ADU Grants in Los Angeles (2026): Is the $40,000 Grant Still Available?

Quick answer: No. California’s CalHFA ADU Grant, which paid up to $40,000 toward an ADU’s pre-development costs, has been fully allocated since December 28, 2023, and CalHFA has not announced a new round. The City of Los Angeles’s LA ADU Accelerator Program is also closed to new applications. What Los Angeles-area homeowners can use in 2026 is narrower: Long Beach’s Backyard Builders loan (Round 2 applications open November 1–30, 2026), Pasadena’s ADU construction loan (open now), free pre-approved ADU plans in unincorporated LA County, and fee limits in state law that apply to every ADU automatically.

Plenty of web pages still describe the $40,000 grant as if you could apply for it today. You can’t. CalHFA’s own program page warns that anyone who says they can get you an ADU grant is running a financial scam. This guide sets out what has closed, what is open, who qualifies and what each program asks of you in return, using the agencies’ own pages and the statute text, all checked on 15 October 2026.

ADU Grant and Incentive Programs Around Los Angeles (October 2026)

Is the California $40,000 ADU Grant Still Available?

No. CalHFA’s ADU page posts one update: “December 28, 2023 – The latest round of ADU funding has been fully allocated.” Nothing newer has been posted, and no new state funding round had been announced as of October 2026. If the program comes back, CalHFA will announce it on its own site; you can sign up for CalHFA’s ADU email updates rather than relying on a contractor’s or lender’s advertising.

What the grant paid for

Under CalHFA’s program term sheet (last revised 11/27/2023), the grant reimbursed up to $40,000 of pre-development and non-recurring closing costs: architectural designs, permits, soil tests, impact fees, property surveys, energy reports and utility hookups. It did not pay for construction itself. CalHFA wired the money directly into the construction loan escrow; costs the owner had already paid could come back only as a principal reduction on the construction loan, not as cash. CalHFA issued a Form 1099-G for the year it paid, so the grant could have tax consequences.

Who qualified for the CalHFA ADU grant?

• Income: household income within CalHFA’s low-income limit (under 80% of area median income) for the county — $84,160 for Los Angeles County (and for Orange County) on the 2023 limit sheet, effective 11/01/2023.
• Owner occupancy: the applicant certified owner occupancy and that the ADU was for rental or intergenerational housing.
• A participating lender: applications were submitted by a CalHFA-approved lender, usually the one making the construction loan. The term sheet also allowed the current deed in place of loan papers when no financing was used.
• Code compliance: the ADU had to meet local zoning and building codes, all permit and impact fees had to be paid, and a certificate of occupancy had to be provided on completion.

Those rules matter only if the program reopens, and a new round could come with different rules.

City of Los Angeles: No ADU Grant in 2026

The City’s only dedicated ADU incentive, the LA ADU Accelerator Program, paired homeowners who rent an ADU to an older adult with tenant referrals, a case manager and stable rent payments over a five-year term. Its site now says the program is “currently closed and is not accepting new applications.” It never funded construction.

LADBS’s Standard Plan Program is often described as a cost saver, and it does save plan-check time: the designs are reviewed in advance, so plan check is shorter. The plans are not free, though. LADBS says they remain the property of the architects and builders who designed them and are sold at a price set by each design owner. LADBS still reviews every site for zoning, foundation and other site-specific conditions, and building permit fees are still based on the project’s valuation. If you are comparing a catalog design with a custom one, our prefab vs. stick-built ADU guide covers the trade-offs.

Long Beach: Backyard Builders ADU Loan (Round 2 Opens November 1, 2026)

This is the most generous program open in the Los Angeles area right now. Long Beach’s Backyard Builders Program is funded by a $4.8 million CalHome award from the state Department of Housing and Community Development, and the City expects it to finance at least 16 ADUs in Round 2. The application window is November 1–30, 2026, and if more people qualify than there are loans, the City holds a lottery.

