Options and Resources
CalHFA ADU Grant Program — Currently Paused California’s CalHFA ADU Grant Program previously offered homeowners up to $40,000 to cover predevelopment costs including site prep, architectural designs, permits, soil tests, impact fees, and energy reports. As of 2026 this program is paused and not currently accepting new applications due to funding exhaustion. There is no confirmed relaunch date. Keep an eye on calhfa.ca.gov for updates. Important: anyone claiming they can get you access to this grant is running a scam. Do not engage.
Home Equity Line of Credit (HELOC) — Active One of the most popular and flexible ADU financing tools available right now. A HELOC allows you to borrow against your home’s existing equity, draw funds as needed throughout construction, and pay interest only on what you use. In 2026, HELOC rates in California typically range from 7.5 to 10 percent depending on your credit score and equity position. If you have built up equity in your home, this is one of the smartest places to start.
Cash Out Refinance — Active A cash out refinance replaces your current mortgage with a new one at a higher loan amount, putting the difference in your pocket to fund your build. This works best when current interest rates are close to your existing mortgage rate and you have significant equity in your property.
Construction Loans — Active Construction loans are specifically designed to cover the cost of building and are a strong option for larger ground up ADU projects. Several lenders now offer ADU specific construction loans that typically require 10 to 20 percent of the project cost as a down payment and convert to a permanent loan once construction is complete.
FHA 203k and Fannie Mae HomeStyle Loans — Active These government backed loan programs allow homeowners to finance an ADU as part of a home renovation, basing the loan amount on the after improvement property value rather than your current equity. This is a game changer for homeowners who have not yet built up significant equity but are ready to build.
CalHome Program — Active An underutilized but valuable resource. The CalHome Program provides state funds through local public agencies and nonprofit organizations for ADU and JADU assistance including construction, repair, and reconstruction. This is especially worth exploring for lower to moderate income homeowners. Contact your local jurisdiction to find out what is available in your area.
Local City and County Programs — Varies by City Several municipalities in and around Los Angeles offer their own ADU financing assistance and incentive programs. Availability and funding change frequently so we always recommend checking directly with your local planning department. Cities like Pasadena and El Monte have historically offered loan programs and planning support worth asking about.
Community Development Block Grant Program (CDBG) — Active Federal funds available through local jurisdictions for single and multifamily rehabilitation including ADU construction and planning assistance. Income qualification requirements apply. Contact your local city or county office to learn more.
Property Tax Exemption via SB 1164 — Active While not a financing source, this is a significant financial benefit worth knowing about. SB 1164 provides a property tax exemption for up to 15 years on newly constructed ADUs, making them considerably more cost effective to operate over the long term.
Third Party Financing Through Winter Remodeling Inc. — Available Not sure where to start with financing or feeling overwhelmed by the options? We have you covered. Winter Remodeling Inc. offers access to third party financing through trusted lending partners to help get your project off the ground. We will walk you through what makes the most sense for your specific situation, your budget, and your goals so you can build with confidence from day one. Just ask us and we will point you in the right direction.