ADU Program

Flexible options for funding your ADU, whether you need financing or not

As a nonprofit corporation, CCEDA is proud to be one of CalHFA’s preferred partners offering the $40,000 ADU grant.

Qualifications for the CalHFA grant ​

1.

Property must be owner-occupied

2.

Income must fall within the limit for your county

3.

Property must be a single-family home or 2-4 units

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Whether you have all the funds or need financing, we've got you covered

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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Please read our FAQs below to see if your question has already been answered before contacting our Support team.

Email us at
advocate@adu-cceda.com

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Frequently Asked Questions (FAQs)

General Questions:

At this time, CCEDA is fully allocated for Phase II and grant reservations are currently paused per CalHFA. Any prior submitted and new applications will go into our waitlist in the order COMPLETED applications with all supporting documents are received.

Download our checklist to find the requirement documentation you’ll need to submit to join our waitlist.

Yes, the ADU grant is free money, you do not have to pay it back. However, you will receive a 1099 from CalHFA for the year the grant funds were wired into escrow, meaning you may need to pay taxes on the utilized grant funds the following year. 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 complete applications are submitted. You can ensure timely processing by submitting your employment and financial documents along with a 3rd party verified budget as soon as they are requested. Rest assured, we will keep you informed at each step of the application process.

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, however since CalHFA will not accept duplicate reservations you must first cancel your  grant application with the other program participant before CCEDA can reserve you.

Grant Qualification and Uses:

CalHFA’s new income guidelines apply to all ADU Grant applicants. All existing CCEDA applicants are unfortunately now subject to CalHFA’s newly published reduced income limits. We are looking for alternative programs for existing CCEDA applicants who no longer qualify for the CalHFA ADU Grant.

The ADU grant can be used to pay pre-construction costs associated with the ADU. Examples of eligible pre-construction costs includes feasibility reports,  architectural designs, permit management, permits, impact fees, property survey, energy reports, soil tests, all site prep including demolition, utility connections, septic, tree removal, and other necessities before the actual building of the ADU. It can also be used to buy down the interest rate (a non-recurring closing cost) if you receive a loan through a CCEDA pre-approved lender.

Per CalHFA, the grant cannot reimburse you directly, however it can be used to pay qualified invoices. If your vendors provide an invoice for the amount you have already paid them, the escrow account can pay this invoice directly to the 3rd party vendor. You may either submit the original invoices for payment (and deal with the vendor directly to be reimbursed your original payment to them) or CCEDA may authorize direct payment to your lender to pay down the balance of any loan or HELOC used to make those initial payments upon completion of your ADU.

While the grant cannot 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 upon ADU completion, if you received your loan through a CCEDA-approved lender.

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.

Unfortunately, if you’ve already received a Certificate of Occupancy for your ADU you won’t be eligible for the grant. 

Yes, however you must show you are the trustee and/or beneficiary of the trust and reside on the property as your primary residence. All beneficiaries of the trust who also reside in the home must be included in the application and combined income used to qualify under CalHFA income requirements.

No, this is for owners of primary residences only. If the property is held by an LLC, the property must first be transferred to the owner occupant prior to CalHFA awarding the grant to the applicant.

If it is a modular home that is permanently affixed to a foundation and permitted by the city as an ADU, then yes, it would qualify for the grants and traditional home financing. If on the other hand, it is a HUD-manufactured home on a chassis, then you will need to check with your local municipality (city or county) to see if a manufactured home can be permitted as a legal ADU if it is not a cross-mod permanently affixed to a foundation. Any legally permitted ADU would qualify for the CalHFA ADU grant covering pre-construction costs.

Whoever is on the title and also residing in the home must be included in the application. There is an option for a gift letter that you can show where the funds for the ADU are coming from, so if you are paying for the ADU construction, you can gift those funds to your parents who are on the title. Their income would be used to qualify for the ADU grant however.

No, you can only receive the grant where your primary residence is. You cannot receive two grants as you must live on the property where the ADU is being built. You may live in either the home or the ADU.

Financing Questions:

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.

You do not need a loan when applying with CCEDA, however you are required to show that you have all funds secured to complete your ADU project based on the project budget, including pre-construction expenses. If you end up needing a loan, our preferred lenders can help get you a loan at a good rate and your loan fees can be paid directly form the grant. If you already have an existing 2nd or HELOC, you may pay all your project expenses from the loan and upon completion of your ADU CCEDA will approve a pay down up to $35,000 off your loan balance, once on all eligible invoices are submitted.

During the application process we require thorough documentation of your ADU budget. This may include a contractor bid or a project feasibility report that includes a detailed budget to demonstrate your full project budget. In the event your project budget increases we will require evidence that you have the funds or a loan approval letter demonstrating you have sufficient funds to complete your ADU project. Our team along with our lending partners can help you determine how much you will need for your ADU build and whether you have sufficient resources for a successful ADU project completion.

CCEDA Questions:

There are no out-of-pocket fees with obtaining the grant. There is a $5,000-7,000 administrative fee from CCEDA, which is inclusive of the CalHFA required 3rd party Fund Control Escrow account. The admin fee is determined by your unique circumstance and support needs over the course of your project and will be paid directly out of the grant proceeds. 

Every financial institution and organization must charge an administration fee to cover the cost of managing the grant from application to the completion of your ADU. CCEDA’s administration fees for internal management along with the minimally required 3rd party managed escrow services will not exceed $7,000 per grant administered. 

Questions about the Application:

Please disregard these pending docs, they are for our staff to review when looking over your application. Only owed docs are what we need from you.

Feel free to reach out to advocate@adu-cceda.com to ask us about the status of your application. Our team will get back to you regarding any missing information or pending documents.

