must charge an administration fee to cover the cost of managing the grant. CCEDA’s administration fees for internal management along with the minimally required 3rd party managed escrow services will not exceed $5,000 per grant administered.
The ADU grant is authorized to pay for pre-development and non-recurring closing costs associated with the construction of the ADU. Pre-development costs include feasibility, civil, site survey and title-24 reports, soils tests, ground clearing and site prep, bringing utilities to the ADU, architectural design, structural engineering, city permits and impact fees, interest rate buy-down, and more.
Most hard construction costs (foundation, framing, finishes, fixtures, and all other construction wages and materials, etc) are not covered by the grant. Neither is solar.
While the grant will not reimburse costs directly to a homeowner, grant funds may be utilized to pay down your loan balance by the amount paid to approved 3rd party vendors.
Note: these costs cannot be reimbursed directly to a homeowner.
No, this is for owners of primary residences only.
During the application process we require thorough documentation of your ADU plans, including an approved contractor bid or project feasibility report, and evidence of financial qualification based on your unique financial situation. Our team along with our lending partners will help you determine how much you will need for your ADU build and whether you have sufficient resources for a successful ADU project completion. In the event we find you may be short, we’ll connect you with additional resources to help bridge any gap.
Through CCEDA, you can apply for the grant and if financing is needed, with your consent, your application will be shared with our approved lenders who will work directly with you on your loan.
You may also apply for financing with any lender of your choice and once you receive your loan, transfer those funds along with your other cash into the managed escrow account.
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CCEDA empowers organizations serving people of color, and others, to create economic opportunity and social equity in low to moderate income communities.
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