The ADU Grant Program for Los Angeles Residents

Los Angeles is currently experiencing a shortage of affordable housing, causing a significant increase in the cost of living for its residents. By 2050, it is expected that the population of Los Angeles will reach a projected 4.1 million residents. To help homeowners afford living in the city, California supports the construction of Accessory Dwelling Units (ADUs) by offering up to $40,000 to each eligible homeowner.

ADUs are gaining popularity due to their many benefits to homeowners. Homeowners who build an ADU can rent it out to generate instant passive income and increase their real estate's overall value. However, building materials and construction costs have risen, and only some homeowners can commit to a project of this size.

By: Annya Silva
The ADU Grant Program

The main objective of the ADU Grant Program is to create affordable housing units in California. CalHFA Executive Director Tiena Johnson Hall states “California must make the most of every opportunity to build more housing for its residents, and the ADU Grant Program helps homeowners who want to invest in and share their property to help address a huge issue.”

To address this issue, the California Housing Finance Agency (CalHFA) has allocated $25 million for 2023 to cover up to $40,000 of ADU project costs to each qualifying homeowner through the ADU Grant Program. This is enough funding to assist in the construction of 600 new ADUs across the state.

How to Qualify?

To qualify for the grant, homeowners in the city of Los Angeles must meet the following requirements:

- You should be the owner and occupant of the property where the ADU will be constructed.

- Your household income must not exceed 80% of the area median income.

- Your property must be zoned for ADUs and should be a single-family home.

- There should be no outstanding liens or judgments against your property.

Income Requirements to qualify: 

The income requirements are simple! The grant is offered to 58 counties across California and the maximum income number fluctuates by county. Take a look at this list where you will find the income limits per county.

Download the ADU Grant Qualification Guide to learn more about the requirements to qualify for this grant!

Download the ADU Grant Qualification Guide and find out if you're elegible!
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Is building an ADU worth it in Los Angeles?

Let's compare the average rental costs in Los Angeles with the cost of building an ADU. The average rent of a studio apartment in Los Angeles is $2,000. The average rent of a 1-bedroom apartment is $2,500, and that of a 2-bedroom apartment is $3,500. Fully functional Accessory Dwelling Units range from 400 to 1200 square feet. To compare, the average studio apartment has a square footage of 472 sq ft, and the size of a one-bedroom apartment is 714 sq ft. A two-bedroom apartment has an average living space of 1,006 sq ft. Based on the above information, building an ADU and renting out the unit can also be a profitable investment in Los Angeles. However, it's important to note that the cost of building an ADU can vary depending on several factors, such as the size of the unit, the location, and the materials used.

We’ll help you apply!

If you are a homeowner in Los Angeles and believe that you are eligible for the ADU Grant Program, we strongly encourage you to apply for it! The application process is free of cost, and you can consult with one of our ADU experts to discuss your project goals and financing options. If you are eligible, you could receive up to $40,000 off towards constructing your Accessory Dwelling Unit. Don't miss this opportunity to take advantage of this valuable program!

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