This means your funds have been reserved! Our grant officers still need to review your file to make sure all documents are correct and completed. Once they have been accepted, they will be in contact with you regarding funding. During this time please upload a contractor’s bid or an approved 3rd party Project Feasibility Report that includes a project budget, and a pre-construction cost breakdown of costs that will be covered by the  grant, as an ADU project budget is required  by CalHFA to receive your grant funds.

For more details on what to expect during the application process, visit our Next Steps page.

Please look at your spam folder as they can be received there. You will receive milestone emails as our staff is reviewing your file. Otherwise, please email us at advocate@adu-cceda.com.

Having a completed application does not guarantee you will receive a grant, but we will do our best to reserve a grant if you meet the requirements. Our team will accept your documents in preparation of the grant portal opening. We process complete applications in the order submitted. Don’t forget to include both your project budget and pre-construction budget as these are required in your application document submittal

Please note the application portal is made for those who need a loan as well as those who do not. If these questions do not apply to you, please leave them blank. All questions with a red asterisks must be filled out in order to submit your grant application. CCEDA will NOT be performing any credit checks. Your data is private and will only be submitted to CCEDA approved lenders IF you require a loan and request assistance.

You’ve submitted the necessary documents to reserve your grant. Please note that reservations are paused at this time, but we are still actively reviewing documents. This will allow us to reserve your funds if, and when, reservations resume. 

All pending documents will be reviewed by our reservation team and accepted once verified. For more details on what to expect during the application process, visit our Next Steps page

Escrow and Receiving Your Funds:

The grant funds will be dispersed into a managed escrow account, as required by CalHFA.

A managed escrow account ensures accountability in the disbursement of state grant funds, protect lender funds (if applicable), and ensures your cash remains available for the duration of your ADU project. CCEDA’s team oversees your account with the 3rd party fund control company, 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 and your submission and approval to pay their invoices. Having a third party review construction progress prior to authorization of payments has the added benefit of protecting you throughout the process.

No, you have 3 options. 

1) If you have taken out a loan for your ADU project you may directly pay vendors for all project expenses, including pre-construction expenses, from you loan proceeds. When your ADU is complete, CCEDA upon submission of all qualified invoices, will approve the pay down of your loan balance by up to $35,000.

2) If you would like the added security of the 3rd party fund control company managing all dispersements to your vendors from your escrow account and having them sign lien releases for your protection, this is included in CCEDA’s standard grant management fee. In this case you would deposit all remaining budget funds into the 3rd party escrow account. You may begin by depositing a minimum of $40,000 in order for Fund Control to begin paying your ADU Grant authorized pre-construction expenses.  

3) Alternatively, if you do not wish to deposit all budgeted funds, you may deposit a minimum of $40,000 in order to begin drawing from the CalHFA ADU grant funds. Once you complete your ADU and receive your Final Permit sign off,  you may elect to either pay final payments to your contractor(s) from these funds, or request to be paid any balance remaining from your initial $40,000 deposit. Note, any grant funds not used for pre-construction expenses will be refunded to CalHFA.

Any remaining grant funds after you receive your Certificate of Occupancy will be returned to CalHFA’s ADU 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.

During Construction:

All grant funds will be deposited into a Managed Escrow Account with DixieLine fund control. This State approved escrow company will be responsible to process all payments of grant funds to vendors upon approval by the owner and CCEDA. Vendors, contractors, inspectors etc. will be paid directly by Dixieline using the grant funds to ensure state compliant financial management of the grant.

All GRANT FUNDS paid to vendors must be paid from the Managed Escrow Account. You have 3 upfront fund control account setup options which will dictate how your vendors get paid:

1) If you have taken out a loan for your ADU project you may directly pay vendors for all project expenses, including pre-construction expenses, from you loan proceeds. When your ADU is complete, CCEDA upon submission of all qualified invoices, will approve the pay down of your loan balance by up to $35,000.

2) If you would like the added security of the 3rd party fund control company managing all dispersements to your vendors from your escrow account and having them sign lien releases for your protection, this is included in CCEDA’s standard grant management fee. In this case you would deposit all remaining budget funds into the 3rd party escrow account and all vendors would be paid directly fro this managed escrow account. You may begin by depositing a minimum of $40,000 in order for Fund Control to begin paying your ADU Grant authorized pre-construction expenses.  

3) Alternatively, if you do not wish to deposit all budgeted funds, you may deposit a minimum of $40,000 in order to begin drawing from the CalHFA ADU grant funds. In this case you may pay your non-grant qualified expenses directly with your vendors. Once you complete your ADU and receive your Final Permit sign off,  you may elect to either pay final payments to your contractor(s) from these funds, or request to be paid any balance remaining from your initial $40,000 deposit. Note, any grant funds not used for pre-construction expenses will be refunded to CalHFA.

You still need to provide a completed 3rd party prepared budget for the project. You would need to assemble all your subcontractor bids for the project as well as city and permit fees. Your best option would be to get an ADU Project Feasibility Report from our approved partner, HOMEPLEX, ADU specialists. This will provide the 3rd party construction  and pre-construction budgets needed to get your funds awarded from CalHFA.

Yes, if you are self managing the project we suggest you either get a loan and pay all project costs from the loan directly to all vendors. When your ADU is complete, CCEDA upon submission of all qualified invoices, will approve the pay down of your loan balance by up to $35,000.

Alternatively, you may deposit a minimum of $40,000 in order to begin drawing from the CalHFA ADU grant funds. In this case you may pay your non-grant qualified expenses directly with your vendors. Once you complete your ADU and receive your Final Permit sign off,  you may elect to either pay final payments to your contractor(s) from these funds, or request to be paid any balance remaining from your initial $40,000 deposit. Note, any grant funds not used for pre-construction expenses will be refunded to CalHFA.

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