Loan terms

• Up to $250,000 or the actual cost of the ADU, whichever is less
• 2% interest, 30-year term, payments deferred for the life of the loan, no prepayment penalty
• Repayment is due at the earliest of: the 30th anniversary; the home ceasing to be owner-occupied; a sale, transfer or lease of the property; or a cash-out refinance of a senior loan
• A City-appointed project manager guides you through design, permitting, construction and lease-up at no cost to you
• Funds sit in an escrow account and are released to contractors at milestones; general contractor fees and overhead are capped at 10% of total project cost, and no money is paid to the homeowner

Who qualifies

• Owner and full-time occupant of a single-family home with only one unit on the lot
• Minimum credit score 620, maximum debt-to-income ratio 55%, current on mortgage, taxes and insurance
• Household income below the State’s “low income” limit for Los Angeles County
• The property must be in a State-designated program area: Opportunity Zones and Justice40 areas get first priority, then High or Higher Resource areas. You can check an address on the City’s Round 2 eligibility portal
• Combined loans no more than 105% of the after-construction value, no major unpermitted structures and no open code enforcement case

What the ADU has to be

Because the entire budget — design, permits, construction, contingency and fees — has to fit under the $250,000 cap, the program is stricter than the building code. The ADU must be under 500 square feet, single-story at ground level, and built with standardized, off-the-shelf finishes, fixtures and appliances. A small ground-level unit also falls under both of the state fee limits described below. The City is holding information sessions on October 27 (in person), November 5 (Zoom) and November 14 (in person); details are on the program page. For permits and ADU types in the city, see our Long Beach ADU guide.

Pasadena: Second Unit ADU Loan (Open Now)

Pasadena’s Second Unit ADU Program is accepting applications on a rolling basis. It is a construction loan tied to affordable rent, not a grant:

• Loan: up to $225,000 under the program handbook (rev. 12/2025) and FAQ. The City’s web page advertises up to $250,000, so confirm the current cap with the Housing Department. The loan is a 3-year construction loan at 1% simple interest with no payments during the term, and it covers design, permits and construction for an ADU of up to 750 sq ft.
• Refinance deadline: the loan must be refinanced before the 3 years are up. If it is not, it converts to a 30-year loan at prime plus 1% with a 1% conversion fee.
• Rent requirement: the ADU must be rented to a Pasadena Housing Choice Voucher holder for 7 continuous years under a housing agreement. Opting out early is a default that makes the loan due in full and adds project-management costs and the interest saving to the balance.
• Eligibility: owner-occupied for the past five years; credit score above 650; debt-to-income below 40%; combined loan-to-value below 80%; property value cap $1,488,580 (2026). Condominiums, historical structures and junior ADUs are not eligible. Income limits depend on the census tract: some Pasadena tracts have no income limit, while elsewhere an 80%-of-area-median-income cap may apply, depending on funding.
• Help included: a City-selected ADU consultant manages pre-design, bidding, permitting and construction. New detached ADUs must use pre-approved plans where available, and existing unpermitted units can be legalized through the program.

Pasadena estimates 12–24 months from approval to completion. Our Pasadena ADU guide covers local zoning and permitting.

Unincorporated LA County: Free Pre-Approved ADU Plans

If your property is in an unincorporated area, where LA County Planning and Public Works issue approvals, the County Catalog offers three pre-approved Standard ADU Plans that are free to the public:

• Plan A: 1,200 sq ft, 3 bedrooms, 1 bathroom
• Plan B: 1,200 sq ft, 2 bedrooms, 1 bathroom
• Plan C: 800 sq ft, 1 bedroom, 1 bathroom

You still prepare a site plan for your lot (setbacks, easements, existing structures, parking, driveways and so on) and file a DRP base application through EPIC-LA. A planner then reviews it and sends an invoice. The plans are free, but review and permit fees still apply. These plans are for unincorporated areas only. Cities inside the county, including Los Angeles, Long Beach and Pasadena, run their own permitting.

Fee Limits Every California ADU Gets Automatically

These are not grants, but they are real savings and need no application or income test. They come from Government Code § 66311.5:

• No impact fees at 750 sq ft or less. A city, special district or water corporation may not charge any impact fee on an ADU with 750 square feet of interior livable space or less (or a junior ADU of 500 sq ft or less). Above 750 sq ft, impact fees must be proportionate to the size of the main house. Starting January 1, 2027, SB 1117 limits the charge, for up to two ADUs on a lot, to the area above 750 sq ft.
• No school fees under 500 sq ft. Under § 66311.5(c)(3), an ADU of less than 500 sq ft counts as construction that adds less than 500 sq ft of assessable space, and Education Code § 17620 lets school districts charge such construction only above 500 sq ft.
• No new utility connection for conversions. For ADUs created inside an existing house or accessory structure (the units described in § 66323(a)(1), such as many garage conversions), the agency or water corporation cannot require a new or separate utility connection, or charge a related connection fee or capacity charge, unless the unit is built with a new single-family home or sold separately. See our garage conversion ADU guide and ADU utility connections guide.

What these rules do not cover: plan-check and building permit fees, which are not impact fees, and connection fees or capacity charges for new detached ADUs, which must be proportionate but can still be charged.

If You Don’t Qualify for a Program

Most Los Angeles homeowners will pay for an ADU with a cash-out refinance, a home equity line or a construction or renovation loan. We compare those in our ADU financing options guide and our step-by-step guide to financing an ADU in Los Angeles. Choosing a size at or under 750 sq ft, or converting an existing garage, cuts fees in ways no grant application can. Our ADU cost guide shows how those choices change the budget, and the ADU tax guide covers property tax reassessment.

Disclosure: APLA Construction is a licensed general contractor (CA License #1136359). We are not affiliated with, and are not paid by, any of the programs on this page, and we cannot get you a grant. If you are selected for the Long Beach or Pasadena program and need bids from licensed contractors, we are glad to provide one.

Planning an ADU: ADU floor plans and size limits and the ADU permit process in Los Angeles.

Frequently Asked Questions

Is the California ADU grant still available in 2026?

No. CalHFA’s ADU Grant Program, which paid up to $40,000 toward pre-development costs, has been fully allocated since December 28, 2023, and no new round had been announced as of October 2026. CalHFA warns that anyone offering to help you get an ADU grant is running a scam.

Who qualified for the $40,000 CalHFA ADU grant?

Owner-occupants with household income within CalHFA’s low-income limit (in 2023, $84,160 in Los Angeles County), applying through a CalHFA-approved lender. The grant covered pre-development and closing costs, such as plans, permits, soil tests, impact fees and surveys, not construction.

Does the City of Los Angeles have an ADU grant?

Not in 2026. The LA ADU Accelerator Program, which helped owners rent existing ADUs to older adults, is closed to new applications, and LADBS’s pre-approved Standard Plans must be purchased from their designers. The savings available in the City are the state fee limits for ADUs of 750 sq ft or less and for garage conversions.

Is there an ADU loan program in Long Beach?

Yes. Long Beach’s Backyard Builders Round 2 lends up to $250,000 at 2% with payments deferred for the life of the 30-year loan. Applications are open November 1–30, 2026, for lower-income owner-occupants of single-family homes in designated areas, and the ADU must be under 500 sq ft and single-story.

What does Pasadena’s ADU loan require in return?

The ADU must be rented to a Pasadena Housing Choice Voucher holder for seven continuous years, and the 3-year, 1% construction loan must be refinanced before it ends. In exchange, the City provides a construction loan (up to $225,000 under the 2025 handbook) and a consultant who manages design, permitting and construction.

Do I pay impact fees on a 750 sq ft ADU in California?

No. Government Code § 66311.5(c)(1) bars impact fees on an ADU with 750 square feet of interior livable space or less. Plan-check and building permit fees still apply, and new detached ADUs can still be charged proportionate utility connection fees.

Planning an ADU in Los Angeles?

Call (818) 818-4419 or email info@aplaconstruction.com. CA License #1136359.

Sources, read 15 October 2026: CalHFA ADU Grant Program page, ADU Grant term sheet (rev. 11/27/2023) and 2023 ADU Grant income limits; City of Los Angeles LA ADU Accelerator Program; LADBS Standard Plan Program; City of Long Beach Backyard Builders Program and Round 2 announcement; City of Pasadena Second Unit ADU Program, program handbook (rev. 12/2025) and FAQ; LA County Planning Standard ADU Plans County Catalog; City of West Hollywood Affordable ADU Pilot Program; California Government Code § 66311.5, Education Code § 17620 and SB 1117 (2026). Program terms, income limits and application dates change, so confirm with each agency before applying. General information, not financial or legal advice.